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Daily News Roundup: Monday, 21st October 2019

Posted: 21st October 2019

BANKING

Nationwide to refund £2m for PPI breaches

The Competition and Markets Authority has told Nationwide to refund £2m to customers who received inaccurate information about the cost of PPI, with the lender failing to send - or sending inaccurate - reminders. Nationwide has also been ordered to appoint an independent body to audit its PPI processes. Meanwhile, several papers looks ahead to Royal Bank of Scotland’s third quarter figures – the final set of numbers released under Ross McEwan before new CEO Alison Rose takes the helm. The bank has already warned it will need to take a hit of up to £900m after a last-minute surge in PPI claims.

Matheson set for RBS exit

Les Matheson, Royal Bank of Scotland’s chief executive for personal banking, is preparing to step down. He will reportedly step aside after a successor has been chosen, with his departure expected to form part of a senior management shake-up under RBS’ new CEO Alison Rose. RBS will consider internal and external candidates as it looks to replace Mr Matheson, City AM suggests.

Barclays urged to rethink Post Office plan

Business Secretary Andrea Leadsom has called on Barclays to reverse its decision to stop savers withdrawing their cash from Post Offices. Post Office Minister Kelly Tolhurst has also urged the bank to rethink the plan, calling Matt Hammerstein, UK chief executive of Barclays. Former pensions minister Baroness Ros Altmann commented: “I'm delighted that Andrea Leadsom and any other ministers are pressuring Barclays.”

Bramson to ease up on Barclays

Corporate raider Edward Bramson will reportedly tell Sherborne investors that he plans to ease a high-profile campaign against Barclays which has seen him call for cuts in its investment bank. Mr Bramson, who controls a 5.5% stake in Barclays, has told Sherborne Investors shareholders he intends to allow Barclays' chairman Nigel Higgins to make his own plans. Less than 5% of Barclays investors backed Mr Bramson’s bid to get on the board in May.

RBS may curb investment arm

RBS could trim its investment bank to a third of its current size in 2020, sources have told the Mail on Sunday, saying NatWest Markets faces cuts because its returns are weaker than other divisions. A person close to the bank said: “The investment bank is now more of a distraction - a side issue and an annoyance. It is already in managed decline.”

HSBC plans First Direct relaunch

HSBC will look to overhaul its First Direct brand to help it compete with digital rivals such as Monzo, with CEO Joe Gordon saying it will become "more accessible to a wider population".

StanChart’s Bill Winters set to take pay cut

Standard Chartered CEO Bill Winters is planning to take a voluntary pay cut following a dispute over his pension allowance which saw almost 40% of shareholders vote against the remuneration policy.

Ebury set for first takeover

Banking start-up Ebury is set to unveil its first-ever takeover, with a deal for payments outfit Frontierpay expected to be announced this week.

Metro mulls Hill’s expenses

Metro Bank is reportedly weighing whether to continue funding chairman Vernon Hill's £120,000-a-year expense allowance until March, when his contract officially ends, or to stop it when he steps down as chairman and quits the board in December.

Psychologists ensure app is user-friendly

Royal Bank of Scotland has hired psychologists to make sure its Bó banking app is not condescending to customers. The new service is being launched to compete with fintech start-ups such as Monzo, Starling Bank and Revolut.

PRIVATE EQUITY

Private deal number trebles

The value of private equity deals taking UK-listed companies private has more than trebled over the past year, new analysis shows. The total valuation of deals taking UK-listed firms off the stock market rose to £14bn in 2018/19, marking a 278% increase on the previous year’s total of £3.7bn.

UK venture capital arm to write ‘big cheques’ for tech sector

British Patient Capital, British Business Bank’s venture capital arm, will “write big cheques” to support the UK tech sector, with it reportedly holding £2.5bn that it can invest in start-ups.

Advent to make Cobham assurances

Advent International is reportedly close to committing to guarantees with the Government to ensure its proposed £4bn deal to buy defence firm Cobham wins ministers’ approval, with it understood to be offering continued investment in UK-based research and development, as well as vowing to maintain employment levels in Britain.

INTERNATIONAL

German banks supervisor warns of new cycle of deregulation

BaFin President Felix Hufeld has voiced concern over politicians loosening post-crisis rules to boost growth, saying he is “afraid that we are pushed into a new cycle of downward regulation”.

Goldman Sachs banker charged with insider trading

Goldman Sachs banker Bryan Cohen has been charged with insider trading over a scheme that allegedly generated $2.6m in illegal profits. Parallel civil charges were filed by the Securities and Exchange Commission.

Lazard deal maker resigns

Deal maker Matthieu Pigasse had resigned after 17 years at Lazard to pursue “a new entrepreneurial project”.

FINANCIAL SERVICES

Regulators urged to reform fund management

Ian Sayers, head of the Association of Investment Companies investor group, has urged the Financial Conduct Authority to draw up stricter rules on open ended funds. He argues that tighter regulation is needed “as soon as possible”, calling for reform by the end of the year. Mr Sayers also accused the FCA of moving “too slowly” to protect investors, pointing to the plight of Woodford investors and saying: “All the warning signs were there.”

FCA denies pressuring administrator to close fund

The Financial Conduct Authority (FCA) has dismissed claims it put pressure on administrators to close Neil Woodford’s flagship fund over fears its suspension was undermining confidence in the industry. The FCA said claims it pressured Link Fund Solutions to shut down the Equity Income fund are “categorically untrue”. A spokesman for the regulator insisted: “There was no pressure from the FCA put on Link to wind down the Fund.” A spokesperson for Link added that it “can’t comment on what is in the FCA’s mind”.

FCA in P2P clampdown

The Financial Conduct Authority is conducting its first clampdown on the peer-to-peer sector since taking control of it five years ago. New rules will seek to protect investors, with measures including a cap on investments. The rules come after several points of concern were identified in the sector, including instances where investors said they did not understand the arrangement they entered; cases where returns fell far short of those advertised; and delays in withdrawing funds.

SFO closes Libor probe

The Serious Fraud Office is shutting down its seven-year investigation into the rigging of Libor interest rates. The probe, launched in 2012 in the wake of allegations that traders manipulated estimates to boost profits and bonuses, saw 13 individuals charged with conspiracy to defraud and led to five convictions.

London set to keep its crown, says head of Citi Europe

David Livingstone, chief executive of Citigroup in Europe, believes the City of London will remain the region's top financial centre, whatever the outcome of Brexit.

LEISURE AND HOSPITALITY

InterContinental Hotels hit by Hong Kong protests

Holiday Inn owner InterContinental Hotels Group has warned that protests in Hong Kong are hurting sales, saying it expects to take a $5m hit in the region as revenue per room in Hong Kong slumped 36% in Q3. Overall, Intercontinental Hotels Group said quarterly revenue per room fell 0.8%.

MEDIA AND ENTERTAINMENT

Thomson Reuters begins search for new chief executive

Thomson Reuters has appointed Spencer Stuart to draw up a shortlist of internal and external candidates as it begins the process of finding a successor for CEO Jim Smith.

REAL ESTATE

Pension value could outstrip property

Analysis by Hymans Robertson suggests the value of the average final-salary pension is on course to overtake that of a typical property for the first time next year. The study found that the average final-salary pension was worth £216,000 in July this year, compared with £110,000 in July 2008, while the average UK property price is currently £234,835, compared with £176,092 in 2008. Hymans Robertson analysts calculate that, if no Brexit deal is agreed, pension values could rise 15% next year to an average of £248,400 on the back of low interest rates, while property values could slip 7% to an average of £218,396.

Property listings dip

Figures from Rightmove show that the average number of new property listings each week this month has been 24,539, the lowest October figure in a decade and down 13.5% on last year. The figures also show that the price of property coming to market has seen its lowest monthly rise in an October since 2008, climbing 0.6%. The number of sales agreed in October is down 0.5% year-on-year.

RETAIL

Bonmarché falls into administration

Fashion retailer Bonmarché has fallen into administration. The chain’s 318 stores and concessions will remain open while administrators look for a buyer. Bonmarché, which is majority owned by retail tycoon Philip Day’s investment vehicle Spectre, reportedly considered a refinancing deal and a CVA.

ECONOMY

King: UK neglecting economic challenges

Former Bank of England (BoE) governor Lord Mervyn King has warned Britain is failing to address problems with the economy because there is too much focus on Brexit. Speaking on the fringes of the International Monetary Fund's annual meetings in Washington DC, the former BoE boss said: “We're not looking at the underlying economic challenges for the UK.” He also suggested that opting to exit the EU is “not likely to have a major impact on the UK economy in any way.”

Carney: Brexit deal could boost economy

Bank of England governor Mark Carney has welcomed the Brexit deal negotiated between the UK and EU, saying it is likely to boost economic growth, telling Bloomberg TV: “It is good news that there is an agreement. I would expect the economy to pick up from quite a subdued pace.” Mr Carney said it was “important to have a transition to a new relationship” with the EU and “that’s what a deal would deliver if it is adopted”.

OTHER

Half of Britons put no money aside

Figures from NatWest show that 50% of Britons do not put anything aside when they are paid, while 25% spend more than they earn, going into debt or dipping into savings. The research looked at 750,000 of the bank’s customers, with it found that those earning more than £100,000 a year were the only salary bracket that regularly saved money.

Millennials first generation to be less well off

Millennials are the first generation since the Second World War to be worse off than their predecessors, a study has revealed. The Institute for Fiscal Studies says those born in the 1980s on average have 20% less wealth than those born in the 1970s – mainly due to a drop in home ownership.

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