Hedge fund chief hits out at 'greenwashing' bank bosses
Sir Christopher Hohn, the head of TCI Fund Management, has said any bank chiefs who make a net zero promise whilst actively lobbying against necessary climate regulation are guilty of greenwashing. The hedge fund chief added: “Shareholders should vote against the directors of banks who are hiding their exposure to climate risk.” His comments come days after Helen Whately, the Exchequer Secretary to the Treasury, met lenders to encourage them to invest in North Sea oil and gas, despite the Government’s net zero commitment to reduce the UK’s reliance on fossil fuels by 2050. The Telegraph notes that Sir Christopher is known for donating large sums to charity and is a major financial backer of Extinction Rebellion.
Lenders pass on higher rates to customers
Homeowners have been hit with higher borrowing costs as lenders pass on the Bank of England’s interest rate rise. Halifax, Santander, Lloyds, Nationwide and Skipton Building Society all added 0.25 percentage points to their standard variable rate deals last week, just days after Threadneedle Street increased official interest rates from 0.5% to 0.75%. The lowest mortgage rates have doubled in the past six months and borrowers are now paying £840 a year more for the average loan than they did in October last year, analysis shows.
Mike Mullen: ‘People shouldn’t be loyal to banks’
Atom Bank CEO Mike Mullen talks with the Sunday Times about the lender’s strategy, the four day week his staff now enjoy and how high street banks don’t deserve loyalty from their customers. He says: “Your job should be to pay as little to your bank as you possibly can and earn as much from your bank as you possibly can. It doesn’t pay to be loyal.” Mullen goes on to say a float is possible in 2023 and that there are plans for the digital bank to launch savings products. His ultimate goal, Mullen explains, is to give the customer the best possible value he can and consequently create value for his investors.
OakNorth Bank boss offers mentoring for young entrepreneurs
Rishi Khosla, the co-founder and chief executive of OakNorth Bank, is backing a London School of Economics initiative to foster entrepreneurship in young people. Khosla is providing the mentoring to support the programme which has seen 1,800 school children and undergraduates participate so far. Some 500 of them having received mentoring. Khosla hopes to break the conformist mindset so common in the UK and encourage young business people to take a different path from the one typically set up by schools.
Co-op boss hands over to first woman chief executive
Co-operative boss Steve Murrells is stepping down after ten years and handing over to the first female group chief executive. Shirine Khoury-Haq, who has been group chief financial officer since 2019, will take over in May following a transition period. The appointment comes ahead of a search for a new chairman to replace Allan Leighton who is due to leave next year.
Goldman and Kirkland & Ellis halt new business with oligarch-linked firm
Two of the largest advisers to Pamplona Capital Management, Goldman Sachs and Kirkland & Ellis, have paused new business with the private equity firm backed by sanctioned oligarch Mikhail Fridman’s LetterOne investment group. Pamplona has said it will hand back LetterOne’s money and wind down three funds, which could be done by selling LetterOne’s stakes or the companies that Pamplona had bought.
Sycamore makes bid for Ted Baker
Sycamore Partners, the US private equity firm, has reportedly made a formal £250m offer for the fashion chain Ted Baker. City AM notes that Sycamore is an expert in retail investments, having owned brands such as fashion label Kurt Geiger.
Macquarie buys more of UK’s gas transmission infrastructure
News that the National Grid has sold a majority stake in its gas transmission business to Australian bank Macquarie and BCI, one of Canada’s biggest institutional investors, may raise concerns with ministers considering Macquarie’s reputation for running UK infrastructure companies. It ran Thames Water between 2006 and 2016 having loaded it with debt while paying huge dividends. The water company was also fined £20m for pumping sewage into the Thames and other rivers. Macquarie and BCI have the option to buy the rest of the business next year, but the business secretary Kwasi Kwarteng is likely to come under pressure to intervene and stop the sale.
Deutsche Bank promotes finance chief as one of two deputy CEOs
Deutsche Bank has promoted finance chief James von Moltke to the role of deputy chief executive officer. Von Moltke, who will remain CFO, will serve alongside Karl von Rohr, who has had the job since 2018. "This gives us the right governance structure to succeed in the long term in this time of increasing complexity and volatility," Chief Executive Officer Christian Sewing said. Meanwhile, Yngve Slyngstad, the former head of Norway’s sovereign wealth fund, has been nominated to join the supervisory board of Deutsche Bank in a move seen as vote of confidence in the lender’s overhaul following years of turmoil.
Jaguar Land Rover talks with Envision pave way for UK gigafactory
A new UK gigafactory could be on the horizon with Jaguar Land Rover in advanced talks with battery supplier Envision AESC to supply its Range Rover and Land Rover electric models. Envision AESC already supplies Nissan and is planning a new battery plant for the Japanese car maker in Sunderland. Insiders say a deal with JLR would require a second battery factory.
Rolls-Royce shares take off on Air India news
Shares in Rolls-Royce were up nearly 20% last week after Air India said it was looking to snap up around 30 Airbus aircraft, which are powered by engines built by the UK engineering group.
Scottish Widows divests from tobacco
Scottish Widows has announced it will sell £1.5bn of investments held by active and passive funds in cigarette companies, divesting pension funds and investments of more than a million people from the tobacco industry. Rae Maile, a tobacco analyst at Panmure Gordon, said announcements like that of Scottish Widows “tend to be marketing opportunities... more than an investment view”.
Schroders chief slams Ark ETFs for ‘massive wealth destruction’
Peter Harrison, the CEO of Schroders, told a conference earlier this week that the Financial Conduct Authority was in danger of throttling the innovation needed for the asset management industry to better serve retail customers.
Crypto fraud soars as people seek quick returns
A report from Pinsent Masons reveals the number of people falling victim to cryptocurrency scams increased by 64% last year to 9,458. Hinesh Shah, a forensic accountant at the firm, said: “Regulators like the FCA are doing all they can to educate consumers of the risk of fraud, but they face a major challenge.”
LEISURE & HOSPITALITY
Gorillas eyes further investment
Grocery app Gorillas has hired advisers from JP Morgan to find new investors to raise $500m of new funding that could value the company at more than $5bn. It comes just months after receiving a $1bn cash injection in October, as the Covid-fuelled boom in rapid delivery continues to eat up investor cash.
Investors bet Ukraine war will prompt companies to bring production onshore
The FT reports on how investors including Blackrock’s Larry Fink and Oaktree Capital Management co-founder Howard Marks are recognising that the Ukraine crisis and the pandemic-induced supply chain disruption are signalling an end to globalisation, and a new era of re-shoring is nigh. Marks says how far the pendulum swings toward onshoring depends on whether “the need for dependability and security” defeats “the desire for cheap sourcing.”
MEDIA & ENTERTAINMENT
New Digital Markets legislation will combat Big Tech dominance
The European Union reached an agreement late on Thursday on the wording for the bloc’s Digital Markets Act. The legislation seeks to prevent the biggest tech firms, such as Google, Microsoft, Meta, Amazon, and Apple from dominating digital markets. These so-called “gatekeepers” of the internet will be required to “open up and interoperate” with smaller players and face tighter restrictions on using people’s data for targeted online ads. Messaging services and social media platforms must also work with each other, opening up the possibility that users will be able to share messages across platforms. Breaches of the law could be punishable by fines equal to 20% of global revenues for repeat offences.
UK retail sales drop as shoppers hit by inflationary fears
British retail sales fell in February despite the amount spent by consumers rising. The figures highlight the effect of inflation squeezing household finances and raise concerns that surging inflation was stunting the UK’s economic recovery well before Russia invaded Ukraine. “Consumers face a rocky road ahead, with rises in the energy price cap and NI [national insurance] contributions both coming next week,” said Helen Dickinson, chief executive of the British Retail Consortium.
Business investment could rise 20% with right relief
The Confederation of British Industry has predicted that business investment will soar if the Chancellor opts to slash business taxes permanently following the end of the "super deduction" next year. The "super deduction" takes 130% of investment off taxable income. CBI director-general Tony Danker says allowing companies to write off 100% of their investments against tax straightaway…could see a 20% rise in business investment so that is I think the best prize."
Lib Dems rue Sunak’s bank tax giveaway
The Chancellor cut the surcharge on banking profits from 8% to 3% in last year's autumn budget. The move was expected to cost the Treasury £4.7bn - but bumper investment banking revenues mean the UK will forego £2.6bn more than that, the Office for Budget Responsibility says. The Treasury Spokesperson for the Liberal Democrats, Christine Jardine, commented: “Just as half a million children are set to be pushed into poverty, Rishi Sunak is handing the big banks a tax cut worth billions of pounds.” A Treasury spokesperson responded: “The overall corporate tax rate for banks is going up to 28% from 2023, up from 27% currently. Our measures ensure that the combined tax rate on UK banking profits remains internationally competitive, helping to attract investment and create jobs in the UK, while ensuring that banks pay a higher rate of tax than most other companies, which helps to fund public services such as the NHS.”