City plans ‘red’ Brexit warning
The City of London Corporation is set to issue a 'red' warning report on the impact of Brexit, amid fears that a split from the EU will damage the capital's appeal to financial services firms. The report from the Corporation has upgraded the risk rating for the Square Mile from 'amber', and cites the increased probability that “a post-Brexit trade deal between the UK and EU is unlikely to replicate the level of access firms have within the Single Market”. Meanwhile, Deutsche Bank has indicated it will move far fewer jobs to Frankfurt after Brexit than the 4,000 that has been widely reported. “The 4,000 number that comes up again and again is much too high,” said chief executive John Cryan. Elsewhere, BNP Paribas is reportedly looking to capitalise on the disruption of Brexit to increase its market share in UK corporate and investment banking.
Open Banking threat to data, banks warn
Britain's biggest banks have warned that consumers will be at higher risk of data theft under new “Open Banking” rules. Banks will be required to share customers’ data with third parties if asked to do so from today, a move designed to help people identify better deals. But banks fear customers could be duped by phoney companies and that some of the third-party firms will be vulnerable to hackers.
Tax cut boosts Wells Fargo and JP Morgan
Wells Fargo’s fourth-quarter earnings rose 17% compared to last year as the bank benefited from US President Donald Trump's recent tax reforms. The group saw earnings come in at $6.15bn in the quarter, which included a $3.35bn benefit linked to the Trump tax reduction bill. However, Wells Fargo also booked $3.3bn in charges linked to pending litigation, which includes the continuing investigation into the bank's sales practices and an investigation into its mortgage business. Elsewhere, JP Morgan Chase beat fourth-quarter earnings expectations. Excluding one-off charges its net profits came in at $6.7bn as revenues rose 4.6% to $25.5bn. The bank said its effective tax rate should fall to 19% this year, from 32%, as a result of US changes.
Goldman to offer home improvement loans
Goldman Sachs is to offer home improvement loans as part of a push into consumer lending. The Wall Street bank will offer non-secured loans with interest rates lower than credit cards but higher than cheaper forms of home financing. Goldman launched retail banking in the US in 2016 under the Marcus brand, offering personal loans and savings accounts online.
Nomura signals research shake-up as Europe’s Mifid reforms bite
Koji Nagai, president of Nomura, has signalled a shake-up of the Japanese bank’s research unit as it prepares for the effects of Mifid II rules that came into force at the start of the year.
Carillion to go into liquidation
Carillion is to go into liquidation, threatening thousands of jobs. The move came after talks between the firm, its lenders and the government failed to reach a deal to save the UK's second biggest construction company. However, the government will provide funding to maintain the public services run by Carillion. Some of Carillion's contracts will be taken on by other firms and some could be renationalised. The company has 43,000 staff worldwide - 20,000 in the UK.
Bovis expects profits to rise ‘significantly’
Bovis Homes has reported a 7% increase in selling prices, with the average sale value hitting £272,000 in 2017 from £255,000 in 2016. However, the number of completions fell 8% from 3,977 in 2016 to 3,645 in 2017. Bovis lifted its final dividend by 8% to 32.5p and said it expected to increase ordinary dividends by 20% in 2018. Chief executive Greg Fitzgerald said the group expects to deliver “a significant improvement in profitability in 2018.” He added that customer satisfaction “continues to improve” and is reflective of a “a step change in the quality of our homes.”
Card surcharges banned
A ban on surcharges levied by companies on customers who pay with debit or credit cards has come into effect. Companies are no longer allowed to charge customers up to 20% more for purchases made with a credit card under the new rules. However, the ban comes amid concerns that consumers may see the cost of goods and services creep up, or additional fees added by retailers, as a result of the changes. Consumer groups have welcomed the ban, but are urging shoppers to report any retailers they believe are flouting the new rules.
MPs to consult on bitcoin bubble
An inquiry into bitcoin and other cryptocurrencies could be launched by MPs because of concerns over investor losses. Nicky Morgan, chairman of the Treasury Select Committee, will consult experts on the issue. Separately, the FCA has published a list of suspect firms in a fresh crackdown on “binary options”. The regulator said that it believed the blacklisted firms were all still offering binary options in spite of failing to be authorised to do so.
CEO named for fintech body
Stephen Ingledew has been named as the first chief executive of FinTech Scotland, an organisation established by the Scottish Government, Scottish Financial Enterprise and the University of Edinburgh with the aim of helping Scotland's fintech sector flourish. Business minister Paul Wheelhouse said the Scottish government, together with industry and academic partners, “will now work closely with Fintech Scotland to unlock what look to be significant economic benefits of a thriving fintech sector.”
Mis-selling fears erupt over ‘returns of 1m% plus’
New rules requiring providers of Priips - packaged retail investment and insurance-based products - to publish future performance scenarios have led to concerns that investors are being given wildly misleading projections.
European ETF market leaps 40% in strongest showing since 2009
Figures from ETFGI show assets invested in European-listed ETFs and products reached $802bn last year, underscoring the popularity of index-tracking vehicles beyond the dominant US market.
Global investors lick lips as China opens to asset firms
A handful of the best-known global asset managers have applied and won licences to sell funds to Chinese investors, as regulators begin to open markets to foreign companies.
Investors pour into global equities funds; inflows strike six-month peak
New data shows that flows into mutual and exchange traded funds reached a six-month high of $24bn in the week to January 10 - a sharp increase from an outflow of $4.7bn the previous week.
Synova acquires AllClear
Synova is set to acquire AllClear Insurance Services for £30m. The Romford-based firm specialises in providing affordable insurance to travellers who are over 55 and have serious medical conditions.
M&A deals hit $40.9bn total value
New data shows the total value of M&A deals among investment managers reached $40.9bn in 2017, but the volume of transactions fell to its lowest since 2006.
Google invests in Oxford biotech
Google’s venture capital arm GV has invested £20m in Oxford biotech Vaccitech, which is developing a vaccine to protect against most strains of flu.
LEISURE AND HOSPITALITY
M&B’s Christmas a cracker
Mitchells & Butler has revealed that consumers ate 225,000 meals on Christmas Day at its pubs and restaurants. M&B said that sales on December 25th at sites open for a year or more were 5.4% up on a year before, and in the three weeks to January 6 they were up 3.9%. In the seven weeks since late November, sales have risen 1.6% against the same period last year. In the preceding seven weeks the growth rate was 2.3%.
Personal holiday planner on the market
Travel Counsellors, a website that connects holidaymakers with freelance advisers to plan bespoke breaks, has been put up for sale by Equistone. The private equity group has appointed Rothschild to sell, float or refinance the business.
Carlyle mulls GKN bid
Carlyle is reportedly considering a counter-bid for GKN. Shares in the engineering group reached a record high on Friday after GKN rejected a £7bn approach from turnaround firm Melrose Industries. GKN said the “opportunistic” approach undervalued the business, and instead set out a plan to split in two. Carlyle is understood to have long been interested in GKN.
Thousands of £100k earners boosted by Help to Buy
Analysis of official figures shows that 5,545 homeowners earning more than £100,000-a-year have benefited from the Help to Buy scheme. Of these, 1,287 already owned a property. The research suggests that if those earning over £100,000 received the same average loan as others benefitting from the scheme, they will have claimed £280m over the last five years. Polly Neate, CEO of Shelter, commented: “Help to Buy has completely missed the mark, barely doing anything to help the first-time buyers it is targeted at, and nothing to help those most in need of an affordable home.”
Mortgage lenders shut the door on bitcoin investors eyeing first property
Bitcoin investors may have to rethink home buying plans. Many mortgage lenders refuse to accept the funds as the inability to trace the source of the money raises money-laundering concerns.
B&M expansion pays off
B&M has revealed strong sales figures for the past three months, suggesting the discounter’s rapid expansion in the UK has paid off. B&M opened 19 new shops in the 13 weeks to December 23rd. It now has 569 stores in the UK where sales surged almost 13% to £837.3m. UK like-for-like sales rose 3.9% in the period, while overall group sales were up by 22.7%. The latest trading figures were a boon for B&M's private equity backer. Clayton, Dubilier & Rice sold its remaining 4.9% stake for £200m on Friday, meaning that it has raised more than £1.2bn since it floated the retailer in June 2014.
Sterling jumps 1% as Spain and Netherlands back soft Brexit
The pound rose by more than 1% to $1.37 against the dollar on the back of reports that Spanish and Dutch finance ministers had agreed to seek a Brexit deal that kept the UK as close to the EU as possible. A report from Bloomberg claimed Spanish economy minister Luis de Guindos and his Dutch counterpart Wopke Hoekstra had raised concerns about the impact of tariffs and the loss of contributions from the UK to the EU budget. However, some analysts dismissed the connection, instead pinning the pound’s strength on a disappointing afternoon of US data.