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Daily News Roundup: Monday, 25th November 2019

Posted: 25th November 2019

BANKING

TSB customers suffer payments delays in fresh IT glitch

TSB was left embarrassed on Friday after customer payments were delayed just days after the bank insisted it had recovered and moved on from last years’ IT fiasco. Although the issue was fixed quickly there were concerns it was indicative of a systemic problem. A report on TSB's IT meltdown published last week by Slaughter and May concluded that "the new platform was not ready to support TSB's full customer base and [its IT provider] Sabis was not ready to operate the new platform". Meanwhile, TSB is expected to announce the closure of as many as 100 branches today - almost a fifth of its network. Observers predict redundancies of between 400 and 500. CEO Debbie Crosbie is also expected to announce an expansion of TSB's customer loans business.

Basel III will bring lending crunch and stagnation

Basel III regulations could shrink bank lending by €2.9trn and slash economic growth by 0.5% a year over the next decade, according to a report for the European Banking Federation (EBF) and UK Finance. Europe's banks will have to raise up to €400bn (£343bn) of fresh capital or slash lending to meet the rules. British banks might have to raise a further €70bn and avoid higher risk lending, particularly to SMEs. Simon Hills, director of prudential policy at UK Finance, said: "An increase of this magnitude will have knock-on effects for households and business borrowing costs as well as on economic growth. We must now work with legislators and regulators to ensure that the revised Basel framework is implemented sensitively.”

Nationwide profits hit by mortgage war

Nationwide has been hit by a mortgage price war and £36m in new charges for mis-sold payment protection insurance, which together have helped wipe 40% off first-half profits at the building society. Nationwide said its pre-tax profits fell to £309m during the six months to 30 September – down from £516m a year earlier. Nationwide said the mortgage price war had pushed down its profits from new business but ongoing investment in digital meant it was on course to launch its business banking offer for small businesses in 2020.

Virgin to take £450m PPI hit

Virgin Money is preparing to take a hit of up to £450m from PPI mis-selling compensation and analysts predict that with other mis-selling charges, as well as restructuring expenses from CYBG's £1.7bn acquisition, the bank will be dragged to a £250m loss for the year to the end of September. Virgin is also forecast to say mortgage competition drove a 2% drop in revenues to £1.65bn for 2018/19.

The bank branch of the future

The Telegraph considers how banks are changing the nature of the branch with Virgin Money said to be unveiling one its “lounges” in Manchester next month which will have a performance space and is capable of hosting music concerts. Santander is trialling a "work café" in Leeds while ING is installing extensive video conferencing facilities for customers to use.

RBS loses battle over PPI for insolvent customers

Royal Bank of Scotland could face a multi-million pound bill after the Court of Session rejected the bank’s appeal against an earlier ruling that the bank pay out successful PPI mis-selling claims even if they were to customers who previously owed the bank money but whose debts have been discharged.

Mettle to offer “drastically different” service

NatWest's new digital business bank Mettle will focus relentlessly on the customer says boss Marieke Flament, who is ramping up the roll-out of the brand after it went live on the app store in August.

Lloyds cuts hundreds more jobs

Lloyds Banking Group is cutting 416 jobs as part of a £200m cost-cutting drive as it struggles to raise revenues due to low interest rates. The latest cuts leave the bank with 1,122 fewer staff overall than a year ago. Lloyds has also shut 112 branches and has cut teams serving SMEs.

Tories plan return of 25-year mortgage deals

The Conservatives are planning to open up a “new market” in longer-term fixed-rate mortgages in a move the party says would give homeowners the ability to lock in historically low rates for as long as 25-years and also encourage investors to buy into mortgages with predictable long-term returns.

PRIVATE EQUITY

ECI to sell in-store music company

ECI Partners is preparing to put in-store music company Imagesound up for sale. The company, which also creates digital signs for its clients as well as personalised music, reported revenue growth of 12% last year to £17.3m.

INTERNATIONAL

Lagarde seeks stronger internal market

Christine Lagarde, the new president of the ECB, has called on eurozone countries to boost public investment to spur growth and innovation. Speaking in Frankfurt, Ms Lagarde said that the EU needed more integration in areas such as services, capital markets and the banking sector.

European banks slash $280bn from main US businesses

Deutsche Bank, Credit Suisse, UBS and Barclays have shifted $280bn of assets from their main US holding companies in the past three years, with assets held in more lightly regulated US branches increasing.

Westpac to strip executives of bonuses after laundering scandal

Westpac will close its LitePay payments system - implicated in one of Australia’s biggest ever money laundering scandals - and strip its executives of their short-term bonuses following an accountability review.

Tokyo woos hedge funds in crisis-hit Hong Kong

The Japanese and Singapore governments are attempting to lure hedge funds away from Hong Kong as Asian rivals to the territory see the crisis there as an opportunity to attract business.

AUTOMOTIVE

Aston Martin launches DBX

Aston Martin has unveiled its first ever SUV, hoping the £158,000 DBX will boost its flagging sales. Earlier this month, Aston Martin reported a £92.3m pre-tax loss for the past three quarters as sales volumes slid on "tough trading conditions" in the UK and Europe.

FINANCIAL SERVICES

OakNorth’s analytics division is UK fintech's secret star

The Sunday Telegraph profiles OakNorth’s Analytical Intelligence division, a platform which helps lenders decide whether or not to extend credit to SMEs. CEO Sunil Chandra says the company will help transform London into the financial heart of the digital age. It will be talent, technology and capital that form the basis of the next generation of companies, Chandra says, and it is the flow of capital that will enable firms to “hyperscale”. OakNorth plans to license its platform, which it credits for returning zero defaults on £4bn of loans to British companies, to existing banks for whom SME lending is a gap in the market.

Hargreaves accused over transfer delays

Hargreaves Lansdown has been criticised by its competitors amid claims customers are being forced to wait up to three months to transfer their assets to other investment platforms following the collapse of Neil Woodford’s investment empire. Elsewhere, The Central Bank of Ireland has backed calls by the Financial Conduct Authority to review investment fund rules in the wake of the scandal.

LSE set to win backing for Refinitiv deal

The London Stock Exchange (LSE) is expected to get the green light from shareholders on Tuesday for its £22bn deal to acquire data terminal provider Refinitiv, which is backed by Blackstone and media giant Thomson Reuters.

Aximetria integrates EURS

Fintech company Aximetria has announced its support for Euro-backed stablecoin EURS. Users of its next-generation personal finance app who lack bank accounts can transact fiat values and then get it into cash money.

Fund chiefs quit London as Brexit disruption lingers

The FT says the recent relocation of several fund industry chief executives from London to continental Europe suggests that the capital’s dominance as an investment management hub may be fading.

HEALTHCARE

Novartis agrees $9.7bn deal for US cholesterol drugmaker

Novartis is to acquire US drugmaker The Medicines Company for $9.7bn hoping its new cholesterol drug Inclisiran will prove ground-breaking.

LEISURE & HOSPITALITY

Branson among those eyeing the National Lottery

Sir Richard Branson is among those vying to win the licence to run the National Lottery, with media boss Richard Desmond along with Dutch and Czech lottery operators also hoping to become the next operator. Canadian-owned Camelot has run the National Lottery since its launch 25 years ago.

REAL ESTATE

Labour plans extra property tax on foreign buyers

Labour has pledged to put an extra tax on foreign companies and trusts buying property in the UK. It is part of the party's wider tax plans and would charge offshore firms 20% for property purchases, on top of existing stamp duties and surcharges.

New chief for Landsec

The shopping centre owner Land Securities has hired Mark Allan, boss of St Modwen Properties, as its next chief executive. He replaces Robert Noel, who announced in July his intention to retire next year. Landsec last week reported a £147m half-year loss.

RETAIL

M&S hires Tesco executive to help clothing revival

Marks & Spencer has hired Richard Price from Tesco to run its struggling clothing and home business. Mr Price, who is responsible for Tesco’s own-label clothing brand F&F, will assume the role from M&S chief executive Steve Rowe, who took personal charge of the clothing business after Jill McDonald was ousted by the retailer in July.

ECONOMY

Sterling falls on weak survey data

The pound weakened on Friday after surveys showed British business suffering its deepest downturn since mid-2016. According to the "flash" early reading of the IHS Markit/CIPS purchasing managers index both the services and manufacturing sectors contracted in November. Chris Williamson, chief business economist at IHS Markit, said: “The weak survey data puts the economy on course for a 0.2% drop in GDP in the fourth quarter, and pushes the PMI further into territory that would normally be associated with the Bank of England adding more stimulus to the economy.”

Business warns Labour’s reforms will wreck the economy

The Labour party’s tax plans have come under fire from the business community which says measures such as hiking corporation tax and dividend tax rates would stymie innovation and hurt the economy. The City UK says a new financial transactions tax would be "bad for business, bad for investors, bad for savers, and bad for the economy".

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