IT fiasco pushes TSB into a loss
The disastrous tech upgrade at TSB earlier this year has cost the bank £176.4m, pushing it into a half-year loss. In April, almost 2m of the bank's customers lost access to online banking services after the bank bungled the introduction of a new IT system. Costs so far incurred by TSB include £116m in compensation for customers affected, £31m for bringing in experts to try to fix the problems, and £30m in waived fees and charges. It reported a loss of £107.4m in the six months to June 30th compared with a profit of £108.3m last year. CEO Paul Pester said: “Our priority in the second half of the year continues to be putting things right for our customers . . . Looking further ahead we are determined to get back to bringing more competition to UK banking and ultimately making banking better for consumers and small businesses.” Meanwhile, Nicky Morgan, the head of the Treasury select committee, has criticised the bank after it emerged that an independent review into the IT meltdown is not expected to be published until next year. Ms Morgan said: “The impression we were given was that this is an urgent review. If I were the board, I would want to know how this crisis had arisen.”
Financial Times, Page: 15 BBC News The Daily Telegraph, Business, Page: 29 The Times, Page: 47, 49 The Sunday Times, Business, Page: 3 The Guardian, Page: 37 Daily Mail The Scotsman, Page: 30 The I, Page: 70 The Sun, Page: 46 Daily Express, Page: 59
Banks plan no-deal Brexit lending
Banks are preparing to lend businesses billions, in the event that Britain crashes out of the EU without a deal, in order to ease the economy through a potential crisis. The Telegraph reports that banks are ready to extend vital lines of credit, mitigating a potential cash crunch caused by delays to cross-border shipments and payments following Brexit. “Extending credit to firms impacted is one thing we’re looking at. It’s a bit Dunkirk spirit type of stuff. But banks are in reasonably good shape and can cope,” said one executive at a FTSE 100 bank. Bank lobby group UK Finance added that it was prepared to co-ordinate any efforts to provide support.
Buxton backs Barclays ahead of results
Richard Buxton, chief executive of Old Mutual Global Investors, has defended Barclays amid activist investor Edward Bramson’s approach to shake up the bank. Mr Buxton said that Mr Bramson’s proposal to shrink Barclays' investment bank was poorly timed and the wrong approach. Meanwhile, the City is expecting Barclays to produce solid numbers for its investment bank when it unveils half-year results on Thursday. The investment bank is expected to generate revenues of £2.6bn in the second quarter, down 9% on the improved £2.8bn over the first three months of the year. Overall, Barclays' net profits are expected to be £763m for the second quarter, down 13% on the prior year.
The Sunday Times, Business, Page: 3 The Daily Telegraph, Business, Page: 30
RBS dividend mooted
RBS could reportedly pay its long-suffering shareholders a dividend this week, the first since Fred Goodwin was chief executive. Analysts at Morgan Stanley believe the bank could pay two pence per share, which would net shareholders a total of £240m. Such a payout would represent a boost of almost £150m to the public finances as the Treasury still holds a 62% stake. Morgan Stanley explained that the bank now has enough cash to pay a dividend comfortably, noting that its core capital ratio will be 15.6%. RBS’s CEO Ross McEwan is aiming to keep the ratio at 14%, meaning it will have an excess to use for a dividend.
The Mail on Sunday, Page: 46 The I, Page: 42 Daily Mail, Page: 46
Lloyds braced for final PPI push
Lloyds Banking Group could set aside millions more to address payment protection insurance (PPI) mis-selling claims when it reports this week. Analysts are waiting to see whether UK banks report higher costs linked to compensation for PPI after a new ad push by the Financial Conduct Authority. Lloyds has incurred the largest bill so far for PPI, at £18.8bn, and increased its provision by £90m in the first three months of the year. Analysts at UBS believe that it may add £410m for April to June. The bank’s bottom-line profits are expected to be up 23% to £1.6bn over the first quarter.
Daily Express, Page: 44 The Times, Page: 34 The I, Page: 42
BGF could link up with British Business Bank
The British Business Bank is in talks with BGF, formerly the Business Growth Fund, which would allow it to invest in fast-growing firms across all industries in the UK. According to City sources, the two have held talks about combining in a fund called British Patient Capital. It would be a subsidiary of the BBB and would combine public and private money to make investments worth up to £100m in SMEs.
CYBG agrees deal with PayPal
CYBG has unveiled a tie-up with PayPal as the lender looks to improve its digital payment choice. The “strategic partnership” will enable customers to link their debit and credit cards with their PayPal account directly from their B-branded mobile banking app.
The Scotsman, Page: 30 The Press & Journal, Page: 40
StanChart extends deferred prosecution agreement
Standard Chartered has announced that it has extended an agreement with US authorities that spared it from prosecution back in 2012 for breaching sanctions against Iran and other countries.
Financial Times The Times, Page: 54
Doubts remain over banking reforms
Katherine Griffiths writes in the Times that financial experts are divided about whether Britain has put in place effective measures to discourage bankers from a repeat of the financial crisis.
Europe’s development bank set to stick with London
The European Bank for Reconstruction and Development is mulling over a move to Canary Wharf instead of moving staff to mainland Europe.
Moulton critical of takeover rules
Jon Moulton, the boss of Better Capital, has warned that “tedious” and “bureaucratic” new proposals to strengthen the Government’s ability to block foreign takeovers risk discouraging inward investment and catching out companies who pose no threat to national security.
Private equity pursues buy-and-build strategy
A study by Bain & Company has found that private equity groups are building new business empires by merging smaller companies together as they look to avoid increasing competition.
Appian seeks investors
Appian Capital is looking to raise around $1.2bn (£1bn) to provide long-term backing to small-scale mines around the world.
AIB losing staff to rivals
Bernard Byrne, head of Allied Irish Banks, has said senior executives at the bank are being poached by rivals expanding in Dublin because of Brexit. He said that a state-imposed pay cap means staff are being tempted away by higher salaries elsewhere. Mr Byrne was speaking as AIB reported net profits of €650m.
Financial Times, Page: 16 Daily Mail, Page: 100
Deutsche Bank shifts half clearing from London to Frankfurt
Deutsche Bank has moved nearly half of its euro clearing activities from London to Frankfurt ahead of Brexit. Deutsche Bank said that the move to Frankfurt did not involve moving staff. Stefan Hoops, its global co-head of institutional and treasury coverage, said: “It's the same London-based person who clears a transaction. We're just using a different clearing house.”
Financial Times, Page: 1 The Times, Page: 12
ING backs Irish fintech
ING has invested €21m (£18.7m) in cross-border payment firm Transfermate. The investment takes Transfermate's series A fundraising round to a total of €51m. Transfermate intends to use its fundraising to accelerate growth across the US, Canada, Europe and the Asian Pacific region.
US bank M&A under a cloud after share price falls
American investors have expressed doubts about consolidation among the country’s 5,600 regional lenders amid falls in the banks’ share prices.
BBVA quarterly profits lifted by Mexico and digital banking
BBVA has reported net earnings of €1.31bn in the second quarter, up 18.2% from the previous year. Net interest income was €4.36bn, a drop of 2.8%.
Hauliers in compensation claim for overpriced trucks
UK road hauliers who paid over the odds for trucks from firms found to have colluded in a price-fixing cartel could be in line for £5bn in compensation. That is the size of the payout sought by the Road Haulage Association, which is pursuing a claim on their behalf at the Competition Appeal Tribunal.
Car industry braces for trade war ‘tsunami’
The FT examines how the prospect of a global trade war will affect the automotive industry. A number of manufacturers have already downgraded their forecasts for the year ahead.
BMW raises prices as trade war hits consumers
BMW is to raise its prices on US-built vehicles exported to China. The development comes after Beijing imposed higher tariffs in retaliation to President Donald Trump’s duties on imported Chinese goods.
Thomas Cook considers selling airline
Thomas Cook has held talks about selling a stake in its airline, which would be used to pay down debt and fuel expansion.
FCA sets out crackdown on peer-to-peer lending
The Financial Conduct Authority is planning to crack down on peer-to-peer lenders and crowdfunding platforms amid concerns that investors could be taking on more risk than they realise. The regulator called for the publication of more detailed standardised information about investments, charges and risks lenders faced. James Hurley in the Times looks at how the growth of online finance platforms has forced the FCA to scrutinise the sector more.
Former Lloyd’s boss backs second referendum
The Mail on Sunday interviews former Lloyd’s of London chairman John Nelson, who last week urged fellow business people to speak more openly about Brexit and the damage he feels it will do to Britain's economy. He argues there should be a second referendum “because the route we are going down bears very little resemblance to what the population was told during the first referendum.” He also cites the trade implications of Brexit as one of his biggest worries.
The Mail on Sunday
Activist increases pressure on De La Rue bosses
Activist investor Crystal Amber has warned De La Rue that it is planning to increase its stake, citing mounting frustration at the banknote printer’s management.
M&G boss moves to Fidelity
Anne Richards, the boss of M&G Investments, is moving to become chief executive at Fidelity. She replaces interim president Simon Haslam.
Equiniti proves doubters wrong
Financial outsourcer Equiniti, which was spun out of Lloyds Bank, has reported that it sales and profits both rose 30% to £254m and £55m respectively.
The I, Page: 71
LEISURE AND HOSPITALITY
Burger chain continues to struggle
Burger chain Byron has warned that it could face a cash call if customers continue to avoid having meals out. Byron, which underwent a CVA at the start of the year, said in its results that trading conditions continue to be difficult.
GVC confirms join venture talks with MGM Resorts
GVC Holdings, the owner of Ladbrokes and Coral, has confirmed that it is in merger talks with US hotel and casino operator MGM Resorts. According to Sky News, the value of the deal could be in the region of $200m (£153m) and could be announced today.
MEDIA AND ENTERTAINMENT
BT walks away from more sports
BT is understood to have lost the rights to broadcast NBA basketball and UFC ultimate fighting after walking away from a bidding contest. "We won't bid any more than the rights are worth to us," a spokesperson for BT said. The move comes weeks after BT lost the rights to Italian Serie A football.
Shareholders approve Fox Disney move
Shareholders have signed off on Walt Disney's plan to buy the film and television assets of Rupert Murdoch's 21st Century Fox for $71bn (£54bn).
BBC News The Daily Telegraph, Business, Page: 29 The Times, Page: 48-49
Countrywide emergency cash call forthcoming
Countrywide will make an emergency cash call this week amid concerns that chairman Peter Long is too stretched to oversee the firm. The estate agency chain is expected to say it needs to raise around £125m following four profit warnings in eight months, while results for the first half of this year, to be unveiled the same day, are expected to show a £20m drop in pre-tax earnings.
Mail on Sunday The Sunday Telegraph, Business, Page: 1
Rightmove profits prove benefits of business model
Rightmove has reported a 12% rise in pre-tax profit to £98m in the six months to June, hitting a record number of prospective buyers visiting its online platform at an average of 139m visits a month, up 5%. Revenues climbed 10% to £131m, driven by a growth in average revenue per advertiser, which rose by £76 from a year ago to £987 a month.
Losses widen at Hobbycraft
Losses widened at arts and craft retailer Hobbycraft last year as it spent £13m to service its debts. Ebitda climbed 16% to £8.7m, but the company's bottom line suffered as it paid £1.1m in restructuring costs on top of the debt fees. Like-for-like sales, excluding revenues from new and closed stores, were up 3.9%, and total revenues grew 6% to £168.5m after the company opened new shops.
The Daily Telegraph, Business, Page: 31
Force India set for administration
Formula One team Force India has been placed into administration. A court hearing which is scheduled to take place during the summer break that will determine the team’s future, although chief operating officer Otmar Szafnauer said investment was “imminent”.
The Independent, Page: 39
BoE tipped to raise rates
The Bank of England is expected to raise interest rates this week, pushing them to their highest level since 2009. The Monetary Policy Committee is widely expected to increase rates from 0.5% to 0.75%. Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said: “The committee likely won't vote unanimously to hike rates - we look for a 7-2 split - but most members still believe that inflation will exceed the 2% target in the medium term if they don't start to withdraw some monetary stimulus now.”
The Sunday Times, Business, Page: 1 The Mail on Sunday, Page: 46 Sunday Express, Page: 53 The Observer, Page: 46-47