Bramson mulls Barclays overhaul
Ed Bramson will attempt to charm top shareholders as he attempts to rally support for a proposed shake-up of Barclays. The activist has told major investors that he wants to see the bank overhaul its investment banking arm, ramping up returns and stepping up one-off payouts. The City fears that he could try and force Barclays to sell its investment bank, which would lead to a tussle with chairman John McFarlane who is determined that Barclays remains a force in investment banking.
End of cheap lending poses risk
The withdrawal of the Bank of England’s £127bn cheap funding scheme poses a "systemic risk" to Britain's financial system, the central bank is understood to have privately warned lenders. Meanwhile, UK lenders have reined in the availability of non-mortgage credit to households in the first quarter of 2018, according to a study among banks and building societies. The decrease was “largely driven by a changing appetite to risk”, the report said.
Robots aid HSBC battle against fraud
HSBC will use robots to help identify money laundering, fraud and terrorist funding, as it looks to harness AI to tackle financial crime more efficiently than with human staff. Meanwhile, Mark Carney, the Bank of England Governor, has warned that job losses driven by technology could lead to a rise in Marxism in the west. Separately, a new report by Barclays warns that automation will depress wages severely for years or even decades to come. It highlights how automation is spreading into office jobs and the services sector, simplifying jobs and turning skilled work into unskilled labour.
CEO says Brexit ‘not totally bad’ for City
Artut Fischer, the chief executive of the Berlin Stock Exchange, has said that Brexit may not be as bad as initially thought for UK financial firms. “We would treat the UK like the US for example and we are doing a lot of business with the US, so there are ways to overcome what we call the loss of the passport,” said Mr Fischer.
Banking tribunal must hear historic claims
Campaigners are calling for SMEs with grievances against their banks to be able to bring historic claims before a new tribunal. The subject will be addressed this week when MPs from the All-Party Parliamentary Group on Fair Business Banking will lead a debate in the Commons.
European operators struggling to compete against US investment banks
In the wake of John Cryan’s departure from Deutsche Bank, the Sunday Telegraph examines how European investment banks are still trailing their US rivals. Deutsche Bank was once seen as Europe’s best hope of taking on the US investment banks, yet the likes of JP Morgan and Goldman Sachs have rebounded far quicker from the financial crisis than their European peers. The paper notes that the other three big European investment banking players – Barclays, UBS and Credit Suisse - have endured their own problems. UBS’s investment banking revenues have plummeted 63% to $1.9bn, while Barclays and Credit Suisse have struggled to translate solid market share into healthy profits.
Citigroup profit beats estimates on consumer banking strength
Citigroup has reported a higher-than-expected quarterly profit, driven by strength in its consumer banking business and a surge in equities trading. “While market conditions have been uneven so far this year, our first quarter results show our ability to deliver for both clients and shareholders and we look forward to sustaining this momentum for the balance of the year,” said chief executive Mike Corbat.
US banks see delayed benefits from tax overhaul
Wall Street executives have said that US banks are yet to see the full benefit of Donald Trump’s tax cuts after a string of quarterly results, with expected business growth and higher consumer spending yet to materialise. Meanwhile, profit was up at 35% for JP Morgan - the biggest ever quarterly profit by a US bank - buoyed by a revival in trading volumes, lower loan losses and a big cut in the corporate tax rate. The bank reported first-quarter net income of $8.7bn.
Wells Fargo told to pay $1bn penalty
Wells Fargo has been told to pay $1bn by American finance watchdogs to settle allegations that it mis-sold mortgages and car insurance. Chief executive Tim Sloan said he was confident that the bank was becoming a “better, stronger company”, but also that “it will take time to put all of our challenges behind us”.
Deutsche Bank investor calls for dismissal of chairman
Deutsche Bank investor Karl-Walter Freitag is calling for the dismissal of chairman Paul Achleitner and will put forward a proposal to that effect at the bank’s annual shareholder meeting.
China set for fewer World Bank loans in US fundraising deal
The World Bank looks to change its lending model, reducing loans to China, as part of a deal seeking to secure US backing for a $13bn capital increase.
Jobs under threat at Vauxhall car dealerships
PSA Group, the owner of Vauxhall, is preparing a widespread cost-cutting plan that threatens thousands of jobs as its car dealerships across Britain. PSA is thought to be considering taking the axe to as many as a third of its 300-plus Vauxhall dealerships in the UK.
Jaguar Land Rover to cut jobs
Jaguar Land Rover (JLR) is cutting 1,000 of its UK contractor roles, blaming uncertainty around Brexit and confusion over diesel policy. The firm will not be renewing contracts of a number of agency staff at its central English Solihull and Castle Bromwich plants.
Norwegian not planning to sell up
Norwegian Air Shuttle has refused to comment on whether it will enter into takeover discussions with International Airlines Group after welcoming the owner of British Airways as a new investor.
Gatwick airport investor considers sale
Gatwick Airport’s biggest shareholder, Global Infrastructure Partners (GIP), could sell its 42% stake in the business for up to 10bn, according to City sources.
M25 refinancing project to save Britain millions in debt
The UK is set to benefit from an up to £1.3bn refinancing of debt linked to one of the largest private finance initiatives, a scheme to widen the M25. The owners of the project have hired HSBC, Barclays and Lloyds as bookrunners on a public bond refinancing of the project's commercial bank debt. The interest rate on the bond is expected to be just under 1%, well below the figure of around 3% on the existing debt.
Policy chief warns of transition limbo
Catherine McGuinness, the City of London's policy chief, has warned that the EU is leaving UK companies in limbo over whether they will be able to operate as usual in Europe during the Brexit transition period. "We're going to need that firmed up and people acting on it so that businesses know where they stand. We need to see more a bit more reaction from the EU. It would be good if their governments encourage them to move on that," she added.
David Schwimmer appointed LSE CEO
The London Stock Exchange has appointed former Goldman Sachs man David Schwimmer as chief executive officer, with his initial challenge being to navigate Brexit. He will replace Xavier Rolet, who left last year amid a major boardroom disagreement. “LSEG has multiple opportunities for further attractive growth across its market leading capital formation, information services and post trade businesses," said Mr Schwimmer.
FCA orders asset managers to cut the costs of funds
The Financial Conduct Authority has told asset managers that they must automatically switch investors to the cheapest version of funds as soon as possible, following a landmark review of the asset management sector. Research company Fitz Partners said that a third of investor money may be in old share classes, costing an extra £1bn a year in fees.
Ripple calls for end of cryptocurrency ‘Wild West’ days
Ripple, the world's third-largest digital currency, has called for British regulators to implement new rules to end the "Wild West" days of the cryptocurrency market. "We're at that time now where we need more clarity and rules and we need more certainty. It's a good time to start revisiting that 'wait and see' approach taken by regulators," said Ryan Zagone, head of regulatory relations at Ripple.
Four Seasons reprieve averts funding crisis
Four Seasons Healthcare has escaped a funding crisis after lenders agreed another reprieve on its debt repayments. The US hedge fund H/2 Capital, which owns most of Four Seasons' £525m bond debt, has agreed to extend talks on restructuring by another month. The hedge fund also agreed a reprieve on bond interest payments that have repeatedly threatened to force the group into insolvency.
Advent International closes in on deal for Sanofi’s generics unit
Advent International is leading the race to acquire the European generics unit of Sanofi, as it faces competition from trade and financial buyers, according to sources close to the process.
LEISURE AND HOSPITALITY
Elliott piles pressure on Whitbread
The activist hedge fund Elliott Advisors has built a stake of more than 6% in Whitbread, in a bid to force the FTSE 100 company to spin off its Costa Coffee chain.
Cineworld shareholders reject bonus plan
Cineworld shareholders have rejected a proposal that would have handed bosses millions of pounds worth of shares, which they could cash in once the cinema chain’s share price had risen 10%.
MEDIA AND ENTERTAINMENT
Sorrell steps down from WPP role
WPP chief executive Sir Martin Sorrell is stepping down with immediate effect. The chairman of WPP, Roberto Quarta, will oversee the agency until a new CEO is appointed.
Exposure fears irk Hammerson shareholders
Hammerson's proposed £3.4bn takeover of rival Intu has been opposed by Dutch pension fund APG, the shopping centre owner’s third-largest shareholder, which cited concerns over leveraging and the current retail environment.
Asking prices for homes hit a record but rise is slowing
Asking prices for UK homes reached a record high of £305,732 this month, according to new figures. Across the country the price of a new-to-the-market property edged up by 0.4%, or £1,228 month-on-month. The increase pushed the average price tag on a home past the previous record of £304,943 seen in July 2017.
Weather takes its toll on retailers
Figures from the British Retail Consortium have revealed that year-on-year, footfall in March dropped by 6%, a significant decline compared with the positive rate of 1.3% recorded in March 2017. It was also the steepest year-on-year fall since the end of 2010. Growth fell in all shopping destinations, with the high street suffering a decline of 8.6%, shopping centres down 4.8% and retail parks saw a decrease of 1.8%.
UK workers see first pay rise for a year
Britons have been given their first pay increase since the start of 2017, as a year-long squeeze on real incomes comes to an end. Figures out on Tuesday are expected to reveal that average wages climbed 3% in February on a year earlier, above the inflation rate of 2.7% for the same month - the first time pay growth has outpaced the rise in consumer prices since January last year. Inflation itself is expected to have held steady in March as a drop in food and fuel prices was offset by higher airfares around the earlier Easter holidays.
Two in five firms plan to start exporting
Two in five UK businesses have dismissed market uncertainty and are planning to export for the first time or enter a new market in six months, according to a report from Lloyds Bank. The prospect of increased profits and turnover were the main reasons why firms were looking to expand their business abroad, with 18% explaining that they were looking to export due to existing demand overseas, and 13% wanting to take advantage of currency exchange rates.