RBS posts dip in profits
RBS has reported a drop in profits for the first three months of the year and warned of the continuing impact of Brexit uncertainty on near-term growth. The bank, which is 62% government-owned, reported £707m profit, down from £808m for the same period last year. Pre-tax operating profits also came in lower at £1bn versus £1.2bn as RBS was hit by stiffer competition in the mortgage market and continuing uncertainty among businesses. RBS added that Brexit uncertainty could delay business borrowing decisions and “is likely to make income growth more challenging in the near term”. Meanwhile, Mr McEwan has come under fire after insisting that fraud victims should not be entitled to automatic compensation. He said that customers must take more responsibility for their actions if tricked into giving their savings to a conman. Elsewhere, the Sunday Times looks at the potential candidates to replace Mr McEwan as CEO with Alison Rose, head of RBS’s corporate and private bank, the leading internal candidate. Separately, the Daily Telegraph notes that Mr McEwan risks losing almost £2m in unvested bonuses if he joins a rival in Australia or New Zealand. Analysts expect National Australia Bank to tap up Mr McEwan after its boss stood down earlier this year, as it fights to restore its reputation following criticism in a royal commission report.
Barclays set for showdown over Bramson and pay
Barclays is preparing for a shareholder row this week over boardroom pay, after the Investment Association issued an “amber top” alert to warn about the scale of pension payments to CEO Jes Staley. Mr Staley is also expected to face a showdown with activist investor Edward Bramson, who is pressing for election to the bank’s board. The Sunday Times’ Jill Treanor says Barclays’ big problem revolves around its investment bank, which Bramson wants to overhaul. She notes that Barclays’ investment bank has gained market share against its US rivals in the past six quarters and the bond business has reported higher revenues. Rob Davies in the Observer argues that the investment banking division has become an “embarrassing relative” for Barclays, with critics claiming that it has wasted valuable resources, sucked up cash and offered little financial return. Meanwhile, the FT profiles Mr Bramson, suggesting that his bid to join Barclays board is his biggest UK project to date.
Lloyds repaying customers following admin errors
Lloyds Banking Group is repaying customers millions of pounds after finding administrative errors dating back to 2012. Nearly 200,000 current and former customers are receiving a share of repayments, thought to total about £6m. That means an average payment of £30. The banking group is writing to those affected - most of whom were not told about interest rate changes to their savings or current accounts. The Financial Conduct Authority has been informed by the bank of the situation and the remedy. Meanwhile, City analysts are forecasting that Lloyds will post pre-tax profits next week of £2.05bn in the first quarter, up slightly from the £2bn recorded in the same period last year. Elsewhere, Jamie Nimmo in the Mail on Sunday questions whether Lloyds boss Antonio Horto-Osorio could step down. He cites analysts who argue that if Lloyds posts another solid performance, Mr Horta-Osorio could feel that his job is complete.
TSB registers small profit
TSB has posted a small first-quarter profit and claims to have resolved all complaints linked to last year’s costly IT meltdown. In the three months to March, TSB reported a €7.3m (£6.3m) profit, up from a €43.8m (£37.8m) loss during the same period last year. The figures come after the bank swung to a heavy loss last year after a disastrous migration of its IT system cost it £330m. Meanwhile, the Sunday Times reveals that from the end of July, 94 TSB branches will open for fewer than five days a week. In addition, seven of TSB’s branches will close completely.
Santander to deploy voice recognition
Santander customers will no longer need to remember and key in security numbers when accessing telephone banking, as the bank introduces new voice and phone recognition technology. Telephone banking customers will be offered the option of verifying their identity through technology which will recognise their voice and where they are calling from.
Monmouthshire to launch digital account
Monmouthshire Building Society is set to launch its own digital current account to challenge the likes of Monzo and Revolut. Dawn Gunter, the building society’s CEO, said the accounts, to be launched in September, would help attract a “new generation of customers”, amid concern that older lenders are playing catch-up with digital newcomers.
Standard Chartered investors urged to protest over pensions
Institutional Shareholder Services has recommended that investors vote against Standard Chartered’s pay policy at next month’s AGM, suggesting the bank’s calculations are “disingenuous”. Meanwhile, the Mail on Sunday claims that Standard Chartered could face a new £1.5bn fine for breaking US sanctions against Iran after a civil case was filed by whistle-blowers.
Banks facing new Libor claims
According to court documents seen by the Telegraph, a pension fund in Hawaii has accused large banks including Barclays, Lloyds and HSBC of manipulating Libor since its overhaul almost five years ago. The complaint argues that 18 banks including RBS, Deutsche Bank, UBS, JP Morgan, Bank of America and Citigroup "corrupted" the rate-setting process by submitting lower rates to New York Stock Exchange owner ICE.
Metro Bank freezes bonuses
The Sunday Times reports that Metro Bank has frozen almost £1m of bonuses for CEO Craig Donaldson, finance director David Arden and his predecessor Mike Brierley. The decision to freeze the bonuses was taken after Metro admitted in January that it had not properly measured the risk attached to some lending.
OakNorth plans UK expansion
OakNorth has unveiled plans to further expand its operations outside London, in an attempt to attract regional business owners. The lender has increased its hiring in Manchester, the Midlands and the South-west to keep up with demand for its business loans. The firm also revealed that Christopher Swarbrick, formerly of Europa Capital Debt Investment, will head up its Manchester team of 50.
Mastercard set to launch biometric card
Mastercard has signed a deal with RBS to offer its biometric credit card for the first time in the UK. The new credit cards will feature a small touch pad, which customers will press when they are making transactions to verify their identity instead of a PIN number or a signature.
McDonnell targets banks
The Mail on Sunday claims that the shadow chancellor John McDonnell is directly involved in a civil disobedience campaign against Britain’s highest street banks. The paper contends that he has helped to whip up a wave of climate protests against Barclays, including demonstrations and sit-ins at dozens of branches.
Germany’s big banks are left grasping for answers
In the wake of the collapse of merger talks between Deutsche Bank and Commerzbank, the FT discusses what will happen next to the embattled German banks. The chairman of Deutsche Bank, Paul Achleitner, has said the bank does not need a fundamental strategic overhaul following the collapse of the planned merger. Separately, Deutsche Bank has lowered its revenue outlook for the year. The bank said its net profit rose 67% in the first quarter, though revenue dropped 9% as proceeds from trading declined sharply.
EBA faces calls to reform after dropping Danske Bank probe
Valdis Dombrovskis, vice-president of the European Commission responsible for financial services, has criticised the European Banking Authority for closing its investigation into money-laundering at Danske Bank.
Ford probed in US over emissions testing
The US Department of Justice has launched a criminal investigation into the way Ford tests the emissions of its vehicles. Ford alerted the US Environmental Protection Agency to potential problems in February but said the issue does not involve defeat devices such as those used by Volkswagen.
Uber aims for $90bn stock market debut
Uber has revealed that it is seeking a valuation of $90bn (£70bn) in its much anticipated stock market flotation. The taxi-app firm has said that its shares will be priced at between $44 and $50 each, with the share issue set to raise about $10bn.
JLR mulls bid for Addison Lee
Jaguar Land Rover is considering launching a bid for minicab operator Addison Lee. Carlyle Group, the firm’s owners, have hired Bank of America and Rothschild to try to sell the business with a target price of between £300m and £500m.
Airlines face £900m hit from rising oil price
Analysis by the Telegraph reveals that Europe’s biggest airlines are on course to suffer a near-€1bn (£900m) profit squeeze in the first three months of the year due to soaring fuel prices. The owner of British Airways, IAG, is expected to be hardest hit. Its fuel bill is forecast to have soared by around €250m between January to March, compared with the same period last year
Start-ups facing delay for funding
The Enterprise Investment Scheme Association (EISA), which helps funnel early-stage capital to small UK companies by linking them directly with investors, has warned that start-ups are being forced to wait three times longer than promised to access for funding from a government programme. EISA said it has recorded a growing delay in the time taken for the Government to approve firms that qualify. Small firms are now waiting an average of 56 working days for their funding to be processed, rather than the 15 pledged by the Government back in 2017.
UK’s financial watchdog launches most dawn raids for a decade
New data from the Financial Conduct Authority reveals the regulator undertook 25 dawn raids in 2018, the highest number of operations since 2010.
LEISURE AND HOSPITALITY
Chicago Rib Shack set for administration
Rib Shack Holdings, which runs the Chicago Rib Shack brand and employs 35 people across five restaurants in London and Leeds, has filed notice of intention to appoint administrators.
Indian hotel start-up plans UK expansion
India’s biggest hotel operator, OYO Rooms, plans to open 500 sites in Britain.
Factories stockpiling goods at record rate
A quarterly survey from the CBI has found that British factories are stockpiling goods at the fastest pace since records began in the 1950s as they prepare for Brexit. The survey showed that output growth sped up slightly in the three months but remained “modest” overall.
MEDIA AND ENTERTAINMENT
Pearson revenues edge higher amid digital restructuring
Pearson has announced a 2% increase in underlying revenue for the first quarter, with revenues up 4% in the UK. Pearson’s guidance for 2019 was unchanged.
Mortgages at nine-month high
Mortgage loans hit a nine-month high in March, industry data from the UK Finance showed. High Street banks approved 39,980 mortgages in the month, up 6% on a year ago and 2% ahead of the previous month. The figures also show that remortgage approvals were 11.1% higher and approvals for other secured borrowing were 1.7% up year-on-year. Gross mortgage lending in March was £20bn, 0.5% lower than the same month in 2018.
Kurt Geiger owner seeks sale
Cinven, the owner of Kurt Geiger, is exploring a sale of the shoe retailer to a major American fashion house including Steve Madden, Michael Kors and Coach.
Arcadia agrees HSBC loan deal
Arcadia has agreed a loan deal with HSBC that gives the bank security over millions of pounds of deposits as the retailer draws up plans for a financial restructuring.
Brexit delays are damaging productivity
Analysts at Goldman Sachs have suggested that delays to Brexit will put more pressure on the British economy because a lack of business investment will act as a drag on productivity. The analysts added that Britain was still likely to leave with a deal and predicted that there would be “minimal macroeconomic disruption” once Brexit does happen.
Next bank bosses should be female, suggest MPs
MPs have suggested that the next bosses of RBS and the Bank of England should be female. Alison Rose, head of RBS’s corporate and private bank, is hotly tipped to replace Ross McEwan at RBS, while several women have been named as potential successors to Mark Carney at the Bank of England, including Santander UK chairwoman Shriti Vadera and former BoE deputy governor Minouche Shafik.
Osofsky: Britain worse off for lack of diversity
Serious Fraud Office (SFO) chief Lisa Osofsky has hit out at the lack of diversity at the top of Britain’s society saying the failure to recruit more women and minority candidates to prominent posts leaves the country not as good as it could be. The issue spans business and politics, claims Osofsky, who adds that with just “one, homogenous group espousing points of view, we’re missing the options that might be out there.”