RBS makes NatWest switch
Royal Bank of Scotland is to be renamed NatWest Group. Howard Davies, chairman of RBS, said: “The essential reason for this is, as the bank has evolved from the financial crisis and the bailout, we have focused on the NatWest brand.” He added: “It really makes no sense for us to continue to be called RBS. It was designed for a global group of brands, which we no longer are.” The announcement came as RBS revealed annual results in which profits had nearly doubled to £3.1bn in 2019 from £1.6bn the year before. CEO Alison Rose also announced a £250m cost-cutting plan and said the bank is set to halve its investment arm. Meanwhile, RBS has said it will stop financing large oil companies unless they demonstrate that their business models align with the Paris climate agreement, giving large oil firms until 2021 to put “a credible plan” in place to reduce their impact on the climate.
Revolut leads digital bank complaints
Figures show that complaints about Revolut accounted for eight in 10 of all grievances about digital banks made via dispute resolution service Resolver in the past 18 months. Of the 3,100 consumer issues flagged over digital banks in the period, 80% centred on Revolut, with 20% from Monzo customers and fewer than 1% from Starling users. Revolut's share of complaints exceeds its 66.4% market share. Monzo's market share is 25.2%, while Starling's is 8.3%. Resolver's Martyn James revealed that most complaints related to accounts being frozen, difficulties in contacting banks and dissatisfaction with customer services, commenting: “Often it's all three” and adding that it is “disappointing to see this from the digital banks that promised to transform the industry."
Quinn to reveal HSBC strategy
HSBC’s interim chief executive Noel Quinn will this week detail his blueprint for the lender's future, with a shake-up that could see as many as 10,000 jobs cut reportedly on the cards. The strategic review aims to increase profitability and cut back on underperforming divisions. The Sunday Telegraph says the roles of some of HSBC’s best-paid bankers could be at risk, citing sources who suggest Mr Quinn is “working through a potential hit-list of bankers making more than £1m a year as he looks to cut those who are overpaid and underperforming”.
Ulster Bank reports £18m pre-tax profits
Ulster Bank has reported pre-tax profits of £18m in 2019, down from £51m in 2018, while turnover rose from £184m to £189m. Head of Ulster Bank NI Mark Crimmins said that despite a "challenging external environment" it increased corporate lending by 12% in 2019 and saw an 8% increase in small business drawdowns.
Metro Bank raises overdraft fees
Metro Bank will increase interest rates to 34% from April 25, more than double the 15% it currently charges on arranged and unarranged overdrafts. The bank, which offered a £10 flat-fee until December last year, believes that over 93% of customers will pay the same or less under the new system. The shift comes on the back of tighter regulation from Financial Conduct Authority as it looks to make the cost of using an overdraft more transparent. TSB, Barclays, First Direct, RBS and Nationwide have all increased rates in response to the tougher rules.
New housing bank promises new homes for the North
A new challenger bank is hoping to take advantage of the Prime Minister’s pledge to “level up” the north with plans for a £3bn lending boost to the regional housing market. GBB aims to fund up to 25,000 homes by 2025, focusing on areas likely to benefit from the recently-confirmed HS2 scheme as well future Northern Powerhouse projects.
Scottish Building Society launches entrepreneurs’ mortgage
The Scottish Building Society has launched a dedicated mortgage for entrepreneurs looking to get onto the property ladder. The product is designed to recognise the challenges many start-ups face in demonstrating to traditional lenders using automated credit scoring that they have a regular income. For businesses with only a one-year history looking for an 80% loan, the new mortgage factors in projections for the next year – providing turnover and profit are flat or rising.
Digital savers set to double
Analysis by Finder.com, a personal finance comparison website, suggests the number of people with a digital-only bank account is set to double in five years, hitting 23.2m by 2025. Over the past year, the number of people banking with digital-only providers such as Starling and Monzo has risen by 165%.
Building society eyes library site
Newcastle Building Society is hoping to secure approval for a branch that will be incorporated into a new library development in Tynemouth. This would be its fourth community branch as it looks to fill a gap left by the withdrawal of larger banks from the North East's towns and villages
US PE funds snap up UK firms
The acquisition of UK companies by US private equity funds jumped 53% last year, with the value of companies acquired by US funds hitting £14.2bn in 2019 compared with £9.3bn in 2018. Analysis by law firm Mayer Brown also showed the value of acquisitions of UK companies by EU-based funds increased to £1bn last year, up from £42m the year before.
ECB misses diversity targets
The European Central Bank has missed its own targets to increase the proportion of female managers. In 2013 it revealed an aim to increase the proportion of women in middle management. Its executive board drew up plans to boost the percentage of women in middle management from 15% to 35% by the end of last year, with a separate target looking to double the proportion of women in its most senior management roles from 14% to 28%. While failing to hit the target on the proportion of women in middle management, the firm appointed its first female president in the period, with Christine Lagarde replacing Mario Draghi last year.
Citigroup CEO's compensation unchanged
A regulatory filing shows that Citigroup kept CEO Michael Corbat's 2019 compensation unchanged at $24m. His total compensation included a base salary of $1.5m plus cash bonuses of about $6.7m, equity awards of nearly $7.9m and a long-term performance based pay worth $7.9m. In 2018 his total compensation of $24m marked a 4.35% raise on the previous year.
Orcel's suit against Santander rejected
Andrea Orcel's criminal lawsuit against Santander has been rejected by a Madrid court. Mr Orcel was offered the CEO job at Santander in 2018 but the bank changed its mind in 2019, saying it could not meet his pay demands. Mr Orcel, who resigned as head of UBS's investment banking business to take up the Santander offer, is suing Santander for €112m in a separate civil lawsuit, claiming breach of contract.
VW offers €830m dieselgate settlement
VW has offered a settlement of €830m with German drivers who purchased their emissions test-cheating diesel cars but says talks with the German consumer association VZBV have broken down. VW said it could not accept a further €50m in fees demanded by lawyers representing the consumer group, while VZBV said the system of redress was inadequate.
Stewart would set up City of London embassies across EU
Rory Stewart, who is running for the Mayor of London, has said he would set up City of London embassies across EU capitals if elected. Stewart said the embassies would be similar to Sadiq Khan’s European office in Brussels, which operates to lobby London’s interests among EU member states, and would be located in cities such as Berlin, Paris and Warsaw.
How will the EU reshape fund managers’ regulations after Brexit?
With Brussels set to review several asset management directives in the coming years, Siobhan Riding considers how regulations may be altered and the impact upon the UK’s asset management sector.
UK must weigh the costs and benefits of regulatory divergence
Huw van Steenis of UBS looks at what Brexit will mean for financial services, considering issues including access to European markets, divergence from EU rules and regulation of the sector.
Jupiter in Merian talks
Jupiter Fund Management is in advanced talks to buy asset manager Merian Global Investors from private equity firm TA Associates.
Former MEP warns of fresh raid on fund managers’ EU business models
Former Brussels lawmaker Kay Swinburne has warned that the EU’s push to establish its own data storage infrastructure poses a threat to the business models of asset management firms.
Chinese asset managers prop up coronavirus-hit funds
Chinese asset managers have pledged to spend around $350m of proprietary capital to bolster investor confidence during the coronavirus outbreak.
Astrazeneca in coronavirus warning
Astrazeneca shares closed down 4.3% on Friday after it warned that the coronavirus epidemic will hit the business for “up to a few months”. Astrazeneca's warning came after it reported a 15% rise in annual sales to £18bn.
LEISURE AND HOSPITALITY
Approval granted for Britain’s largest pubs company
The Competition and Markets Authority has granted Stonegate, the owner of the Slug and Lettuce, Walkabout and Yates, to buy Ei Group in a deal that will create Britain's largest pubs company. The competition watchdog said it had accepted undertakings given by Stonegate, which included selling 42 sites, to address competition concerns.
The number of number of private landlords has hit a seven-year low, with 222,570 leaving the sector since the Government began to cut tax reliefs, according to estate agency Hamptons International. A 3% stamp duty surcharge on additional homes and tighter mortgage lending regulation was introduced in 2016, while 2017 saw the start of mortgage interest rate relief being replaced with a tax credit. The number of privately rented homes has fallen by 156,410 since a peak of 5.29m in 2017. There were 2.66m landlords in 2019, the fewest since 2012’s 2.58m.
Asking prices up £2,500
Analysis by Rightmove shows that asking prices are up by more than £2,500 over the past month, with the average hitting £309,399 in February – just £40 below the all-time record. The figures are based on the 108,107 asking prices recorded on the site over the past month, equal to 95% of the UK market.
Retail growth expected
Retail sales figures set to be released by the Office for National Statistics this week are expected to show a return to growth after five months of either flat or declining sales. While December’s data saw the volume of retail sales fall by 0.6% compared with November, January’s figures are likely to show growth, with the British Retail Consortium’s sales monitor, which covers the period to January 20, showing sales had picked up. With January’s figures the first since the election, Peter Dixon, international economist at Commerzbank, said: “It will be interesting to see if the Boris factor has positively affected consumer sentiment,” while Alasdair McKinnon, manager of Scottish Investment Trust, commented: “I would not expect any fireworks, but I am interested to see how the first full set of post-Election figures turn out.”
Tesco found guilty of illegal property deals
The Competition and Markets Authority (CMA) has found Tesco guilty of breaching competition law after leaning on retail property landlords not to rent nearby sites to rivals for up to a decade. The CMA said it first discovered that retailer had been in breach of competition rules in 2018. Tesco subsequently reviewed all its land agreements and found 23 breaches in total.
Manchester City banned from European competitions
Manchester City have been banned from European club competition for the next two seasons and handed a €30m fine. This comes after the club was ruled to have committed "serious breaches" of UEFA's club licensing and financial fair play regulations, with Manchester City found to have broken the rules by "overstating its sponsorship revenue in its accounts and in the break-even information submitted to UEFA”.
Carney: Johnson's election win sees confidence rebound
Mark Carney, governor of the Bank of England, says Boris Johnson's general election victory has prompted a “rebound in confidence” in the economy, adding that Britain is moving to address its main economic problem - weak productivity. Mr Carney went on to say that while data shows it is “absolutely clear” that Brexit has had “a notable impact on investment,” Britain’s departure from the EU could prove to be “a conceptual positive'” for the UK and is “prompting a reassessment of economic policy, structural economic policy.”
Budget may be delayed, says Shapps
Transport Secretary Grant Shapps has revealed that the Government’s Budget could be delayed. It had been set for 11 March, but the timetable was thrown into doubt after the resignation of former Chancellor Sajid Javid on Thursday. Speaking of Mr Javid's replacement, Rishi Sunak, Mr Shapps said: "The guy's only been in place for a few days, let's give him a few days to decide on the date.”