Banks fight back against the fintechs
The Telegraph’s Iain Withers profiles how the big UK banks are launching their own financial technology start-ups to compete against the fast-growing digital banks such as Monzo, Starling and Tandem. RBS is developing a spin-out online bank called Bó, which is expected to launch in beta testing mode next year. Rivals Barclays, HSBC and Lloyds also have launched separate digital hubs churning out potential new services scattered across London’s tech clusters. Josh Bottomley, head of HSBC’s digital operations, said the bank was investing heavily in fintech and has so far created “1,000 jobs that didn’t previously exist”. Robin Knox, CEO of Tandem, says he is not surprised that some high street banks are launching new brands. He is relaxed about the threat they pose, adding: “They may try to emulate start-ups with new businesses with new names in new offices, but they will struggle to compete with us in terms of speed and culture.”
Nationwide seeks to branch out
The Times carries an interview with Joe Garner, the chief executive of Nationwide. The building society is in the process of giving its 670 branches a full makeover, with more homely furnishings and a coffee area. The number of current accounts opened in Nationwide branches is up by 38% compared with five years ago, something Mr Garner says shows that branches have value. He also touches on technology and says there is now an insatiable demand for banking services. Nationwide, he contends, must be agile enough to harness whatever the financial technology innovators launch. The Times notes that the building society has set up a £50m fund to invest in fintech start-ups.
Carney: Banks can cope with no-deal
The Governor of the Bank of England, Mark Carney, has said that Britain could withstand a hard Brexit and tough trade relations after Britain leaves the EU. The BoE does not see the scenario as the most likely outcome in March next year, when Britain formally leaves the EU, but it is still possible. Mr Carney said: “We aren't hoping for the best, we're preparing for the worst in several ways.”. Mr Carney added that about £100trn of cross-border derivative contracts may be disrupted by loss of regulatory permissions for clearing houses after Brexit.
Campaigners call for bank justice
Campaigners have called on ministers to launch a new system for businesses mistreated by their banks, warning that tens of thousands of firms could be locked out of justice unless the government acts. Concerns have been raised that a planned extension to the Financial Ombudsman Service, revealed last week, would only cater to firms with turnover of less than £6.5m a year and fewer than 50 employees. The All Party Parliamentary Group on Fair Business Banking estimates 42,000 British companies would not fit within these parameters and so would have to seek justice by launching costly legal actions.
Lloyds planning £2bn share buyback
According to reports, Lloyds Banking Group is working on a plan to double the scale of its share buyback scheme next year to £2bn. The bank is hoping to return £4.5bn of capital to shareholders through the buyback and by paying a higher dividend. Lloyds is due to announce its third-quarter results on Thursday, with analysts at UBS describing the lender as “undervalued”.
RBS set to post higher profits
RBS is expected to post higher profits this week amid a drop in litigation and conduct charges. A consensus of City analysts is forecasting a rise in attributable profits to £507m for the three months to September, up from £392m a year earlier.
13m affected by branch closures
According to analysis by the BBC, about 13m adults in the UK live near arears where at least half of the local banks and building societies have closed. The figures from the ONS show that nearly 6,000 local branches have shut since 2010, a fall of a third. Separate figures from Link show that between January and August of this year, 1,400 free to use cash machines closed across Great Britain.
Standard Chartered plans job cuts as shareholder gloom deepens
Standard Chartered is planning a fresh round of job cuts as it looks to reduce costs. The move comes as shareholders are becoming increasingly concerned about the bank’s turnaround strategy.
Bramson faces his toughest test to win over Barclays shareholders
The FT examines the situation at Barclays where activist shareholder Edward Bramson is struggling to convince investors to push for change at the bank.
Former trader charged in Euribor case
The Serious Fraud Office has charged Andreas Hauschild, a former trader with Deutsche Bank, with conspiracy to defraud in connection with the Euribor rate-rigging scandal.
French fund eyes investment in Britain’s offshore wind
Omnes Capital, the French private equity firm behind the listing of renewable energy firm Neoen, is plotting a major push into the British offshore wind industry next year. Serge Savasta, managing partner of Omnes, said that Brexit has had no bearing on the fund’s first planned move into the UK. “It does not put us off. On the contrary, this is a market with a point of view that is different to many countries and it is the leader in wind power,” he said.
Apollo joins queue of buyout groups betting on Japan
Apollo Global Management is hiring a team of dealmakers and opening an office in Japan, according to the FT.
Tiger Global raises $3.75bn for tech investments
Tiger Global has raised $3.75bn for its latest venture capital fund. The fund will focus on consumer internet, cloud and industry-specific software investments.
Italian central bank warns of slowdown
The Bank of Italy has said that the nation’s economy had slowed to a virtual standstill, underlining concerns about the country’s growth prospects. The warning led to a sell-off in Italian bank shares, with Unicredit down 1% and Monte dei Paschi di Siena down 4.7%.
UBS warns staff to avoid China
UBS has asked some of its bankers not to travel to China after an employee was contacted by authorities in the country. Meanwhile, a Fabiana Abdel-Malek, a former compliance officer at UBS, will stand trial this week in London on 10 counts of insider trading.
Goldman Sachs shuffles top Asia leadership
Todd Leland is to become head of investment banking for Goldman Sachs in Asia. He will replace Andrea Vella and Kate Richdale as head of the unit.
NAB cuts 300 staff
Andrew Thorburn, the CEO of National Australia Bank, has admitted that about 300 staff at the bank have been fired or left the company as a result of internal investigations into wrongdoing. He added that it had been a "difficult and shameful year".
Ford raises threat of job cuts
Ford is expected to report another loss-making quarter in Europe when it posts results for three months to September this week. Ford lost £55.8m in the previous quarter and another fall could lead to potential job cuts. Analysts at Morgan Stanley believe the company could shed up to 24,000 workers — 12% of its global workforce — with the pain being largely felt across Europe and China.
Car bosses fear for key industries
Ralf Speth, the boss of Jaguar Land Rover, has warned that key industries will be destroyed by a hard Brexit. Meanwhile, Toyota president Akio Toyoda has warned that a no-deal Brexit should be avoided “at all costs” and that continued contribution to UK and EU economies from Japanese carmakers would require trade and shared standards to remain unimpeded.
Daimler warns on profits for second time this year
Daimler has issued its second profit warning this year, causing the shares to reach a five-year low. The carmaker reported a 27% drop in earnings to €2.49bn.
Addison Lee to launch self-driving taxis
Addison Lee, Europe’s largest private hire car service company, has unveiled plans to launch self-driving taxis in London by 2021.
Airlines boost salaries to combat critical shortage of senior pilots
The FT’s Josh Spero examines how pay for pilots is increasing as the boom in global air travel and a tighter labour market increases.
Is the UK construction industry having its ‘uber moment’?
The FT explores how disruption by new technologies is catching up with the UK construction industry, with off-site modular manufacturing seen as a potential answer to the sector’s lagging growth.
LSE to increase stake in clearing house
The London Stock Exchange is to increase its stake in LCH, the UK clearing house, despite uncertainty over the regulation of the sector post-Brexit. The LSE said it plans to spend £384m to acquire an additional stake of up to 15.1% in the business. Boss David Schwimmer said the move reflects the group's “continued confidence in LCH's opportunities for further growth as it develops its business in partnership with customers”.
Provident continues to recover
Provident has said it is on a stable footing as it continues to recover from a string of regulatory sanctions, but that home credit collections are still below historic levels. The lender said the number of active credit customers dropped to 449,000, down from 464,000 in June, “reflecting the continued focus on collections performance rather than new customer recruitment”. Customer numbers at Vanquis Bank, which is owned by Provident, rose 6.3% to 1.8m in the third quarter.
LEISURE AND HOSPITALITY
IHG revenue growth slows despite expansion
Intercontinental Hotels Group saw revenue growth slow in the third quarter. The British multinational hotels giant said global revenue per available room (revpar) rose 1% in the period and was flat in the US.
UK factories lagging behind
Research by the EEF has found that foreign-owned manufacturing companies are twice as productive as their British rivals. The research showed that foreign-owned firms invest almost €9,000 per employee more than domestic companies. The EEF attributed Britain's weak productivity to factors including weaker investment and management practices.
MEDIA AND ENTERTAINMENT
Facebook hires Clegg as head of communications
Facebook has hired former deputy prime minister Sir Nick Clegg as head of its global affairs and communications team.
Alternative finance making inroads into property finance
New research from Altus shows that banks have lost more than half of the market for property development loans over the past decade. Before the global financial crisis, banks controlled the market for property developers. However, Altus said that has since fallen to 46%, as construction groups have embraced alternative lenders offering more flexible terms and larger amounts of funding.
More Debenhams stores at risk
Debenhams is considering closing another batch of stores as part of a £100m emergency cost-cutting plan, beyond the 10 sites already pinpointed by the board. The extent of store closures will depend on negotiations with landlords. Executives are said to believe that the chain can cut back to having only 100 stores.
Spurs forced to extend loan
Tottenham Hotspur FC have been forced to extend their stadium loan to £500m to cover the rising costs of the delayed construction.
Wages expected to rise
Economists are expecting pay to rise by 3% next year while inflation will slow to 2%, meaning that real incomes will rise by 1% in 2019. When a fuller picture of living standards is included, economists predict real household disposable income growth of 1.4% next year, almost three times the OBR’s forecast of 0.5%. Peter Dixon at Commerzbank commented: “Personal incomes were remarkably weak through 2016 and 2017, growing [in cash terms] by 2.25%. We think this year that will be closer to 4% and similar next year.”
Investors wary about UK banks due to Brexit
A survey of City investors by UBS has found that 67% of them are now very bearish on the market outlook for Britain’s biggest high street bank, Lloyds, and 40% saw a negative outlook for HSBC. UBS said the findings reflected a more pessimistic view of UK economic prospects due to the "political and economic risks around Brexit".