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Daily News Roundup: Monday 29th January 2018

Posted: 29th January 2018


Bank of England reassures financial sector

Bank of England Governor Mark Carney has reassured the Government that it will not have to worry about Brexit's impact on the City of London, commenting on BBC Radio 4's Today programme: "The Government doesn’t have to worry about the impact on the financial sector because it will be able to withstand and support the economy. From the Bank of England’s perspective what is necessary and what we’ve been doing is to make sure we are in a position in the UK, with its huge financial sector, that we can withstand any outcome and we can take advantage of any outcome." Meanwhile, Catherine McGuinness, head of policy at the City of London Corporation, has said that the Government's failure to publish its blueprint for financial services post-Brexit is putting jobs at risk in the sector. Separately, UBS has said it wants London to remain Europe’s financial hub and will try to keep as many staff in the City as possible after Brexit. Investment banking head Andrea Orcel said the Swiss bank wanted to keep “as much as we can in the UK”.


Note Machine ATM plan

NoteMachine, an independent ATM operator, has claimed that a feared reduction in the number of UK cash machines could be avoided through a 5% reduction in fees, followed by a 3% reduction every year for three years. Chief executive Peter McNamara commented: "ATMs have been around for 50 years and still do what they did 50 years ago - which is dispense cash. This isn't very efficient, considering what they can do."

Current account deals compete for customers

Consumer website Moneyfacts has said that banks are offering ever-better incentives on current accounts with more people than ever prepared to leave their banks in search of a better deal. Brian Brown of analyst Defaqto commented: "The trend seems to be that the smartphone apps for the new banking world are aimed at young, single, tech-savvy individuals who are more comfortable with having accounts only in their names, with no branch facilities".

Banks rush to sign up to gender equality charter

More City firms are signing up to a government-backed gender equality charter in the wake of the Presidents Club dinner scandal. Virgin Money CEO Jayne-Anne Gadhia said it was “about time” that all banks signed up to the Government’s Women in Finance Charter. Notable firms missing from the roll call which have now said they will sign up include Goldman Sachs and Metro Bank.


HSBC cautious over Qatar

HSBC has rejected a high-profile role on Qatar’s first international bond since a diplomatic crisis isolated the country last summer. A spokesman for the bank said: "We never comment on market rumour and speculation". Many foreign banks have been cautious in their dealings with Qatar since neighbouring nations accused the state of supporting terrorism and broke off ties in 2017. HSBC has also not pitched for a "bookrunner" role on another $3bn loan refinancing by the Qatar National Bank.

Wall Street fall warning

Bank of America Merrill Lynch has told institutional clients that Wall Street is "very likely" to fall, potentially by thousands of points in the next few weeks. The bank’s Ronan Carr commented: "It's been a huge week. Extremes of inflows tend to be red flags," also noting that it was not predicting the start of a bear market, but rather a correction after a notable increase in share values.


SoftBank researches digital payments system

SoftBank is reportedly developing a strategy to create a worldwide digital payments system that could challenge the dominance of PayPal, Apple Pay and China's Alipay. The company is also seeking advisers for the $18bn (£12.7bn) listing of its mobile phone business in London and Tokyo. Bankers at Citi and Mizuho are understood to have been selected to lead on the flotation.

$90m price-fixing fine for US division of BNP Paribas

BNP Paribas’ US division has pleaded guilty to a price-fixing conspiracy, agreeing to pay $90m after manipulating prices on an electronic FX platform.

Chinese online bank-share sales increase

Bank shares, both listed and unlisted, have increased on online auction sites in China, with concerns growing over the pricing and regulation of such transactions.

Threat to US mortgage industry jobs

With US mortgage lenders preparing for the weakest year for refinancings since the turn of the century, thousands of jobs in the sector are at risk.


VW faces UK group legal action over emissions scandal

Almost 60,000 people have signed up to sue Volkswagen Group over its emissions scandal, in what is set to be one of the biggest group actions to come before London’s High Court.


Housebuilders take steps to plug skills gap

A survey from Lloyds Banking Group has found that over 50% of housebuilders are launching apprenticeship schemes as a chronic shortage of skilled workers in the sector worsens. Brian Berry, chief executive of the Federation of Master Builders, has called for a transitional period before leaving the EU, alongside "a cultural shift" to encourage vocational training, which would give the industry more appeal to women and ethnic minorities.


Financial services confidence falls once again

A study of 92 firms by the CBI has shown that optimism in the financial services sector fell in the final quarter of last year, with a majority of companies seeing Brexit as the most serious threat to the UK remaining a financial centre. Chief economist Rain Newton-Smith commented: "With overall business levels seen as broadly typical, and demand and profitability continuing to expand, the financial services sector ended last year on a stable footing. Scratch the surface, however, and a different story is revealed.”

Financiers warn of inflation surge

Financiers have claimed that the international financial system is heading towards an "inflexion point" with inflation risking an increase in interest rates and damage to asset prices. Chairman of UBS Axel Weber commented at the World Economic Forum in Davos: "We're moving into difficult territory. Inflation could be the big surprise of this year… At some point the inflexion point will come." Bridgewater founder Ray Dalio noted that as authorities run out of monetary and fiscal ammunition to cope with crises, fragile societies may not cope with another economic downturn.

London fintech secures £20m

London-based fintech start-up Duco has secured $28m (£19.8m) funding from Fidelity International's investment arm Eight Roads and Insight Venture Partners. The firm’s software allows financial institutions to manipulate enormous amounts of data through remote internet servers. It is understood the funding round values the company at about $100m. Duco will use the cash to hire more staff and invest in expansion in the US and Asia. Its current clients include Société Générale, ING and the broker Redburn.

Call for a social purpose gains support

A letter from BlackRock chief executive Larry Fink calling on companies to serve a social purpose is gaining support from senior business figures, economists, and investors. His call has received the backing of several big names at Davos including Indra Nooyi, boss of PepsiCo, and Carlos Ghosn, chairman of Renault-Nissan-Mitsubishi.

New website presents problems for traders

Customers of Interactive Investor have been prevented from trading online following the migration of customers to the TD Direct Investing platform, which Interactive acquired last year.

McDonnell takes aim at Big Four

Labour’s John McDonnell has called for a new "Hippocratic oath" at Britain's large accountancy firms, warning that they must work to maximise the amount of tax their clients pay. Speaking at the World Economic Forum in Davos, the shadow chancellor said the Big Four were not doing

Mifid II fails to make investing fees clearer

Following the introduction of Mifid II legislation, experts have said investors will struggle to find new lists of fees, which are difficult to locate or have not yet been published.


Online travel agent eDreams Odigeo attracts bidders

CVC Capital Partners and BC Partners are both reported to be considering offers for online travel agent eDreams Odigeo. The site hired Morgan Stanley in 2017 to perform a "strategic review". Another potential bidder is Skyscanner, backed by Ctrip, a Chinese travel agent.

M&C shares fall after bid

Shares in hotel group Millennium & Copthorne fell after shareholders rejected its owner Kwek Leng Beng’s attempt to take outright control. The chairman of M&C already owns 65.2% of the chain through investment vehicle City Developments Limited.

GVC faces €200m Greek tax ruling

Internet gambling firm GVC has claimed that a near-€200m (£175m) ruling against it by Greek authorities is hugely inflated. Shares in the company fell 4% after news of the ruling emerged but ended later in the day just 2.8%, 26.5p lower at 921.5p.


Lloyds CEO claims Brexit boost for manufacturing

Lloyds CEO Antonio Horta Osório has said the depreciation of the pound since the Brexit vote has helped to "boost" the manufacturing sector, and predicted that the rise in exports will result in an improvement in GDP growth forecasts. Mr Horta Osório made his comments on BBC Radio 4’s Today programme, from the World Economic Forum in Davos.


BHS creditors get £36m ‎payout

The liquidators of BHS have agreed a £36m payout to creditors, nearly two years after the chain collapsed. A document sent to creditors last week discloses that a 3.6pm interim dividend - worth a total of roughly £36m - has been paid out.


GDP growth defies forecasters’ predictions

Preliminary figures from the ONS suggest that UK GDP rose 0.5% in the fourth quarter of 2017 and 1.8% in the full year compared with the previous year. Hargreaves Lansdown senior economist Ben Brettell stated: "The economy has performed much better than many feared in the aftermath of the Brexit vote, boosted by the rising tide of a global recovery, which has lifted all boats."

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