Finance group calls for focus on City in Brexit talks
Britain’s top financial lobby group has called on Theresa May to put the City at the heart of EU trade talks to prevent a “substantial” blow to the economy. In an open letter, UK Finance said the government must strike a deeper agreement with the EU than the bloc’s deal with Canada if the sector is to prosper after Brexit. Meanwhile, bankers could be given a cribsheet to help the industry push for close ties with the EU following Brexit. A document, drafted for TheCityUK, refers to mounting concerns about the “prominence of ideas and proposals” that could undermine the financial sector’s “key messages and asks” on Brexit. It suggests a “private document for TheCityUK members could be compiled,” listing key ideas and themes that might have to be rebutted in private meetings.
Banks face fines as immigration checks commence
Banks and building societies face fines and public sanction by the Financial Conduct Authority if they fail to conduct immigration checks on account holders from January. From 2018, banks will be required to scrutinise the immigration status of their 76m current account customers against a government database of people without leave to remain in the UK. The requirement amends legislation from 2014 that required banks and building societies to check the immigration status of customers when opening accounts.
Cashflow tops SME concerns
Research by Barclaycard shows cashflow is the biggest worry for SMEs. The bank said 70% of SMEs cite this as a key concern, with over half saying the problem is becoming more acute than 18 months ago. Separately, Lloyds has been criticised for using cheap central bank funding to boost profits rather than increase lending. The bank has borrowed £20bn of the £100bn lent so far under the Term Funding Scheme, but has also cut back its lending to consumers and businesses by £5.5bn since the scheme launched in August 2016.
SNP plea to save 62 RBS branches
Ian Blackford, the leader of the SNP at Westminster, has called on Theresa May to prevent RBS from closing 62 branches across the UK. In a letter to the PM, he said that she must stand up for communities in Scotland who face losing their last bank in town. He insisted the closure decisions must be raised by the UK Government at the earliest opportunity in its role as major shareholder. Meanwhile, Labour’s Caroline Flint writes in the Yorkshire Post that small towns will suffer if banks are allowed to close.
Pay award questioned
Sir Win Bischoff, the former chairman of Lloyds Banking Group, has said the bank’s decision to withhold an award worth thousands of pounds from its former CEO Eric Daniels was an “appalling” situation. Sir Win also said that the decision went against Lloyds' legal advice, according to a claim filed with the High Court by Mr Daniels.
Diamond eyes Tandem stake
The Sunday Times reports that Bob Diamond is set to buy a stake worth more than £10m in Tandem Bank. The deal, yet to be approved by the Financial Conduct Authority, would boost the digital-only bank’s capital base by £80m.
Barclays’ commitment to investment banking paying off in UK
New data from Dealogic has revealed that Barclays has earned fees of $352m in the year to date from M&A and capital markets in the UK, giving it a 9.1% market share.
Bellamy set to be named Weatherbys chief
David Bellamy, the boss of St James’s Place, is set to be named as the new chairman of Weatherbys Bank.
Wall St banks braced for €1bn loss on Steinhoff slide
Bank of America and Citigroup are among banks facing potential losses of more than €1bn on loans made to Christo Wiese, chairman of Steinhoff, the South African-based retailer whose shares have plummeted amid an accounting scandal.
Investment banks split on shifting assets ahead of Brexit
Big investment banks are undecided on whether to move hundreds of billions of clients’ assets ahead of Brexit, with some planning to begin “novating” assets to other EU entities.
Car leasing groups switch focus to used vehicles
The FT examines how car leasing companies are moving into the second-hand car market as they look to take advantage of a glut of used vehicles.
Ryanair pilots in Ireland suspend strike plans
The Impact union, which represents Irish-based pilots, has announced that Ryanair pilots have suspended a pre-Christmas one-day strike. The move follows Ryanair's decision on Friday to recognise unions, in a bid to avert strikes across its European operations. Unions in other countries had already halted action, but Impact said Irish pilots wanted more clarification.
Persimmon chair quits following CEO bonus row
The chair of housebuilding firm Persimmon has resigned after it emerged that chief executive Jeff Fairburn is to receive a £109m bonus. Persimmon said that Nicholas Wrigley, along with remuneration committee chair Jonathan Davie, were leaving the FTSE 100 housebuilder in recognition of the fact they did not cap the remuneration scheme when it was introduced in 2012. Critics have accused the firm of benefiting from the taxpayer-backed help-to-buy scheme.
Socially responsible firms offer best returns, says UBS
The CIO of UBS's wealth management arm has said socially responsible businesses, and those with more women in senior jobs in particular, can bring enormous extra returns for investors. Mark Haefele admitted he had long ignored arguments to invest ethically, but has now realised that socially responsible investment appears to be the best way to make money.
Brydon expected to survive vote
London Stock Exchange chairman Donald Brydon is expected to survive a shareholder vote on his future this week, with ISS and Glass Lewis advising their clients to vote against the resolution by the Children’s Investment Fund. Meanwhile, the annual number of flotations on the LSE is expected to top 100 for the first time since 2014, in a sign that the UK is still attractive to firms despite the Brexit vote. “Despite the challenges Brexit presents, London’s highly global, deep and liquid capital markets continue to be the ideal partner for funding the world’s growth,” said Nikhil Rathi, a senior executive at LSE.
FCA to probe ICOs
The FCA is to investigate the initial coin offering market after warning recently that the area was "very high risk". The regulator said that it may take further action over the offerings as the price of bitcoin reached a new high of $17,934 on Friday, an increase of 2,200% in just 12 months. Meanwhile, an insurance start-up that claims it can reduce premiums for millennials will launch a £15m initial coin offering next month. InsurePal will use the funds raised from the ICO to target the motor insurance market.
Bloomberg adds cryptocurrencies to terminals
Bloomberg has added the prices of three cryptocurrencies – Ripple, Litecoin and Ether - to the 325,000 trading terminals it leases to banks, hedge funds and investment firms around the world.
Private equity is the wrong prescription for social care
The FT’s Jonathan Ford outlines why he believes private equity companies should avoid investing in the healthcare sector. He says it is the longevity of capital, not just the amount, which matters.
LEISURE & HOSPITALITY
Byron agrees rescue deal
Byron faces more shop closures after its owners agreed a rescue deal with two new investors. Hutton Collins, which bought the burger chain in 2013 in a deal worth £100m, has sold a majority stake to Three Hills Capital Partners, with FPP Asset Management also becoming a new investor. This leaves Hutton Collins, which also owns Wagamama, as a minority owner.
Steel industry set for £3.8bn boost
A report as part of the government’s Industrial Strategy has suggested Britain’s steel industry could boost its revenues by £3.8bn a year by 2030. The Future Capacities and Capabilities study says national demand for steel is set to rise to 11m tonnes a year by 2030. The biggest opportunity to boost sales is through construction, accounting for £2.2bn, as Britain ramps up infrastructure projects.
MEDIA & ENTERTAINMENT
Sky and BT agree channel sharing deal
Sky and BT have signed a deal to sell their channels on each other's platforms. Under the deal, BT will now supply its sports channels - which show UEFA Champions League and Premier League football - to Sky. In addition, BT will be able to sell Sky's Now TV service - which includes Sky Sports, Sky Cinema and the Sky Atlantic channel - to its customers.
Home loan defaults at post-2008 low
Mortgage defaults are at their lowest level since before the financial crisis as low interest rates help homeowners to keep up their payments. A report found a substantial drop in “bad debt” with £72m worth of residential loans written off by banks and building societies in the 12 months to September, compared with £348m in the previous year. However, it warns that borrowers should not be lulled into a false sense of security given the likelihood that the cost of borrowing could go up in 2018.
Bankers cash in on shopping centre deals
Bankers working on the recent spate of shopping centre deals are set to earn $120m in fees, according to the Sunday Telegraph. Advisers from Deutsche Bank, JP Morgan, Lazard, Rothschild, Bank of America Merrill Lynch and UBS working on the £3.4bn tie-up between Hammerson and Intu would share between $41m (£31m) and $51m in fees if the deal completes. Meanwhile, a £19bn offer from French retail company Unibail-Rodamco for Westfield could generate $60m to $70m of fees for the team behind the deal.
Insurer cuts cover for Poundland suppliers
Poundland is reportedly facing potential difficulties with suppliers after an insurance company reduced its cover on credit for those selling goods to the discount chain. According to the Grocer, the credit insurer Atradius reduced its cover for stock sold to Poundland after the accounting scandal at owner Steinhoff emerged.
Households expect finances to get worse
For the first time since 2014, the majority of households expect their personal financial position to get worse over the coming year as the impact of Brexit causes them to become more gloomy about the economy. A survey by the Bank of England found a net balance of about 35% of households now think that Brexit will do damage over the next 12 months.