BANKING
Complaints persist of unhelpful banks
Some companies have just six or eight weeks of cash reserves left, warns Caroline Stockman, the chief executive of the Association of Corporate Treasurers, as banks continue to face criticism over their provision of emergency state-backed loans. Mike Cherry, the chairman of the Federation of Small Businesses, said: “It feels like the information has been handed over to those at the top and is yet to filter down to relationship managers.” Meanwhile, Royal Bank of Scotland and NatWest’s efforts have both been thwarted by India’s lockdown with teams there told to stay at home. The Sunday Telegraph’s Lucy Burton talks to businesses that have had swift service from banks, and those who have been told that the schemes do not even exist. Elsewhere, the Sunday Times cites business owners who complain the coronavirus business interruption loan scheme (CBILS) has simply shifted liability to directors, accusing banks and the government of a “complete misrepresentation” of the scheme.
FCA to lead crisis meeting with banks
The Financial Conduct Authorities interim chief, Chris Woolard, is to hold a meeting with the Bank of England and the heads of the high street banks to figure out how consumers can be helped during the coronavirus crisis. The Sunday Times says Woolard will be keen to prove the FCA can move swiftly and ensure bank bosses understand what is expected of them in a national emergency.
Virgin Money mulls putting redundancies on hold
Virgin Money is considering freezing its plans to close or merge 52 branches across the UK. The challenger bank unveiled plans to axe 500 job cuts in February as part of its integration with Clydesdale and Yorkshire Banking Group but is now in discussions to put the latest round of lay-offs on hold. The move comes days after Lloyds Banking Group decided to delay 780 job cuts due to the coronavirus outbreak. HSBC and Deutsche Bank have also told employees that cuts have now been suspended.
Bank worker wins bright lights payout
The Central London Employment Tribunal has awarded a bank worker almost £11,000 in compensation after she was forced to work in an office that was too bright. Rajni Duggal, a London-based consultant at HBOS, was made to work under fluorescent light despite her bosses knowing it gave her migraines and dizziness. The tribunal upheld her claim of disability discrimination after hearing she had to use a public lavatory at a nearby train station to “minimise exposure”.
Marcus launches top rate account
Goldman Sachs’ consumer banking unit Marcus has launched its first fixed-term savings bond, paying 1.45% to savers for the next 12 months, amid growing demand from customers who want to lock away their cash during the coronavirus crisis.
PRIVATE EQUITY
Hedge funds bet against British business
The Mail on Sunday reports that some of the world’s biggest hedge funds have placed bets against British businesses for the first time in years. US-based Farallon Capital has taken out a £20m short position against discount retailer B&M Stores, while Exor Investments has taken out a short contract worth about £50m against Ashtead. Meanwhile, Point72 Asset Management has taken out short positions against second-hand car advertiser Autotrader, insurer Beazley and fund manager Jupiter.
Funding collapses for start-ups
The Enterprise Investment Scheme Association has revealed that overall funding for start-ups through the tax-efficient enterprise investment scheme (EIS) has fallen by 70% since the coronavirus lockdown has been in place. “Start-ups are in freefall as there is no debt or equity support,” said Jasper Smith of Vala Capital, an EIS investor. “If we want the foundation for a recovery to be there after the virus, action has to be taken now.” Meanwhile, the Venture Capital Trust Association has demanded state aid rules be relaxed to allow its members to provide cash lifelines to their portfolio companies.
Venture capital-backed start-up fears over relief
Start-ups and their investors in the U.S. fear so-called “affiliation” rules could prevent access to the country’s $2trn stimulus fund. Justin Field, head of government affairs at the National Venture Capital Association, said excluding start-ups from the loan program could result in waves of layoffs.
INTERNATIONAL
Goldman Sachs, Morgan Stanley approved to take control of Chinese joint ventures
With the Chinese financial sector increasingly opening up to foreign investment, Goldman Sachs and Morgan Stanley have received approval from the China Securities Regulatory Commission to take control of their Chinese securities joint ventures.
Big banks reassure staff about job cuts
Big banks including Bank of America, Morgan Stanley, Goldman Sachs, Wells Fargo, Deutsche Bank, HSBC and Citigroup are postponing decisions about lay-offs as the coronavirus outbreak hits hard. Executives fear being unprepared if business suddenly returns once cities re-open, people return to work and markets get back to normal.
ECB orders banks to freeze dividends and share buybacks
Eurozone banks have been ordered by the European Central Bank to freeze dividend payments and share buybacks this year to “boost banks’ capacity to absorb losses and support lending.
EU backs bank rule delay to spur crisis lending
Valdis Dombrovskis, the European Commission’s financial regulation chief, has welcomed moves by global regulators to postpone new capital rules for banks saying it would help ensure that banks are financing the real economy.
Big companies raise record sums from bond market in dash for cash
Global corporate bond issuance by investment grade companies has hit $408bn so far this month as corporate treasurers attempt to shore up balance sheets to weather the economic downturn.
AUTOMOTIVE
Loan defaults threaten £110bn motor finance sector
Experts are warning that the motor finance trade will have to react quickly to the downturn brought on by the coronavirus crisis as millions who have bought their car through financial products such as personal contract purchase plans (PCPs) find themselves out of work or furloughed on lower pay.
Job losses loom unless outbreak controlled, warns Diess
Volkswagen is bleeding €2bn a week as sales cease everywhere except China. CEO Herbert Diess warned of severe job losses if the West cannot bring the coronavirus under control.
AVIATION
Virgin Atlantic set to ask for state aid
Virgin Atlantic is expected to ask for a government bailout worth hundreds of millions of pounds in the coming days, with other airlines also expected to request state aid. The Transport Secretary told MPs he can't rule out the state taking an ownership stake in UK airlines, but that current shareholders "must be part of the solution".
John Menzies seeks state support
Aviation services company John Menzies has reduced its workforce by 17,500 worldwide and said it could no longer give financial guidance for this year. The company is attempting to secure emergency government funding to deal with the impact of COVID-19.
CONSTRUCTION
Investors ditch shares in housebuilders and estate agents
Investors turned away from the UK’s housing sector in droves on Friday, after the Government effectively put the market on hold. Builders Barratt and Persimmon were among the biggest fallers on the FTSE 100 in early trading, as the City digested an update from the Government last night.
FINANCIAL SERVICES
Invesco’s Barnett battered by turbulent markets
Invesco’s High Income fund has lost 32.9% of its value due to its significant exposure to financials, airlines and the big oil companies and huge investor outflow from income stocks.
Provident withdraws 2020 guidance
Provident Financial has withdrawn forward guidance for 2020 and said it would no longer propose the 2019 final dividend of 16p per share at its AGM. "The impact of COVID-19 on the wider UK economy and our own financial performance clearly remains uncertain," CEO Malcolm Le May said.
Insurers to discuss pandemic cover
The Association of British Insurers is set to hold talks with the government about the creation of a state-backed insurance scheme for small businesses to protect them should another catastrophic pandemic occur.
RWC poaches BNY Mellon equity team
RWC Partners has hired Nick Clay and three of his colleagues from BNY Mellon’s subsidiary Newton. The FT says the move boosts RWC’s credentials as a high-conviction active asset manager.
US legal battle looms over coronavirus insurance payouts
Lawmakers in the US are considering legislation that would force insurers to pay for claims arising from the coronavirus pandemic, which the industry insists are excluded from its policies and could pose an “existential threat” to their business.
LEISURE & HOSPITALITY
Carluccio’s considering insolvency options as coronavirus bites
Italian casual dining chain Carluccio’s has appointed administrators to look at insolvency options after it was forced to close its restaurants as a result of the coronavirus pandemic. Carluccio’s has more than 70 restaurants across the UK but closed around 35 sites last year as part of a CVA. Elsewhere, the Restaurant Group, which owns Wagamama, Frankie & Benny's and Garfunkel's, has been forced to shelve a £500m debt restructuring as credit markets dry up.
Tui secures €1.8bn loan to navigate coronavirus crisis
Tui is to receive a €1.8bn (£1.6bn) emergency bridging loan from the German federal government, subject to final approval by Tui's banks, as the tourism giant attempts to survive the coronavirus crisis.
MEDIA & ENTERTAINMENT
UK broadband providers lift data caps
Following talks with the UK government and telecoms regulator Ofcom, major broadband providers have agreed to remove all data caps on fixed-line broadband services that have become a lifeline for people isolated at home during the coronavirus crisis.
Virgin Media faces £4.5bn compensation payout after data breach
Virgin Media is facing £4.5bn in compensation claims after customers’ personal data was published online, lawyers say.
REAL ESTATE
Over 1000 mortgages gone in two weeks
Britain's banks and building societies withdrew over 1,000 deals in two weeks while having to deal with thousands of homeowners seeking payment holidays. Some of the biggest lenders, including Lloyds Banking Group and Barclays, have stopped offering most loans to people with smaller deposits, amid predictions that property prices could fall 10% in six months because of the COVID-19 crisis. Others have withdrawn deals for the self-employed, whose incomes are thought to be the most vulnerable. Moneyfacts, a data analysis site, says that 1,062 residential and buy-to-let mortgages were withdrawn from the market between March 10, when the Bank of England made the first of two rate cuts, and March 26. The total number of deals fell by 15%.
RETAIL
Arcadia to suspend pension payments
Arcadia Group, the empire run by retail mogul Sir Phillip Green, is to suspend pension scheme payments. The move has the agreement of trustees and has been done in an effort to preserve cash in response to the coronavirus pandemic.
SPORT
Football leagues face billions in losses
Neither the Premier League nor other major European leagues are insured against losses resulting from the coronavirus pandemic, such as repayments to broadcasters if the season is not completed. The Premier League, Serie A, La Liga, the Bundesliga and Ligue 1 face estimated combined losses of £3.6bn. The only way to limit these would be to play games behind closed doors.
Saudi's sovereign wealth fund moves on Newcastle
A consortium led by the Public Investment Fund (PIF) of Saudi Arabia has moved closer to a takeover of Newcastle United football club, with the Premier League now informed of the bid. PIF will take 80% of the club while Amanda Staveley’s PCP Capital and Reuben Brothers are expected to take 10% each. Progress on the deal has surprised some with the coronavirus pandemic suspending all football.
ECONOMY
Governments and banks urged to do more
Agustín Carstens, general manager of the Bank for International Settlements, has urged governments and central banks to do more to aid their economies threatened by the coronavirus crisis. He said more stringent solutions were needed than those used to combat the 2008 financial crisis. Carstens said that contrary to the 2008 crash, when banks were discouraged from offering loans larger than borrowers could afford, he was now concerned by a drop off in lending as capital markets are closing to businesses. He suggested banks should make use of capital buffers, while a global freeze on bank dividends and share buybacks was also needed. The comments heap further pressure on Andrew Bailey, governor of the Bank of England, to put a stop to £7.5bn of dividends due to be paid out by British banks over the next few weeks.
Virus fears lead to £4bn of dividends being scrapped or deferred
Analysis by online investing platform AJ Bell shows £4.2bn of dividends have been axed or deferred so far this month as hundreds of companies across the economy show prudence in the face of the massive and unpredictable disruption caused by the coronavirus.