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Daily News Roundup: Monday, 23rd September 2019

Posted: 23rd September 2019


RBS names Rose as new chief

RBS has named Alison Rose as its new chief executive, making her the first woman to lead one of the UK’s big four banks. Ms Rose, who is currently the CEO of the commercial and private banking division, will replace Ross McEwan, who is set to become chief executive of National Australia Bank, in November. Ms Rose will receive a salary of £1.1m, £1.1m in shares and could receive a share-bonus of £1.93m if she hits all of her targets. RBS chairman Sir Howard Davies said: “I am delighted that we have appointed Alison as our new CEO. She brings extensive experience and a track record of success.” RBS has granted Mr McEwan so-called “good leaver” status after it decided NAB was not a major rival, granting him a multi-million pound bonus pot.

Low tech banks beset by problems

Official figures have revealed that banks are being hit with a key computer problem or internet security alert almost every day on average. According to the Financial Conduct Authority, there were 336 significant problems at 31 banks in the UK between July 2018 and June this year. Of these, 150 took place at the big seven high-street banks: NatWest, Barclays, Lloyds, RBS, Santander, HSBC and TSB. The worst offender was Barclays, which had 33. Digital-only banks did better, with Starling reporting no incidents and Monzo reporting two. A spokesperson for UK Finance said: “Operational resilience is crucial in a modern financial system and is a key priority for the industry.”

New bank customers face weekly wait for online access

Figures from the Financial Conduct Authority have revealed that traditional high street banks are taking a week or more to give new customers access to online banking. It takes an average of nine days for an M&S Bank or Nationwide customer to be given full access to online banking after applying for an account, while it takes RBS and NatWest eight days. Santander usually takes seven days and Barclays five. Lloyds and HSBC take two and three days respectively. As they are digital only, Monzo and Starling offer immediate online banking to their new customers as a matter of course, while TSB, Metro Bank and Yorkshire Bank normally offer same-day access.

Amex to launch payment service for online shopping

American Express is planning to launch a new service enabling UK consumers to pay for goods online directly from their bank account and is partnering with a number of online retailers to launch its “Pay with bank transfer” service later this year. The service will be available to thousands of current account holders, regardless of whether they are American Express card members.

Standard Chartered investors in pay policy warning

Standard Chartered shareholders have warned that the bank still needs to shift its position on pay, despite holding talks in the aftermath of an investor revolt over chief executive Bill Winters’ pay. The bank saw 36% of votes cast against its new executive pay policy at its annual investor meeting in May. Three top 20 shareholders say the issue still needs to be addressed, with one telling the Times: “We would be disappointed come January or February if we’re in the same place.”

Shared branches could be the answer

Derek French, the former director of the Campaign for Community Banking Services, believes shared branches are the answer to bank closures, saying hubs can be operated by third parties that can offer a full range of transactional services on behalf of participating banks.

Santander drafts plans to replace Vadera

Santander has drafted plans to replace Baroness Vadera as chair of its UK bank if she becomes the next Bank of England governor, with senior independent director Scott Wheway lined up if Baroness Vadera replaces Mark Carney.

Banks join climate pledge

Barclays and Deutsche Bank are among 130 banks with combined total assets worth more than £37.7trn that yesterday adopted new UN-backed "responsible banking" principles to fight climate change.

Sainsbury’s set to stop mortgage lending

Sainsbury's is expected to exit its £1.47bn mortgage book, which represents about a fifth of its total lending.


KKR sells stake in Trainline

KKR has sold a £261m stake in train ticketing app Trainline which floated in June. Despite the major share sale, KKR will retain 59.6m shares in the business, representing a 12% stake.


Europe’s private banks hit by worst year since crisis

Profits across western Europe's €6trn private banking sector fell 8% to €13.5bn in 2018 – down from the record €15.4bn registered in 2017, according to a survey by McKinsey.

Rogue trader lost $320m

Mitsubishi Corporation has revealed that a rogue trader in Singapore lost about $320m. The Japanese trading house said that it had dismissed the employee of its subsidiary Petro-Diamond Singapore.

Hong Kong Stock Exchange turns to HSBC

HSBC has been hired by Hong Kong Exchanges and Clearing (HKEX) to advise it on its bid to acquire the London Stock Exchange. UBS has also been drafted in to add credibility to the HKEX bid. The LSE recently rejected a £32bn bid.

Deutsche Bank seeks to muscle in on wealth management boom

Deutsche Bank is to boost its wealth management division, hiring hundreds of staff and adding almost €100bn of assets as it looks to move closer to sector leaders UBS and Credit Suisse.

Goldman Sachs plans to launch stocks and shares Isa

Goldman Sachs is set to launch a stocks and shares Isa as it enters the UK retail investment market, putting it in competition with firms such as Hargreaves Lansdown and AJ Bell.


No comment from Wrightbus over rescue talks

Bus maker Wrightbus has refused to deny or confirm reports that two major bidders have withdrawn from talks aimed at saving the firm, with it reported over the weekend that Chinese engineering firm Weichai and Jo Bamford, the son of JCB chairman Lord Bamford, had pulled out. The firm also declined to comment on whether administration was now likely.


Airlines urge Trump not to hit Airbus with tariffs

Airlines have called on President Trump not to impose tariffs on European plane-maker Airbus in a long-running row over state subsidies. US carriers, including American, Delta and JetBlue, have asked US trade representative Robert Lighthizer to warn that tariffs could lead to hikes in costs for airlines and passengers.


BIS warns of ‘rapid growth of leveraged finance’

The Bank for International Settlements (BIS) has warned that a late-cycle surge in ‘leveraged loans’ has echoes of financial engineering before the Lehman crisis. The BIS said the high-risk loans have risen to $1.4trn and are increasingly being sliced and diced much like subprime mortgage debt before 2007. “The rapid growth of leveraged finance and CLOs has parallels with developments in the US subprime mortgage market and CDOs during the run-up to the global financial crisis,” said the BIS in its quarterly report.

Lloyd’s of London set to launch reforms of its culture

Lloyd’s of London will launch a series of reforms aimed at improving its corporate culture this week, including a new scrutiny board and internal marketing crackdown. The insurance market will reportedly target the 45,000 underwriters, brokers and Lloyd’s staff with a campaign urging them to speak up about bullying, to "break the myth that it's just banter". The changes come after Lloyd’s received damning accounts of harassment and bullying within the market.

Investec expects dip in profits

Investec has warned on its profits for the first half of 2019 as challenges in its specialist UK banking business dragged down the group. The firm expects headline earnings per share to be roughly 15-18% lower for the six months to 30 September, adding that it would take a pre-tax profit hit of £42m during the period.

SJP cancels cruises for financial advisers

St. James’s Place has scrapped with immediate effect controversial overseas trips and cruises which were handed to financial advisers as rewards for attracting new business. Meanwhile, the Sunday Times reports that SJP customers are paying significantly more to invest with fund managers who run cheaper but almost identical portfolios elsewhere.

Woodford’s truthfulness called into question

Peter Hargreaves, the founder of Hargreaves Lansdown, has criticised fund manager Neil Woodford, suggesting that he was “not truthful” about the performance of his frozen Equity Income Fund. Mr Hargreaves also criticised his old company for holding too many of Woodford's funds and failing to spot the crisis until it was too late.

Are asset managers ready to take responsibility?

The FT considers the potential impact of SMCR, suggesting it could improve governance and company culture and make it easier for the Financial Conduct Authority to hold people to account for misdemeanours.


Thomas Cook collapses

Last-minute talks between Thomas Cook, its banks and shareholders have failed, with the travel firm collapsing. The UK Civil Aviation Authority said the tour operator has "ceased trading with immediate effect". The firm’s failure puts 22,000 jobs at risk, including 9,000 in the UK.


Manufacturing to be hit by no-deal

Analysis of the manufacturing industry by Make UK suggests that some of Britain's worst-off regions will be hit hardest in the event of a no-deal Brexit. The report says regions heavily dependent on exporting to the European Union, such as Wales and the North East of England, will be hit in a no-deal scenario. The analysis looked at Office for National Statistics and HMRC data and reveals that London and the South East are set to become the country's biggest manufacturing regions.


Landlords consider position after WeWork IPO delay

Landlords have begun contingency planning following the shelving of the WeWork IPO. The delay will stop WeWork from accessing a $6bn credit facility that had been contingent on it raising $3bn in a public listing. Now global property investor Hines has held "internal discussions" about how it would deal with a sudden flood of office space leased to WeWork being left empty across its portfolio.


Singer leaves role as M&S’s finance director

Marks & Spencer has reported that its finance director Humphrey Singer has decided to resign from his role for personal reasons. According to people familiar with the situation, M&S has already held talks with a number of possible successors.

Changes afoot at John Lewis

The Sunday Times reports that Sir Charlie Mayfield, the outgoing chairman of John Lewis, is preparing a restructuring drive that aims to run the department store chain and Waitrose closer together, paving the way for potential job losses.


Spurs score refinancing agreement

Tottenham Hotspur have announced a refinancing plan for their new £1bn stadium. To support construction, the club borrowed £637m from Goldman Sachs, Bank of America and HSBC which had been due for repayment in 2022. However, £525m of the debt has been converted into a bond scheme, with staged maturities of between 15 and 30 years.


Dame Helena among BoE candidates

Legal & General’s head of personal investing Dame Helena Morrissey is in the running to become the first female Governor of the Bank of England (BoE) and is believed to be one of about nine candidates being considered for the position. Other frontrunners reportedly include Financial Conduct Authority chief executive Andrew Bailey, and Sir Jon Cunliffe and Ben Broadbent, who both currently serve as deputy governors at the BoE.

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