RBS to close one in four branches
RBS is closing 259 branches - one in four of its outlets - and cutting 680 jobs as more customers bank online. The closures involve 62 RBS and 197 NatWest branches. The bank said it would try to ensure compulsory redundancies were "kept to an absolute minimum". RBS said use of its branches by customers had fallen 40% since 2014. Research from Which? has revealed that Britain’s biggest banks have closed, or are closing, more than 2,000 branches since 2015. Meanwhile, John Howells, head of the Link ATM network, has predicted that cash machines will disappear from the high street within the next 10 years. Mr Howells believes payments with paper money will plummet over the next decade. As a result, he expects this to drive down the number of withdrawals from cash machines, meaning huge numbers will become unprofitable and shut down. Mr Howells said: “In a five to ten-year window, there will come a point where we'll have to not have ATMs. We need other ways for consumers to access cash, and the obvious way is through retailers' tills.” Separately, John McFall, the former chair of the Treasury Select Committee, has said the public should be told whether the big banks are refusing to support a free-to-use cash machine network.
SMEs advised to push for alternatives
Banks have been accused of failing to offer enough support to unsuccessful loan applicants, after figures showed the government’s bank referral scheme benefited just 230 businesses with about £4m in loans in its first nine months. Under the scheme, Britain's biggest lenders are required to pass on the details of any small businesses they turn down for loans to designated finance platforms that might then provide the needed funds. Adam Tavener, chairman of Alternative Business Funding, says business owners “should start conversations with banks by asking what the options are if they are turned down."
Lenders target small deposit holders with rate cuts
Two lenders have cut their rates for small deposit holders. Yorkshire Building Society has introduced a new two-year fixed-rate mortgage for buyers with a 5% deposit. The rate, 3.39%, is the lowest on the market, according to Moneyfacts. Virgin Money has also reduced the rate on its two-year fixes for those with a 5% deposit to 4.09%. Average rates for buyers with deposits of 10% and 5% have mostly fallen in the past year and remained largely unchanged in November, Moneyfacts' data shows.
Barclays axes free Kaspersky product
Barclays has stopped offering free Kaspersky anti-virus products to new customers following an official warning about Russian security software. The bank emailed 290,000 online banking customers on Saturday to say the move was a "precautionary decision". UK cyber-security chiefs are warning government departments not to use software from Russian companies for systems relating to national security.
Benefits of open banking
The Independent carries an interview with Becky Moffat, head of personal banking at HSBC. Ms Moffat discusses how the bank is breaking new ground with its open banking app. The app has been shaped around demand from customers to see all their accounts in one place regardless of the bank. It also includes a function called “balance after bills”, which shows current account balance minus the amount needed for regular payments.
Oakam secures investment
Specialist lender Oakam has secured a £35m investment from Victory Park Capital Advisors to help it expand and attract more customers from rival Provident Financial. The micro-lender, which has given £320m in short-term loans to financially excluded people, says the deal will help boost its lending by 180%.
Yorkshire Water up for sale
Deutsche Bank and the private equity fund Corsair Capital are looking to sell their stakes in Kelda, the parent company of Yorkshire Water. Deutsche and Corsair own 23.4% and 30.3% respectively, meaning bidders can own a controlling stake.
Loss of Electra will prove a blow for quoted private equity funds
Kate Burgess in the FT’s Inside Business column examines how the quoted private equity funds sector has diminished in recent months, with a look at Electra Private Equity.
Europe’s banks face glut of new rules
The Economist looks at how European banks are facing a glut of new regulations such as the Payment Services Directive and Mifid II, ten years on since the financial crisis. Meanwhile, large UK banks are teaming up with their counterparts in Switzerland and Japan to warn that Brussels’ proposals to ring-fence foreign capital could force them to exit their European businesses.
Big six US banks add $170bn to trading firepower
According to an FT analysis of public filings, the big six US banks have rebuilt their trading operations to $1.71trn under President Trump’s lighter-touch regulatory regime.
Swiss banks step up reports of suspicious activity by Saudi clients
Switzerland’s banks have begun to report suspicious account activity among their Saudi Arabian clients to the Swiss Money Laundering Reporting Office.
Crédit Agricole’s head hits out at Orange Bank
Philippe Brassac, the chief executive of Crédit Agricole, has dismissed Orange Bank’s potential to disrupt the market. “Frankly it’s a mono-player on mobiles that does nothing more than what we offer,” he said.
City’s ambassador fears lack of Brexit progress
Catherine McGuinness, chair of the City of London Corporation’s policy and resources committee, says her “nightmare” Brexit scenario is that the UK crashes out without a deal, which she says would risk markets seizing up. Ms McGuiness calls on Westminster to focus on the "absolute urgency" of securing transition. As it stands, "there is a question mark over whether 'the City' will retain its pre-eminence", she adds. Elsewhere however, a paper for think-tank Politeia concludes that if Britain leaves the EU without a deal it could be better for the City than if an agreement is signed. It says EU clients could continue to use UK-based financial services without any arrangement in place and with Britain having no interference on its regulations.
City firms size up Dublin
The Guardian examines how Dublin is faring in the race to attract banks, insurers and law firms from London after Brexit. Kieran Donoghue, head of international financial affairs at the IDA Ireland, said it has attracted “15 to 20 companies where investment has a Brexit dimension”. Another 30 groups are in the pipeline “advising us of their intention to invest in Ireland”, he adds.
LSE proves a bad advert for capitalism
The Sunday Times’ Iain Dey says events at London Stock Exchange over the past week illustrate why corporate governance rules are so important. He suggests rebel shareholder Sir Chris Hohn is right to be aggrieved if the LSE has kept shareholders in the dark about tensions in the boardroom. But he adds that if a 5% shareholder can dictate what happens in a company, “that's an equally grave corporate governance failing.” Elsewhere, the Mail on Sunday reports that former JP Morgan finance chief Blythe Masters is being tipped to become the new head of the LSE.
Insurers must step up to tackle climate change
Lloyd’s of London chief executive Dame Inga Beale says insurers must take the lead when it comes to tackling climate change. She identifies two main levers by which they can do this: by offering premium discounts to people who build more climate-resilient homes; and by helping the transition to a low-carbon economy.
Financière de l’Echiquier to combine with Primonial
Real estate specialist Primonial Investment Managers is to merge with Paris-based asset manager Financière de l'Echiquier, in what the FT says is a sign of fund managers seeking to capitalise on president Emmanuel Macron's reforms.
Fund outflows from junk debt moderates as market rallies
Outflows from the junk bond sector were $535m in the seven days to November 29, according to EPFR Global - the lowest since the onset of market volatility in October.
Fidelity to pass $42m research costs on to clients
Fidelity International is to pass on research costs of more than $42m a year to investors, in a move it says will better align charges with performance.
CVS set to acquire Aetna
CVS Health, America’s biggest pharmacy chain, is set to acquire Aetna, the healthcare insurer, for about $68bn.
LEISURE & HOSPITALITY
Thomas Cook plans to close 50 stores
Thomas Cook has said it is planning to close 50 of its 690 stores as part of a review of its UK retail network. The proposed closures will take place by March next year and will affect up to 400 staff at a mix of Thomas Cook and Co-operative Travel branded stores.
Cineworld close to deal for Regal Entertainment
Cineworld is nearing a $3.6bn agreement to buy American rival Regal Entertainment, according to the Sunday Times. The deal values Regal at $23 a share and comes after the companies confirmed talks last week.
Factory activity accelerates in November
UK manufacturing activity grew at its fastest pace in more than four years last month, according to the PMI Index compiled by IHS/Markit. The Index hit 58.2 in November, up from 56.5 in October and the best level in 51 months. Manufacturers reported solid demand from the UK and new, steeper gains in export orders, with especially high sales to clients in Europe and the US. Meanwhile, figures from the ONS show net flows of foreign direct investment into the UK hit a record high of £145.6bn in 2016.
MEDIA & ENTERTAINMENT
Facebook opens new London office
Facebook has opened a new office in London, in what will be the social media company’s biggest engineering hub outside the US, with more than half of the team focusing on engineering. In a first for the company, Facebook is also promising to house technology start-ups in the new building, running an “incubator” designed to foster young companies. Some 800 employees are set to be located at the office in Rathbone Place.
Countryside shareholder slashes stake
Countryside Properties saw its worst day of trading in over a year on Friday after its private equity backer slashed its stake in the social housing developer from 23% to just 8%. Oaktree Capital made £230m from the sale. The sale leaves fund manager Neil Woodford as the largest shareholder in Countryside with an 11% interest.
Home sales average £10k under asking price
House sellers across the 25 largest urban areas in England and Wales are typically agreeing sales at around £10,000 less than the asking price. On average, properties are selling for 3.9% less than the asking price, Zoopla found. The company, which used data from the Land Registry, found the percentage gap between the amounts sellers want and what they eventually receive has widened over the last year.
Morrisons liable for staff data breach
Morrisons has been found liable for the actions of a former member of its staff who stole the data of thousands of employees and posted it online. Workers brought a claim against the company after employee Andrew Skelton stole the data, including salary and bank details, of nearly 100,000 staff. The High Court ruling now allows those affected to claim compensation for the “upset and distress” caused. Morrisons said it would be appealing against the decision.
Rescue of Palmer & Harvey looks uncertain
The Sunday Times reports that a rescue of Palmer & Harvey, which collapsed last week, looks uncertain after Japan Tobacco International and Imperial Brands, two of the company’s biggest customers, moved their business to DHL, the German-owned logistics group. Palmer & Harvey appointed administrators on Tuesday after a potential rescue deal involving Carlyle broke down.
Businesses advised to prepare for Corbyn government
CME Group has told businesses that Theresa May is "hanging on by a thread" and they should prepare for a government led by Jeremy Corbyn. The financial exchange operator has issued a paper entitled "What to Expect from a Prime Minister Corbyn", which includes a prediction that a Labour government would lead to a possible "nightmare scenario for the pound". The Sunday Telegraph also reports that a series of FTSE 100 companies are privately "contingency planning" for "socialist" policies that would accompany a government led by Mr Corbyn.
Ageing population weighs on economy
JP Morgan’s Bruce Kasman has warned that an ageing global population could be putting the brakes on economic growth. He said older workers are typically less dynamic than younger participants in the labour market, and that pensioners tend to spend their investments rather than making new ones.
Treasury plans Bitcoin crackdown
The Treasury has announced a crackdown on Bitcoin, amid growing concern the virtual currency is being used to launder money and dodge tax. Until now, anybody buying and selling Bitcoins and other digital currencies have been able to do so anonymously, making it attractive to criminals and tax avoiders. Ministers now want to bring Bitcoin in line with rules on anti-money laundering and counter-terrorism financial legislation. The Treasury select committee’s John Mann said he expected to hold an inquiry into the need for better regulation of Bitcoin and other alternative currencies in the new year.
Fears over levels of household debts
The Bank for International Settlements has warned financial watchdogs and central bank officials across the world to monitor household borrowing amid concerns that it could shake financial markets. Britain's household debt as a share of gross domestic product stands at 78%, the BIS noted, against 72% in the US and 92% in Australia. The BIS warned that levels of debt helped determine how far households would cut back on consumption after an economic shock.