TSB suffers £105m loss
TSB has reported a loss of £105.4m for last year, down from a profit of £162.7m the previous year. The loss was pinned on the bank’s disastrous IT upgrade which resulted in £330.2m in costs, which would be partly be offset by £153m that TSB said it expected to recoup from computer provider Sabis. Some 80,000 customers switched their bank account away from TSB in 2018, 30,000 more than in 2017. The bank added that customer deposits fell by 4.7% to £29.1bn last year, which the bank said was due to planned changes in savings products. Customer lending also decreased by 2.7% to £30bn. TSB’s executive chairman Richard Meddings commented: “Last year was TSB’s most challenging year. But we enter 2019 with renewed ambition to re-emerge as the leading challenger bank in the UK - firmly on the side of the customer.”
MP in stricter banking rules call
MP Kevin Hollinrake has called for stricter banking rules to stop businesses in financial difficulties from being mistreated. In a letter to City minister John Glen he said the UK “urgently requires clear regulations that stipulate that lenders must outline the procedures for dealing with borrowers in financial difficulties.” He added: “In contrast to new protections in Ireland, SME lending in the UK is largely unregulated.” Mr Hollinrake warned that the Senior Managers Regime remains “a largely untested and untrusted method of holding individuals accountable for misconduct”. He also told Mr Glen of concerns over the City watchdog, saying: “If you gave me a choice of the Financial Conduct Authority or a tribunal, give me the tribunal any day.”
Investment banks taking on more UK staff
New figures from Reuters have revealed that major investment banks are hiring more staff in Britain than in France and Germany put together – contrary to fears that they would abandon the UK after Brexit. The research showed that big foreign banks are advertising 1,545 British-based jobs at present. Meanwhile, the same firms are looking to fill 301 positions in France and Germany. To produce the figures, Reuters analysed adverts placed by Goldman Sachs, JP Morgan, Morgan Stanley, Bank of America Merrill Lynch, UBS, Credit Suisse and Deutsche Bank.
Varley worried that Dalai Lama would ruin deal
A court has heard that former Barclays CEO John Varley was concerned the Dalai Lama would ruin his search for outside investors to prevent the bank from being forced to a UK government bailout during the financial crisis. In a letter to Barclays’ chairman Marcus Agius, he expressed concerns that a meeting between Gordon Brown, the PM at the time, and the Dalai Lama would lead to difficulties with the Chinese and the country’s development bank, the CDB.
Deaf customers left isolated as branches close
According to the charity Action on Hearing Loss, people with reduced hearing are struggling to access their bank accounts as more branches close. Impaired hearing is a problem that disproportionately affects older customers, who often lack confidence with online banking as well. Deaf Direct, another charitable group, has called on banks to give staff more training on how to help customers with hearing loss.
Bud flowers after investment
Bud, a fintech firm launched to help banks become compliant with “open banking” reforms, has raised £20m from investors including Goldman Sachs and HSBC. Bud has also worked with the Treasury on the “Rent Recognition Challenge”, which helped people to record their payments history to help towards their credit score.
Starling to put Irish licence on the agenda
Digital bank Starling will this week launch support for euro currency accounts, taking a slice out of its fintech and traditional competitors. Starling said it had designed the account for Europeans living in the UK, those who work here but are paid in euros, or need to make payments in euros on a regular basis.
Metro facing investor lawsuit
The Mail claims that Metro Bank is facing legal action from investors after an accounting error wiped £1bn off its stock price. Meanwhile, Alex Brummer writes in the Mail that rendering Metro crisis-proof again will require a further capital injection and the insertion of a more cautious executive team. Separately, Fidelity which owns 7.9% in total of Metro, has put a 3.1% stake in the bank out on loan - a move which the Times suggests could give ammunition to hedge funds betting against the troubled lender.
Clydesdale compensation will be available
Alleged victims of mis-selling by Clydesdale Bank will now be able to claim compensation under a review of the historic mistreatment of small business customers funded by the banking sector.
Female founders miss out on venture capital funds
Research commissioned by the Government has found that less than 1% of venture capital investment in the UK goes to female-led start-ups. The research, which was compiled by the British Business Bank, Diversity VC and the British Private Equity and Venture Capital Association, means businesswomen could be missing out on billions of pounds in funding, as companies with no women on their founding teams hoover up an estimated £5bn a year. Liz Truss, chief secretary to the Treasury, said: “It is incredible that in 2019 men seem to have a virtual monopoly on venture capital. We need more investment going into start-up ventures and more women putting businesses forward.” In an article in the Telegraph, Ms Truss states that female entrepreneurs need to “celebrate” making a profit and be less “squeamish” about making money. Josephine Moulds adds in the Times that women can break the mould of venture capitalists.
Firms set to swoop on oil and gas fields
Total is expected to unveil a $1.3bn sale of oil and gas fields in the North Sea to Albion Energy and First Alpha Energy Capital this week, according to the Sunday Telegraph.
KKR explores sale of Hitachi Kokusai chip equipment unit
KKR has received interest from two Chinese buyers for the chipmaking business of Hitachi Kokusai, which the private equity business bought for $2.2bn back in December 2017.
Deutsche Bank plans more cuts
Deutsche Bank is planning even deeper cost cuts after disappointing profits. The German bank made €341m (£299m) last year, the first time it has avoided a loss since 2014. However, the result fell short of the €505m many investors had been expecting and Deutsche ended the year with a difficult fourth quarter. Full-year sales across the group slid 4% to €25.3bn, which Deutsche blamed on challenging financial markets and "negative" headlines about the bank. CEO Christian Sewing said the return to profitability “shows that Deutsche Bank is on the right track”. He also dismissed a rumoured merger with Commerzbank. Meanwhile, the FT reports that Deutsche Bank rejected a loan request from President Donald Trump back in 2016. The German lender was said to be worried about the reputational and financial risk.
Standard Chartered pays $40m fine after forex rigging probe
Standard Chartered has agreed to pay a $40m fine to settle claims that the bank attempted to manipulate the price of emerging markets currencies.
Lower Saxony backs German savings banks’ rescue plan for NordLB
The German state of Lower Saxony is backing a €3.5bn rescue plan for NordLB. The Hanover-based lender has come under pressure from the ECB to raise more capital.
Italian government plans new banking regulations
The Italian government is looking to approve new banking regulations in the coming months, including a rule that will separate banks’ commercial and investment businesses. Italy’s Deputy PM Luigi Di Maio also said that if the government needed to enter the capital of troubled Banca Carige it would take control of the lender.
Andrea Orcel: Davos man nears summit and then slips
Stephen Morris in the FT profiles former UBS boss Andrea Orcel, who now has some big decisions to make after Santander rescinded its offer for him to become CEO.
Australian regulator vows to tackle ‘cosy oligopoly’ of big banks
Rod Sims, head of the Australian Competition and Consumer Commission, has vowed to tackle the oligopoly between the country’s four largest banks, arguing that competition is the best way to fix the sector.
Business reason behind X-Trail decision
Nissan has blamed new diesel regulations and falling sales for its decision not to build its X-Trail car at the company’s Sunderland plant. Gianluca de Ficchy, chairman of Nissan's European arm, said that the decision had been taken for “business reasons”, with falling demand for diesel engines in vehicles and slowing sales of cars also understood to be factors. Mr de Ficchy added that “uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future”.
Ford confirms jobs losses
Ford has announced a voluntary redundancy programme at its Bridgend engine plant which will lead to the loss of 370 jobs. A Ford spokesman said: “The programme follows discussion with the union on matching the plant’s labour requirements to the projected production volume expectations in the near term.”
EU gives airlines deadline for no-deal Brexit
Brussels will provide airline groups a seven-month deadline to overhaul their shareholder make-up in order to retain full flying rights within the EU if Britain leaves without a deal. Meanwhile, Willie Walsh, the boss of International Airlines Group, has insisted that fears over the impact of a no-deal Brexit on air travel were overdone. He said he remained confident that Britain and the European Union could reach a comprehensive agreement on aviation.
Co-op returns to life insurance market
The Co-operative Group is returning to the life insurance market six years after it left the sector to pay off debt. Royal London will underwrite the Co-op product.
Asset managers count the cost of the big squeeze on fees
The FT reflects on a string of lacklustre results from asset management firms, which the paper suggest highlights the big squeeze on fees across the investment industry.
Rothschild takes on corporate brokers
Rothschild & Co is launching an investor advisory service to corporate clients in a move which will see it compete with established City brokers.
JP Morgan takes stake in pension-tech startup
JP Morgan has made a strategic investment in workplace pensions startup Smart Pension, as part of a fresh equity funding round. The size of the stake was undisclosed.
Wall St set for $1bn fee bonanza from pharma mega-deal
The merger between Bristol-Myers Squibb and Celgene is set to become one of the most lucrative for banks with dealmakers expected to collect about $1bn in fees.
LEISURE AND HOSPITALITY
Secret Escapes owner plots getaway
Secret Escapes, which offers members-only discounts on upmarket holidays, is holding talks with investment banks about a potential £500m stock market float. Founder Alex Saint has said previously that a float would be something he would explore for the business.
Manufacturers stockpiling at record pace
New research has suggested that UK manufacturers are preparing for Brexit by stockpiling raw materials at a record pace. The research by IHS Markit/CIPS found that companies were stockpiling goods in January at the fastest pace in the survey's 27-year history. Overall, the survey's Purchasing Managers' Index fell to 52.8 last month from 54.2 in December, which was a three-month low and the second weakest reading since July 2016.
MEDIA AND ENTERTAINMENT
Ad agency offloads stake in media group
M&C Saatchi has sold its final 25% stake in media buying firm Walker Media to Publicis for £25m. It comes after the firm sold a 75% stake in the company to Publicis in 2013.
House price affordability poorest since 2007
House prices in UK cities are outpacing wage growth by 11%, according to Lloyds Bank, which found that the ratio of average prices across 62 cities to average city earnings has reached 7.2, the highest level since 2007. The new report reveals that the average house price has risen over 37% from 2013 to its highest ever level of £248,233 in 2018. At the same time, annual earnings have only risen by 11% to £34,366.
Rush to remortgage ahead of Brexit
The FT examines how the uncertainties of Brexit are pushing homeowners to remortgage. Figures from UK Finance show that remortgaging rose to £9.2bn in October, the highest level for nearly a decade.
Ashley set to acquire Sofa.com
Sports Direct owner Mike Ashley is set to buy Sofa.com after rival furniture retailer ScS said it was no longer in talks about buying the business. According to reports, Mr Ashley had agreed a sale for a “nominal sum”, although there was no official confirmation.
Millennials pay scarred by financial crisis
New research from the Resolution Foundation has suggested that pay for workers in their 30s is still 7% below the level at which it peaked before the 2008 financial crisis. The think-tank said people who were in their 20s at the height of the recession a decade ago were worst hit by the pay squeeze. The research found those who stayed in the same job in 2018 had real wage growth of 0.5%, whereas those who found a different employer saw an average increase of 4.5%.