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Daily News Roundup: Monday, 28th January 2019

Posted: 28th January 2019

BANKING

Challenger banks seek business boost from RBS grant

TSB is aiming to triple its share of the small business banking market if it wins a £120m grant from Royal Bank of Scotland to promote competition. TSB already has 2% of the small business market, equating to about 100,000 customers, and hopes to add about 200,000. Richard Davies, TSB’s director of commercial banking, said that it had invested £12m in training staff and forming partnerships with groups such as Enterprise Nation to boost its share of small business lending, and that winning one of the grants would provide “real acceleration”. Elsewhere, Metro Bank has set a target of signing up 400,000 new business banking customers. The challenger bank said it wanted to increase its market share “rapidly” from 2% to 9% once the RBS scheme goes live. Separately, the FT says Metro Bank investors are questioning the sustainability of the lender’s business model following last week’s profit warning.

Banks to issue Brexit advice to SMEs

UK Finance is teaming up with the FSB, the CBI and the British Chambers of Commerce as well as trade groups and accountancy bodies to draw up emergency no-deal Brexit support for small businesses. They predict a surge in demand for loans and cashflow problems resulting from delays at ports and broader economic disruption. One source told the Times: “We would like people to stop and think about the impact of a possible no deal, not to scaremonger but for scenario planning. We want to give reassurance that banks will retain capacity to lend.” The alliance plans to issue non-financial advice too, such as on import/export issues.

Lloyds offers new 100% mortgage

Lloyds Banking Group is to offer 100% mortgages to first-time buyers in a return to lending last seen before the financial crash. The Lend a Hand mortgage requires a parent, grandparent or other close family member to lock away enough money to cover the equivalent of a 10% deposit. In return, they will earn a fixed 2.5% interest on this sum. Vim Maru, group director of Lloyds Banking Group, said: “We are committed to lending £30bn to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper - and Lend a Hand is one of the ways we will do this.”

Investors sue HSBC over tax schemes

Hundreds of investors in tax-avoidance schemes have launched a £100m lawsuit against HSBC's private bank, claiming it conspired to defraud them. A total of 248 wealthy and high-profile figures who put money into Ingenious Media schemes are attempting to recoup losses after HMRC challenged their legality. Under the schemes, investors made a cash contribution and were lent money by an Ingenious company to make further investments. But the investors say they did not know a “large proportion of the money” was in fact borrowed from HSBC, arguing that the bank “dishonestly assisted” Ingenious.

FCA examining banks’ use of customer data

The Financial Conduct Authority is monitoring the ways in which banks are acquiring customers’ data and whether they are using it to get some customers to pay more for products. The regulator has raised concerns that the banks controlling the most data could identify those customers who do not move their money when interest rates drop, and so are easy to exploit.

Barclays chiefs ‘laid misleading trail’

The trial of four senior Barclays executives has heard that the defendants allegedly laid a "misleading audit trail" when sealing a deal with Qatar during the financial crisis to avoid being "rumbled" and ending up in jail. The Serious Fraud Office alleges that four defendants, including John Varley, the bank's chief executive at the time, secretly paid £322m to Qatar in return for its investment in two capital calls. The SFO says that "advisory services agreements", or ASAs, struck with Qatar at the time were actually a "smokescreen" to funnel extra money to the Gulf state.

Banks urged to act on APP fraud

The Telegraph’s Marc Sidwell calls on banks to do more to tackle authorised push payment (APP) fraud. Criminals used APP fraud to trick bank customers out of £145m in the first half of 2018.

Up to four in 10 Yorkshire branches lost

New figures have revealed that as many as four in 10 bank branches across Yorkshire and the Humber have been closed in less than a decade. Banks in the region have shut 445 of their outlets, the majority of which were branches but also headquarters and other offices, reducing the number from 1,125 to 680 since 2010.

Britons take months to pay off festive loans

Research by digital bank U Account has found a third of Britons will still be paying off their spending on Christmas gifts in June, while a further 10% will not finish repaying their festive loans until December.

PRIVATE EQUITY

KKR loses two top executives in European operation

John Empson has left his role as head of capital markets in Europe for KKR. Meanwhile, it has emerged that KKR partner Marc Ciancimino left at the end of last year.

Michael Milken’s son leaves private equity group Apollo

Lance Milken has left Apollo Global Management, the private equity group founded by former colleagues of his father, to launch a new family office.

INTERNATIONAL

Bank chiefs called to Congress

The chief executives of JP Morgan, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley are expected to be called to Congress for questioning in the Spring. Maxine Waters, chairwoman of the House financial services committee, has drafted legislation intended to break up “oversized” banks.

Cerberus and Centerbridge seek minority stake in NordLB

Rival private equity firms Cerberus and Centerbridge have joined forced to launch a bid for German lender NordLB.

AVIATION

MEPs push to relax aviation rules if no-deal Brexit goes ahead

The FT reports that the European Parliament is pushing to relax aviation ownership rules that threaten the flying rights of airlines in the event of a no-deal Brexit.

Shareholder seeks removal of Flybe chairman

Hosking Partners, the largest shareholder in Flybe, has called on the airline to dismiss its chairman Simon Laffin.

CONSTRUCTION

Kier in sell-off to cut debt pile

Kier is in talks to sell its housing maintenance business as part of a plan to offload “non-core” divisions to raise up to £50m. The £240m-turnover division is expected to fetch £20m to £30m.

FINANCIAL SERVICES

AI fraudbuster raises £25m

Artificial intelligence developer Featurespace has raised £25m to grow internationally. The company’s software uses AI and behavioural analytics to identify credit card fraud more accurately. It also helps financial firms to detect and prevent fraud in real time.

FairFX wary of Brexit headwinds

FairFX predicts adjusted earnings before interest, taxes and other charges jumped to about £7.5m from £1m in 2017. However, the travel money and payments company added that Brexit negotiations “continue to provide macroeconomic headwinds for the business.”

Franklin Templeton and Invesco ranked worst-selling funds in 2018

According to Morningstar, the data provider, Franklin Templeton and Invesco were ranked as the worst-selling mutual fund managers globally last year.

Mastercard trumps Visa’s Earthport bid

Mastercard has made a £233m offer for payments processor Earthport. The 33p-a-share cash offer trumps last month's 30p-a-share bid by Visa.

LEISURE AND HOSPITALITY

Fuller’s sells drinks business

Brewer Fuller's is to sell its entire drinks business to Japan's biggest brewer Asahi in a £250m deal. Fuller's will now focus on its hotels and pubs business, which generates most of its profits.

Hilton plots expansion

Hilton is set to accelerate its expansion in the UK after extending its partnership with property investment firm Dominvs Group. Hilton is set to open at least 35 hotels in the next two years across the UK.

MANUFACTURING

Rolls-Royce seeks government funds for nuclear power project

A consortium headed by Rolls-Royce has asked for more than £200m in government funding to help develop its project for small nuclear reactors.

REAL ESTATE

Mortgage approvals fall

The number of mortgages being approved fell to its lowest level in two and a half years last month, according to UK Finance. Approvals fell on a seasonally adjusted basis to 73,029 in December, the third consecutive monthly fall and the lowest figure since August 2016. Remortgaging approvals fell by 2.2% to 26,600 on the previous month, while loans for house purchases fell by 1% to 38,779. Approvals for other secured lending fell by 5% to 7,650.

London property transactions drop to decade low

Transactions in the central London housing market have dropped to their lowest in a decade, as political uncertainty around Brexit begins to bite.

RETAIL

Unions seek Tesco meeting over job cuts

Two of the UK’s biggest unions, Unite and USDAW, are trying to arrange urgent meetings with bosses at Tesco following Saturday’s announcement that 15,000 jobs are set to be axed. In the last three years Tesco has already cut 36,000 staff from its workforce, which currently stands at 440,000. The nation’s biggest supermarket is under intense pressure from rivals, particularly Aldi and Lidl, and CEO Dave Lewis wants to reduce costs by £1.5bn by 2020.

ECONOMY

UK growth eclipses eurozone

Official figures out this week are set to show the eurozone trailing behind Britain’s economy. City forecasters have pencilled in growth of 0.3% in the final quarter of 2018 for the UK, with the currency bloc’s economy growing by just 0.2%.

OTHER

Economists watch BoE’s language

Economists at Bank of America Merrill Lynch have developed a new model that analyses the language used by Bank of England policymakers. Based on recent publications from the bank, the Bank of England Mood Indicator (BoEMI) suggests interest rates will stay flat or even fall this year.

Boden scraps banking book

Publication of Good Bank, Bad Bank by Anne Starling, the CEO of Starling Bank, has been halted weeks before the book was due to be launched. A spokesman for Starling Bank said: “It was Anne’s decision. We decided not to publish because there is a lot going on.”

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