BANKING
Call for overdraft interest hikes to be halted
Campaigners are calling on banks and building societies to delay imposing new overdraft rates on customers due to the coronavirus outbreak. Bank of Scotland, Halifax and Lloyds account holders will be charged up to 50% in interest but Baroness Altmann, a former pensions minister, said that increasing interest rates was "impossible to justify" in the current climate. "Banks should reconsider the rise in overdraft charges that is due to come in shortly," she said.
TSB rejects staff bonus fears
TSB has denied claims by unions that changes to its reward scheme could pressure staff into trying to sell more loans, which could push customers into debt. Documents indicate that staff will get bonuses for “helping customers borrow better” and “save better” but payouts will be cut if managers are not satisfied with their work. The bank insists its scheme would reward staff only for helping to “develop” a product, not for selling it to customers.
Revolut turns to veteran
Revolut has appointed Ronald Oliveira, a former executive at Union Bank of California, Heritage Oaks Bank and Avidbank, as its US chief executive. The fintech firm had originally planned to launch in the US by the end of 2018 but is yet to secure a banking licence.
Bó struggling against digital rivals
NatWest’s digital bank offering Bó is struggling to compete after a string of problems, the Sunday Times reports, noting that Bó lacks many features of its digital rivals and has a satisfaction rating lower than almost any other bank.
BoE has missed a huge opportunity to fund SMEs
Stephen Haddrill, the DG of the Finance & Leasing Association, says the BoE should extend its term funding scheme to non-bank lenders, which provide SMEs with up to £20bn a year of finance.
Rate cut sees banks withdraw savings accounts
High Street banks and challengers moved to withdraw some of their best savings accounts after the Bank of England cut the base rate cut from 0.75% to 0.25%. Rachel Springall, of Moneyfacts, said: “Clearly the banks are much faster at cutting rates than they are passing on rises.”
High street lenders cut SVR rate
Metro Bank has joined the likes of Lloyds Bank, Barclays, Santander, Nationwide, Co-op Bank and Halifax in cutting its mortgage Standard Variable Rate in line with the Bank of England's 0.5% interest rate reduction.
Seven in 10 want more transparency
A survey by Triodos Bank has found that 70% of savers think their banks should be more transparent about how their money is being invested. Two-thirds of respondents did not know if their money or savings go towards supporting oil, gas or coal and 50% would not want their cash invested in fossil fuels.
JP Morgan backs bridging lender Glenhawk
JP Morgan has agreed a £200m facility with UK bridging loan specialist Glenhawk to offer short-term property development and homeowner loans. Glenhawk won authorisation from the FCA to offer homeowner loans last month.
PRIVATE EQUITY
Tech investment stalls amid virus restrictions
Investments into UK tech start-ups could drop due to travel restrictions from coronavirus and instability in the financial markets, venture capital businesses have warned. Investors are being forced to cancel meetings with start-ups and turn to video conferencing instead. Reece Chowdhry, a partner at RLC Ventures, said: "The ecosystem relies on a lot of events. They've all been cancelled, basically."
Lloyds invests in software business
LDC, Lloyds Banking Group’s private equity wing, has invested £11m into warehousing and fulfilment start-up James and James.
INTERNATIONAL
US cuts rates and launches stimulus programme
The US has cut interest rates and launched a $700bn stimulus programme as it looks to protect the economy from the impact of coronavirus. The Federal Reserve has cut rates to a target range of 0% to 0.25% and is to begin quantitative easing, pumping money directly into the economy by buying bonds. It was also announced that the Fed will work with other central banks to increase the availability of dollars for commercial banks.
Regulators impose one-day ban on short-selling Italian and Spanish firms
The Financial Conduct Authority (FCA) was forced to institute a ban on short-selling shares in more than 100 Italian and Spanish firms after regulators in those banned the shorting of 85 and 69 stocks respectively. Companies included in the one-day ban included Santander's owner Banco Santander, TSB's owner Banco de Sabadell, O2's parent Telefonica, carmaker Fiat Chrysler and Juventus Football Club.
Europe’s banks face a test of resilience
Despite the threat facing European banks from the coronavirus-driven market sell-off they are in a better position than they were in 2008, the FT says, but a wave of defaults is now likely, nevertheless.
Cost of US corporate default protection soars
The cost of credit insurance has risen to an eight-year high in the US as investors race to protect themselves from the risk of corporate defaults as a result of the coronavirus.
Canada moves to shore up economy with emergency rate cut
The Bank of Canada has cut interest rates by 0.5 percentage points to 0.75% and released C$10bn in credit as it grapples with coronavirus and the oil price crash.
Deutsche Bank to operate in split teams
Deutsche Bank will operate globally in split teams as of today in an effort to stem the spread of coronavirus.
AUTOMOTIVE
Aston Martin signs new rescue deal amid coronavirus uncertainty
Aston Martin has been forced to revise a £500m rescue deal led by billionaire Lawrence Stroll. The carmaker is now seeking £536m with Mr Stroll putting in less while getting a bigger stake and other investors are being asked for more. The coronavirus outbreak has caused Aston Martin’s share price to fall to £2.06 per share, far below the £4 price previously planned for the emergency share issue.
AVIATION
Airlines call for government support
The airline industry is reeling from the effects of travel bans put in place to combat the spread of Covid-19. British Airways has warned staff that the carrier will have to cut jobs, suspend routes and ground aircraft and Virgin Atlantic, easyJet and Ryanair are all expected to announce mass groundings of aircraft and potentially huge redundancies as the COVID-19 crisis escalates. Peter Norris, the chairman of Virgin Group, has written to Boris Johnson stating that the industry will need £7.5bn in emergency financing, to be repaid once trading returns to more normal levels. Meanwhile, trade group Airlines UK has warned that the UK's aviation industry may not survive the coronavirus pandemic without emergency financial support. Governments across Europe have had similar requests from the industry, which doesn’t expect to be able to stage a recovery until the autumn.
FINANCIAL SERVICES
Wealth managers ask rich clients to stump up more against loans
UBS and Credit Suisse are among the wealth managers seeking extra collateral from wealthy customers against their loans as the coronavirus sends the value of shares tumbling.
Travel insurers cease new policy sales
Many of the UK’s biggest insurers are stopping sales to new travel insurance customers due to the coronavirus outbreak. Aviva, Direct Line and Churchill have followed LV= which stopped on Wednesday. The Mail on Sunday reports that insurers are lobbying for the Government not to change travel advice which will lead to automatic policy payouts and are seeking assurances that the Treasury will step in to save struggling firms.
LGIM to launch its first fossil fuel-free pension fund
Legal & General Investment Management (LGIM) is to launch its first fossil fuel-free ethical pension fund later this year. While the full stock list for the new fossil fuel-free fund has not yet been confirmed, it will exclude oil companies and take a wider ethical stance by barring investments in tobacco, weapons makers and pure coal manufacturers.
Wirecard delays results as special audit extended
Payment specialist Wirecard has said a special audit of its accounting will take longer than expected pushing back publication of its full-year results until the end of April.
LEISURE & HOSPITALITY
Travel firms show flexibility to keep custom
Travel companies are adjusting restrictions on allowing changes to bookings so customers can postpone holidays with less notice and alter the destination of their trips. A surge in interest in countries with no cases of coronavirus is also being reported. The FT says that hotels, tour operators and theme park owners across the world are now facing “total meltdown” after the WHO declared the coronavirus a global pandemic. Cruise firms have suspended operations while Hilton and Accor have withdrawn their forward guidance for the year.
Over 1.5m jobs at risk unless rates holiday extended
The Chancellor delivered a business rates holiday to shops and venues with a rateable value of less than £51,000 in his Budget in a move aimed at helping businesses cope with the fallout of Covid-19. But Kate Nicholls, chief executive of UK Hospitality, warns that at least 1.5m jobs are at risk and £39bn of tax revenue unless the government extends the business rate holiday to help larger businesses cope.
MANUFACTURING
Manufacturers asked to help make ventilators for hospitals
Manufacturers including Rolls Royce and JCB are being asked to transform their current production lines to help produce ventilators as part of a "national effort" to tackle the coronavirus. Unipart Group, which currently manufactures precision parts for the NHS, has already been in urgent talks with the Government about producing ventilators.
Manufacturing exports fall
A report from Make UK shows manufacturing exports fell to the lowest level in three years in Q1, with export orders turning negative for the first time since 2016. A poll of more than 300 companies also suggests the sector ground to a standstill at the end of 2019 as the stockpiles from a potential October EU exit wound down.
MEDIA & ENTERTAINMENT
Gate collapses after losing court case
Gate Ventures has gone into administration after losing a High Court battle with investor Zheng Youngxiong, who claims the entertainment business owes him £2.5m.
BT says network can cope
BT has said its broadband network is strong enough to cope with the surge in demand as offices send workers home to limit the spread of Covid-19.
REAL ESTATE
Average asking prices reach record high
Average property prices have reached a record high of £312,625 in March, according to Rightmove. Across the UK, average seller asking prices in March were £3,226 higher than in February. The new all-time high beat a previous record set in June 2018 by £3,186. Asking prices in March are up by 3.5% compared to last year. The average time to sell a property is now 67 days.
WeWork eyes further workforce cuts to curb expenses
WeWork's chief executive is considering further cuts to its workforce to cut expenses and position itself towards generating profits. Lay-offs could affect more than 1,000 employees.
RETAIL
Next expected to cut profit targets by £66m
Next is expected to cut profits targets in an update on Thursday, as a combination of the coronavirus, a hike in wages from April and currency headwind piles pressure on struggling high streets. Next said in January that it expected to make pre-tax profits of £734m for the current year. However, analysts believe that this could now fall by 9%, or £66m. In a worst-case scenario it may fall by as much as 15%.
Laura Ashley on the brink
Laura Ashley is in talks with Hilco Capital over a £15m funding lifeline that could salvage 2,700 jobs. Failure to secure funding could see the chain collapse within two weeks leading to the closure of 150 stores.
SPORT
Sports events cancelled or suspended globally
The coronavirus pandemic wiped out most of the world's major sporting events on Friday, including the UK’s Premier League, which has been postponed until April. The rugby Six Nations and the London marathon were also called off. Next week's Champions League and Europa League fixtures have been postponed by Uefa and the Masters golf tournament has been delayed. The Formula 1 Grand Prix in Vietnam and the Giro d'Italia have been called off.
ECONOMY
Coronavirus may trigger global recession
Economists have warned that the coronavirus outbreak means a global recession is likely. Christian Keller, head of economics research at Barclays, said: “Europe looks to be fully affected by the virus and, increasingly likely, also the US,” adding that “significant restrictions to public life … imply large negative effects on activity in the second quarter.” Barclays predicts global growth of just 1.8% this year, while BMO Capital Markets thinks the global economy will grow by 1.6%. George Buckley, chief European economist at Nomura, comments: “This is precisely the situation that we have been worried about for the past decade – another crisis, another recession and no monetary bullets left.”