Covid loan lifeline delays reckoning
The Sunday Times’ Emma Dunkley considers how Rishi Sunak’s extension to emergency finance for businesses has provided a lifeline for businesses and relief for under-pressure banks concerned about the prospect of bad debts. David Cumming, chief investment officer for equities at Aviva Investors, says future lockdowns will risk wiping out the benefit of the extension but banks also expect loan impairments will not be as bad as expected. The Chancellor has said new support schemes will be available from the start of next year and Stephen Pegge of UK Finance says the breathing space that provides means there is more time to discuss what comes next. “What will be important for the new phase is that it supports a broader range of businesses with more flexible finance,” says Pegge. “Some sectors will be hit more than others and there will be local lockdowns, so you’ll want that flexibility.”
Retired Brits abroad could face Brexit charges on pensions
British expats in Europe could face punitive charges to access their pension pots if their UK bank accounts are closed after Brexit. With increasing numbers of banks telling expats their accounts would be closed by the end of the year, expats who are paid their pensions through UK bank accounts could have to pay fees to money transfer companies and get poor exchange rates. A spokesman for UK Finance said: “The impact on each customer will vary depending on the operating model of their bank or provider, the product or service being provided, and the legal and regulatory framework in the country in which they are resident.”
Officials race to build a £15bn bailout fund by Christmas
The Treasury is in talks with a "significant range of institutions" such as pension funds and insurers over a private sector led fund to bailout struggling businesses. Stephen Welton, chief executive of the Business Growth Fund, is in talks with investors to create a £15bn pot, potentially backed up with taxpayer cash, to take equity stakes in companies laden with debts following the lockdown. The fund would take equity stakes of up to £10m in mid-sized businesses where there is an "obvious and significant" funding gap.
Banks told to find innovative solutions to ensure access to cash
The Times reports on the future of access to cash after banks were warned by regulators this month to find innovative solutions to ensure the public has access to their money or face legislation forcing them to rebuild a wide network of branches and ATMs. The paper notes that plans were revealed last week for a pilot scheme that will allow banks to share branch facilities at Post Office hubs. Other options being considered are community banks, automated bank kiosks in convenience stores and supermarkets and video banking for more complicated services.
Thought Machine brings in new boss ahead of expansion
Thought Machine has appointed former HSBC executive Andy Maguire as chairman as it prepares for expansion in the Middle East and Asia. The British cloud banking business provides banks with a platform to introduce new digital products to compete with fintechs.
Risk management firm attracts ratings agency cash
operational risk analysis firm Acin has raised $12m from Fitch and banking tech leaders. Acin’s system allows banks to share insights and assess many scenarios more quickly and easily than before.
Crosbie: Customers not to blame for rise in fraud
Writing in the Telegraph, TSB CEO Debbie Crosbie says banks should be blaming criminals not customers for the fraud they perpetrate, adding that TSB’s approach is: “Provided the customer wasn't reckless, all innocent victims of scams should get their money back.”
Marcus cuts rate again
The consumer banking arm of Goldman Sachs has announced plans to cut interest rates for the fifth time in just over two years. Marcus customers will see the interest rate fall from 1.05% to 0.7% on Oct 12.
Private equity-owned companies win access to UK emergency funds
A concession on the part of the Treasury means companies owned by private equity firms can now access state-backed loans to help them ride out the coronavirus pandemic. The British Business Bank, which administers the loan schemes, said the criteria used by banks to assess firms' eligibility had been relaxed.
KKR buys into Great Portland
American buyout firm KKR has bought a 5.35% stake in Great Portland Estates for £74.3m, signalling its expectation of a recovery in demand for central London office space.
London bankers balk at EU relocation over virus travel worries
EU regulators are frustrated because banks are delaying plans to relocate UK-based staff due to fears the pandemic will leave them trapped abroad.
Deutsche Bank’s Manfred Knof named as new Commerzbank CEO
Manfred Knof, Deutsche Bank's head of German retail banking, is to become the new chief executive of domestic rival Commerzbank.
easyJet left 'hanging by thread', union official says
Without a resurgence of passenger numbers in the summer and profits next year easyJet may well not be around this time next year, an official from the pilots’ union has said. Martin Entwisle told pilots that the company’s CFO, Andrew Findlay, had warned that the company’s situation was “even worse than their worst fears”. But easyJet have said Entwisle’s characterisation of the discussion with Findlay was inaccurate.
Kuwait joins Rolls-Royce funding talks
The Kuwait Investment Office has joined Singapore’s sovereign wealth fund GIC in talks with Rolls-Royce about shoring up the company which needs to raise up to £2.5bn as it battles the coronavirus crisis. Rolls-Royce is also selling its Spanish ITP division, bundling it with other businesses to try and raise more cash.
Small businesses in pain as insurers mull appeal
The Sunday Telegraph considers some of the long and short-term implications of insurers appealing the case brought against them by the Financial Conduct Authority concerning Covid-related business interruption claims. The High Court ruled they should pay out on business interruption contracts and if insurers decide not to appeal some cash could start flowing to small businesses forced to shut during the pandemic. Experts predict insurers, partly influenced by reinsurers, will inevitably contest some of the judgement’s findings because the outcome is going to determine how contracts are written and interpreted for some years to come. If the High Court does grant permission to appeal, the fear is that by then thousands of firms could be forced to close before the case is resolved.
Flawed policies will speed London market’s decline
Rival insurance markets will profit from London’s insistence on using standardised insurance policies which are often ambiguous and leave policy holders unsure of their cover, according to a new report from insurance adviser Mactavish. Lloyd’s of London has been pushing the standardisation of contract wordings so that insurers can more accurately measure their exposure to possible payouts. But Mactavish CEO Bruce Hepburn says the vague contract wordings seen in Covid-related business interruption policies is being replicated across other types of business cover, including in the growing cyber insurance market.
Insurers ordered to end ‘shameful’ cuts
Insurers have been ordered not to use emergency COVID-19 support provided by the Government to offset insurance payouts to businesses. John Glen, economic secretary to the Treasury, said the Government would take action to “protect financial support being issued to businesses” if insurers continued to deduct grants intended to help companies survive the crisis from insurance claims.
Royal London and LV consider merger
LV= is in merger talks with Royal London as the mutual seeks a partner following a strategic review launched at the end of last year. Bain Capital, the private equity owner of Esure, is also said to be interested in buying LV=.
SmartSearch launches in US
SmartSearch has opened its first office in the USA. The Ilkley-based anti-money laundering firm is recruiting a team for its branch in Utah.
Private hospitals benefit from fears over the NHS
Enquiries about treatment at private healthcare companies has soared in recent weeks as people miss routine NHS checks of patients fear that the NHS has been overwhelmed by COVID-19 cases. HCA Healthcare, Ramsay Health Care and Spire Healthcare have all seen a marked increase in those seeking more routine work who do not have private insurance but pay up front for treatment.
NMC placed into administration in UAE
NMC, the largest private healthcare provider in the United Arab Emirates, has been placed into administration in the country, paving the way for a restructuring process.
LEISURE & HOSPITALITY
Revolution mulls restructuring options
Revolution Bars has hired advisers to explore options including a CVA following the "continuing challenging trading environment and exacerbated by the further COVID-19 related restrictions". The company said in a statement: "No decisions have yet been made and there is much further work to complete before the board decides on any appropriate course of action.” Revolution has more than 2,800 staff and 74 bars.
Bids lift William Hill
Shares in William Hill leapt over 40% on Friday after it said it had received "separate cash proposals" from Apollo Management International and from the hotel and entertainment group Caesars Entertainment.
MEDIA & ENTERTAINMENT
Vodafone wins long-running €3bn India tax battle
An international arbitration court has ruled in Vodafone’s favour ending its long-running tax dispute with the Indian tax authorities which had been seeking €3bn in back taxes and penalties related to its 2007 acquisition of a local operator.
Andrew Neil to launch GB News next year
Veteran broadcaster Andrew Neil is leaving the BBC to lead GB News, a Discovery-backed channel due to launch early in 2021. Mr Neil will be Chairman and present for the channel.
Regus threatens landlords with insolvency if they don’t cut rents
The serviced offices giant IWG, formerly known as Regus, is threatening to dump hundreds of lease commitments unless landlords agree to swingeing rent cuts. Boss Mark Dixon is set to put Jersey-based subsidiary Regus plc into insolvency dissolving £790m of lease guarantees across 500 centres.
Sports sector at risk of losing 300,000 jobs
The Chartered Institute for the Management of Sport and Physical Activity has warned that about 150,000 roles across fitness, leisure and recreational sports are at risk once furlough ends, but that will rise to between 250,000 and 300,000 by next year if there is not a dedicated package of support.
MPC’s Silvana Tenreyro defends negative interest rates
Silvana Tenreyro, an external member of the Bank of England’s Monetary Policy Committee, has rejected criticisms about negative interest rates insisting the evidence from other countries was “encouraging” and that banks would cope with further pressure on their finances. Ms Tenreyro’s comments come after the Bank last week stirred observers with news it had launched formal talks with the Prudential Regulation Authority about the operational practicalities of the policy.
UK national debt soars £36bn in August
Figures from the ONS show that the UK’s national debt surged by £35.9bn in August, £30.5bn more than the same month last year, as the price tag for support measures to help the economy through the pandemic rose. The extra borrowing took Britain’s total debt to a record of £2.024trn.
Millennial investors would go against morals
One in four millennial investors would go against their personal beliefs if the returns were high enough, according to research by Schroders. The study of more than 23,000 people around the world revealed that 25% of investors aged 18-37 would be willing to compromise for a return of 21%.