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Daily News Roundup: Monday, 19th November 2018

Posted: 19th November 2018


Major financial firms to leave after Brexit

The Mail on Sunday claims that at least 15 major financial firms have already set court dates to approve transfers of parts of their businesses abroad, regardless of the outcome of any Brexit deal. Firms say this is because they cannot afford to take any risks at this stage of the Brexit proceedings. Legal documents claim that Dublin and Luxembourg City are proving the most popular destinations followed by Brussels. More financial firms are expected to file papers detailing plans to move parts of their businesses in the coming months. Barclays will be the first major UK bank to move. Its court papers reveal that it will send about 6,800 client accounts – mainly from the European Economic Area – to a new subsidiary in Dublin between January 26 and July 26 next year.

RBS dropped from global banking list

RBS has been dropped from a list of the world's most important banks, signifying the lender will no longer be required to hold extra capital in case it fails. The Financial Stability Board removed the bank from its list of global systemically important banks that it started publishing following the 2008 financial crisis. RBS said: "We note this decision by the FSB, which reflects our progress in building a much simpler, safer UK-focused bank.” Alistair Osborne in the Times says the development is another sign of progress from RBS, although he adds that UK-focused RBS is a proxy for Brexit risk.

Bramson set to demand seat on Barclays’ board

The Times reports that Edward Bramson has told other shareholders that he could push for a seat on Barclays’ board if he feels that he is being ignored by the bank’s executives. According to one leading UK fund manager, Bramson, who is pushing Barclays to curtail its investment banking operations, could begin a proxy fight against the bank if he does not receive a suitable response from the bank. The investor said he was sceptical about Mr Bramson’s plans, adding: “I am not sure he is promising anything exciting enough to attract wide support from shareholders.”

CYBG set to update strategy plans

CYBG is expected to update investors tomorrow on plans for the newly enlarged business following its recent takeover of Virgin Money. Analysts at UBS expect CYBG to report profit before tax of £333m for the year, up from £293m in 2017. Revenue is expected be flat on last year's £1.02bn. However, the spotlight will be focused more on the bank’s future plans to win greater market share from the likes of Barclays, RBS and Lloyds.

Lloyds should face investigation

Anthony Stansfield, the Thames Valley police commissioner, has said that Lloyds Banking Group should face a criminal investigation over a whistleblower's report into a fraud centred on the Reading offices of HBOS. He said it was "concerning" that an internal report into the HBOS fraud "was not shown by executive directors to their own chairman or non-executive directors for a further three years".

Fair banking plan will not help SMEs

The all-party parliamentary group on fair business banking is to tell MPs that proposals for giving small companies better protection by expanding the Financial Ombudsman Service will "never" be enough to address the "many difficult issues" faced by SMEs when dealing with lenders. The group has voiced concern that the financial arbiter “has a track record of dubious decisions and no appeal process,” and noted that its powers are “limited.”

Banker suffers £25m drop in pay

Filings have revealed that an unnamed banker at Robey Warshaw has seen his pay fall from £37m to £12m after profits at the investment bank plunged. A source close to the group said it was "just a lumpy business", with quieter years resulting in huge profit swings.

Barclays worst for disruption

New data has shown that customers of Barclays suffer the most frequent disruptions to their service. Barclays had the highest number between July and September, with 16 incidents, followed by Lloyds with 12. Bank of Scotland, Halifax and Intelligent Finance, all part of the same group, collectively recorded 11.

M&A not the only solution

Deutsche Bank’s CEO Christian Sewing has said that banks should consider joint ventures in certain areas and products, not only mergers and acquisitions, to be competitive globally.


Credit boom: Private equity bounces back on cheap debt bubble

The FT examines how private equity dealmakers are riding a wave of cheap debt to push buyout values to levels last seen during the financial crisis.

PAG raises new $6bn fund to invest in Asia

PAG has raised $6bn for a new fund, largely from big US pension funds, to invest in Asia.


Danske Bank whistle-blower talking to US enforcement agencies

Howard Wilkinson, the Danske Bank whistle-blower, has been given clearance by the Danish bank to talk to a number of US law-enforcement agencies investigating the money-laundering scheme uncovered at the bank. Meanwhile, the FT reports that Deutsche Bank, Bank of America and JPMorgan Chase have become embroiled in the criminal probe.


Car makers getting twitchy over Brexit

The French owner of Vauxhall, PSA, is contemplating shutting down two plants in Britain amid uncertainty over Britain’s departure from the EU. The factories in Luton and Ellesmere Port employ 900 and 1,800 people respectively. Meanwhile, Rolls-Royce CEO Warren East urged “politicians on both sides of the fence get on and negotiate a practical deal that works for business.”

VW embarks on electrification plan

Volkswagen is to spend almost €44bn developing electric and autonomous cars and new mobility services by 2023, according to chief executive Herbert Diess. The firm expects to take advantage of this investment to become the most profitable manufacturer of electric cars.


EasyJet to reveal surge in profits

EasyJet is expected to reveal that its annual profits have risen by up to 42%, with the airline brushing off strike action and gaining from rivals' troubles.


Kier to book £10m for turnaround programme

Kier is to book £10m of costs in its half-year related to its turnaround programme, but has assured this will reverse over a full year. The construction company said its "Future Proofing Kier" programme to streamline the business and improve cash generation is making progress.


CMA launches investigation into financial services cartel

The Competition and Markets Authority has announced that it has launched an investigation into a possible financial services cartel. The CMA said its probe into the alleged anti-competitive activity was launched under Chapter One of the Competition Act 1998, which addresses price fixing and attempts to control markets. Little detail was given on the investigation.

No return to credit card surcharges

Anne Cairns, the vice chairman of Mastercard, has said that a ban on credit card surcharges has boosted transactions and been “fantastic” for consumers and the industry. Ms Cairns brushed aside fears the ban would not be enforced, saying she “can't ever see it coming back in”. “Consumers would make their preference heard,” she said. Ms Cairns has also pinned the blame for a number of banking meltdowns on ageing technology and botched migrations. She insisted, however, that the industry was getting better.

App raises £6m

Banking app GoHenry has raised more than £6m on crowdfunding site Crowdcube. The service aims to teach children how to manage money with a pocket money debit card.

Fintech firm raises fund

Banked, a fintech start-up that manages access to swathes of customer data unleashed by open banking regulations, has raised £1.5m for its launch. The firm will use the cash to build and launch its platform.


Inflexion invests in vaccine provider

Inflexion has taken a £30m stake in Europe's largest vaccination provider, European LifeCare Group.


Babcock explored break-up

According to the Sunday Times, engineering group Babcock International is understood to have held discussions about strategic options, including a break-up, but decided against it. Meanwhile, the FT reports that Babcock is expected to announce an exceptional charge of around £100m this week, mainly against its helicopter business.

Britain’s manufacturers draw up contingency plans for hard Brexit

Britain’s leading manufacturing companies, including Rolls-Royce and Airbus, have drawn up contingency measures as they brace themselves for a hard Brexit.


Publisher pulls plug on ShortList magazine

ShortList, which claims to be UK's biggest men’s magazine, is being axed by its publisher, Shortlist Media, as advertising continues to move online. The closure is likely to result in some job losses.


Cautious buyers lured with pre-Christmas price drops

Asking prices have dropped 1.7% this month to an average of £302,023, marking the largest November drop since 2012, with the South East leading the way at a 2.1% decline. The price of newly marketed property across the UK is 0.2% cheaper it was than 12 months ago — the first national year-on-year price fall since November 2011. In Scotland, average asking prices are down by 1.3% month-on-month, while in Wales they have fallen by 1.2%. However the lowering of prices has signalled a slight uptick in activity, with a 1% year-on-year rise in the number of November sales.


Kingfisher to sell B&Q stores

Kingfisher is seeking to sell six B&Q stores in an effort to raise £125m to fund chief executive Veronique Laury's costly turnaround plan. The retailer is expected to report on Wednesday a 3% fall in like-for-like sales at B&Q, contributing to a 0.3% decline in underlying sales across the group, which also owns Screwfix.


Differing views on Brexit deal

Over 200 CEOs and entrepreneurs representing businesses with a combined turnover of over £2bn a year have written to Tory MPs calling on them to reject Theresa May’s Brexit deal, saying it represents “the greatest act of national humiliation in this proud nation’s recent history”. The letter, which was organised by John Longworth, the former director general of the British Chambers of Commerce, warns that the deal “offers the EU carte blanche to impose uncompetitive and deliberately punitive policies on the UK, selling British business down the river”. Meanwhile, the CBI’s president John Allan is set to endorse the withdrawal agreement, arguing that while it is not perfect it opens a “route to a long-term trade arrangement”. Other high-profile figures in the corporate world who have backed the PM’s draft agreement include Jürgen Maier, the UK chief executive of Siemens, and Warren East, the chief executive of Rolls-Royce.


£4bn lost in old accounts

New research has revealed that over £4bn is stashed in “zombie” bank accounts which are never checked. According to the findings from Moneysupermarket, one in five people have money in old accounts with an average £411 each.

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