BANKING
Banks suffer IT shutdowns daily
An investigation by the consumer group Which? has found that banks and building societies are hit by more than one IT or security failure every day that could stop customers from making payments. The consumer group found that there were 302 incidents that potentially prevented customers from making payments in the last nine months of 2018. Barclays reported the most major incidents (41), followed by Lloyds Bank (37), Halifax and Bank of Scotland (31), NatWest (26), RBS (21) and Ulster Bank (18). Jenny Ross, Which? Money editor, commented: “Our research shows that these major banking glitches, which can cause huge stress and inconvenience to those affected, are even more common than we feared. This highlights why it is so important that a regulator is given responsibility to protect cash as a backup when technology fails and to ensure no one is left behind as digital payments become more common.” A spokesman for UK Finance said that banks worked “around the clock” to minimise disruption.
Banks hit by mobile phone hackers
Research by the Telegraph has revealed that bank customers are falling victim to a new fraud where criminals hack the codes which financial firms send via text messages to verify transactions. A small number of customers at Metro Bank and Santander have been affected by the scam. Michael Downs, of Positive Technologies, a software firm, commented: “It's not simple, but it's a lot easier than it was two years ago. You are going to see more of these attacks.”
Metro Bank warned to keep to terms of cash award
Metro Bank has been warned to keep the terms of a £120m grant to improve services for small business. The bank said the money would help it to open 30 branches in the north, among other improvements. However, some people close to the bidding process believe that Metro is using some of the grant to fund branches that were already in its growth plans. Nicky Morgan, chairwoman of the Commons’ Treasury select committee, said: “All those awarded funds, including Metro Bank, must stick to the conditions in order to achieve the aim of the scheme.” Meanwhile, hedge funds targeting Metro Bank have scooped up £100m from its accounting woes. Shares in the bank have fallen by 59% since it admitted a mistake in its accounts, wiping £1.3bn from its market value. Crispin Odey has taken the biggest short position in the bank, holding 3.3% of Metro Bank’s shares on loans.
Will the Rose review help female founders?
Peter Evans in the Sunday Times looks ahead to the Rose review which will examine the barriers facing women starting businesses. The review, led by Alison Rose, the CEO of commercial and private banking at RBS, will focus on issues such as increasing funding, offering mentorship and providing greater family-care support for female entrepreneurs. Ms Rose comments that she wants to “create interventions” to improve the “entrepreneurial life-cycle” for women: “If you can intervene at the right point in that funnel, then you’re disproportionately more successful at being able to advance.”
Hourican makes comeback
John Hourican, the former boss of the Bank of Cyprus, is reportedly being lined up to become the next CEO of consumer finance provider NewDay. His appointment is likely to be seen as the next step towards a stock market float of the company by its private equity owners, Cinven and CVC Capital Partners. Mr Hourican led RBS through the financial crisis before having to step down amid the Libor rate-rigging scandal in 2013.
Disparity between bank bosses pay
Figures compiled by the Mail on Sunday show that the 16 female board members at RBS, Lloyds, HSBC and Barclays were paid a total of £3.7m in 2019. In comparison, male board members, of whom there are 42, were paid £48m overall. On average, women earned £232,687 compared with £1.14m for men. Experts suggested that the pay gap could be explained by the fact that most of the women on bank boards are non-executive directors.
Small business owners demand banking tribunal
A poll of members by the Institute of Directors has found that seven in ten small businesses want a new tribunal service launched to help them resolve their disputes with lenders. The IoD said that business owners were unconvinced that an expansion to the ability of companies to access the Financial Ombudsman Scheme would be enough to level the playing field with banks.
Virgin agrees to refund credit card customers
Virgin Money has agreed to refund interest charges for some credit card customers who incurred fees after signing up for a new deal. The bank said it will refund some borrowers who were caught out when Virgin Money took over the Virgin Atlantic air miles credit card.
PRIVATE EQUITY
European investors double investment in Britain
Companies on the continent have embarked on a major deal spree in the UK over the last three years, despite Brexit, reports the Telegraph. S&P Capital IQ data shows 553 purchases of companies, property and stakes in fast-growing firms totalled $31.1bn over the past 12 months, up from $21.2bn over 497 purchases in the previous 12 months, and $13.6bn on 454 transactions in the same period of 2016-17.
KKR hires Goldman’s Asian investment bank chairman
KKR has hired Goldman Sachs’ chairman of investment banking in Asia, Kate Richdale, as an adviser. She will assist KKR with government relations, fundraising and dealmaking.
INTERNATIONAL
Berenberg boss accused of insider trading
Hendrik Riehmer, the joint managing partner of Berenberg, has been accused of being involved in a suspected multimillion-euro insider trading scandal. Prosecutors believe a former colleague and acquaintance of Riehmer made €3.2m in profit from their advance knowledge of the sale of shares in Hapag-Lloyd, the German shipping firm. Officials have frozen assets worth more than €20m after searching Mr Riehmer’s Hamburg home, the bank’s HQ and the offices of a property company in the city.
EU watchdog urges protection
The European Banking Authority has called on member states to protect customer deposits in branches of British banks in the EU if Britain leaves the bloc this month without a deal. Bank deposits are covered by national deposit guarantee schemes which protect sums up to €100,000 - but that does not extend to branches of a bank from outside the EU.
Andrea Orcel rejects advisory role at Santander
Andrea Orcel has rejected an offer of an advisory role at Santander. It comes after Mr Orcel’s planned appointment as Santander’s next CEO was withdrawn in January.
Basel committee calls for external checks on bank loans
The Basel Committee on Banking Supervision has called for external checks on the riskiness of banks’ loans following the failure at Metro Bank to properly categorise a range or mortgages.
AUTOMOTIVE
Ministers consider backing Tesla-style battery factory
The Sunday Times reports that talks are under way over state support for a shared “giga factory” – a UK version of Tesla’s battery factory in the Nevada desert. The talks are said to include Jaguar Land Rover, BMW, Nissan and Geely. A shared battery factory would allow the manufacturers to share the huge investment cost, while ministers would be able to claim it was supporting the whole industry.
Brexit crunch hits car firms
Analysts have said they expect UK-based car manufacturers to make 150,000 fewer vehicles this year even if Britain leaves the EU on favourable terms. The decline is being blamed on the UK’s crackdown on diesel, competition from global rivals and fears over Brexit. The experts have pinpointed five major plants which are at risk of closure as the UK prepares to leave.
Lyft losses accelerate
Ride-hailing company Lyft has revealed that it is yet to make a profit ahead of an IPO which could value the firm at between $20bn and $25bn. In its prospectus, Lyft published detailed financials for the first time, showing that while revenue rose to $2.2bn in 2018, losses grew to $911.3m.
FINANCIAL SERVICES
FCA probing Revolut compliance procedures
The Financial Conduct Authority (FCA) is looking for answers from Revolut after it was revealed that, for three months last year, the London-based start-up decided to switch from a system that prevented illegal activity to one which only flagged it once it had taken place. A letter informing the FCA of the decision was drafted but not sent. If wrongdoing is found Revolut could face large fines and the withdrawal of its e-money licence. Revolut chief executive Nikolay Storonsky said: “At no point during this time do we believe that we failed to meet our legal or regulatory sanctions requirements.” Meanwhile, Revolut is planning to press ahead with plans to enter the marketing and acquisitions arena. Tom Hambrett, head of legal at the firm, said that “acquisitions is definitely something we're open to” in order to enter new markets, but said the group still favours natural growth.
Provident under fire
The Sunday Times and the Sunday Telegraph profile the ongoing bid battle between Non-Standard Finance (NSF) and Provident Financial. NSF has launched a hostile bid for Provident, with John van Kuffeler, NSF’s founder, criticising Provident’s “failing” management team, which he accuses of being inexperienced and allowing costs to balloon during two years which have seen it crash out of the FTSE 100, announce an emergency rights issue and issue three profit warnings. Provident has said the bid offers little value to shareholders and urged them to reject it on the basis that it could have a “destabilising impact on stakeholders, including customers” for a long period of time.
London Stock Exchange Group to axe jobs
London Stock Exchange Group is set to cut 250 jobs in order to save £30m. Boss David Schwimmer said the plan to cut jobs from its global workforce was not prompted by Brexit but was required to create efficiencies after several deals in recent years. He added that the LSE would abandon targets on earnings margins and would instead focus on investment in data and analytics.
GAM lays off whistleblower at heart of crisis for Swiss fund group
Daniel Sheard, who contacted the FCA about concerns over a star fund manager at GAM, has been redundant from the Swiss fund group.
MANUFACTURING
Manufacturing hits four-month low
Manufacturing activity fell to a four-month low last month, according to the Markit/CIPS UK manufacturing purchasing managers’ index. The index showed a reading of 52.0 last month, lower than a revised reading of 52.6 in January. The research also revealed that manufacturers’ optimism about their prospects for the rest of the year fell to a 27-year low last month amid record stockpiling to cope with the potential fall out of a no deal Brexit.
Manufacturers see drop in exports
A new study by Make UK has revealed that exports have fallen behind domestic orders for manufacturing firms for the first time since 2016. Make UK said employment plans have picked up, indicating that manufacturers could be opting to hire a flexible workforce in the short-term rather than make long-term investments. Chief executive Stephen Phipson said: “Manufacturing needs certainty over Brexit to boost orders and exports and to protect jobs.”
MEDIA AND ENTERTAINMENT
Profits dip at WPP
WPP has revealed that its pre-tax profits dropped by almost a third last year to £1.46bn, a drop it blamed largely on restructuring costs. WPP also reiterated 2019 would be "challenging, particularly in the first half" as client losses from last year continues to weigh on the business.
REAL ESTATE
Unexpected rise in mortgage approvals
New figures have revealed an increase in the number of mortgage approvals from the start of the year. Almost 67,000 mortgages were given out to buyers in January, an unexpected rise of more than 2,000 compared with December’s figure. By value this amounts to £12.6bn of mortgage approvals, according to Bank of England data, the strongest start to any year since 2016.
RETAIL
LK Bennett set to file for administration
High street fashion house LK Bennett is set to file for administration, putting up to 500 jobs at 41 stores risk.
ECONOMY
Firms report weak growth
The CBI’s index of private-sector activity over the past three months dropped to -3 in February from zero in January. The figure was the lowest since April 2013. The CBI pinned the blame on the drop to fears of a no-deal Brexit and rising global trade barriers. “More and more companies are hitting the brakes on investment and day-to-day business decisions are becoming increasingly problematic,” the CBI’s chief economist, Rain Newton-Smith, said.