UK banks surprise laggards in EU stress tests
Barclays and Lloyds Banking Group were the surprise laggards in the European Banking Authority’s latest stress tests for the sector. The latest test measured banks’ ability to withstand theoretical market shocks like a rise in political uncertainty against a backdrop of plunging economic growth, a disorderly Brexit or a sell-off in government bonds and property. None of the 48 banks tested in the health check dropped below the 5.5% threshold, but Barclays and Lloyds unexpectedly came in among the three worst performers, along with Italy’s Banco BPM. A spokesperson for the Bank of England said: “The results of the EBA stress test confirm the results of earlier Bank of England stress tests that the four participating UK banks would be resilient to a severe economic and market stress.”
New Barclays chairman under pressure over tax avoidance schemes
The incoming chairman of Barclays, Nigel Higgins, has been urged to disavow the use of tax avoidance schemes after it emerged that he was a member of the Film Development Partnership and Eclipse Film Partners for several years before the schemes were shut down by the tax authorities. John Mann, a Labour member of the Treasury committee, called for Mr Higgins to confirm his position on tax. Meanwhile, Mr Higgins is profiled by Patrick Hosking in the Times, who calls him a “safe pair of hands” and contends that he is unlikely to change the bank’s strategy. The new chairman is also profiled by Philip Augar in the FT who charts the bank’s history. Augar says Mr Higgins is taking over a bank torn over its mission and strategy.
Lloyds to replace some debit cards
Lloyds Banking Group has confirmed it is reissuing debit cards to customers affected by cyber-attacks on Ticketmaster and British Airways. The bank has reissued debit cards to all customers that have made purchases on Ticketmaster's website and is also working with BA to establish which customers have had their details compromised during two cyber-attacks. Meanwhile, Barclays confirmed that in the event of a data breach, it would replace the debit cards of customers who may have been affected as a precautionary measure. HSBC said it would also replace a customer’s card if that was their preference.
Tough for newcomers to thrive
Anne Boden, the boss of Starling Bank, has said that conditions remain tough for new market entrants despite renewed efforts to boost competition in the banking sector since the financial crisis. While a raft of new firms entered the lending market, Ms Boden said few have managed to push on to launch current accounts for everyday retail customers. She said: “We were, I think, the second bank to go through that authorisation process. But you know, there was a whole raft of digital start-ups going through: there was Atom Bank, Tandem Bank, Starling and Monzo. And these four banks went through the authorisation process. But only ourselves and Monzo ended up doing current account banking - and that's difficult.” Meanwhile, the boss of Metro Bank insists that competition is stronger than it was in 2008. CEO Craig Donaldson said: "There are more challenger banks, I think that there's an acceptance of new organisations and that people can see the banks are trying to create competition."
Banks demand greater scrutiny of P2P lenders
According to the Sunday Telegraph, big banks are calling on the Financial Conduct Authority and Lending Standards Board to “level the playing field” on regulation of the peer-to-peer lending sector. A source at one high street lender told the paper that the recent float of Funding Circle and problems at property lender Lendy had raised the profile of P2P firms and the need for “adequate regulation”. The FCA has consulted on new rules to tighten regulation of P2P lenders, while the LSB said it was “engaging” with lenders.
National Savings struck by IT glitch
National Savings and Investments has been hit by IT problems, causing delays for 9,000 customers transferring money from their accounts. Until Friday night, staff at the savings bank had been unable to see details of savers’ accounts since the previous Tuesday. Meanwhile, a number of customers requesting transfers of their money have experienced a delay of 24 hours.
Consumers hit by end of credit card deals
Families planning to fund their Christmas on plastic have been hit by a decline in the length of interest-free credit card deals. Since the start of October, Barclaycard, Bank of Scotland, Halifax, Virgin Money, Tesco and Lloyds Banking Group have all cut either their offers on interest-free balance transfers or 0% purchases. Data shows that in January, the average balance transfer fee stood at 2.04%, while it has now risen to 2.25%.
Marcus signs up 100,000 customers
Goldman Sachs’s new retail bank Marcus has signed up 100,000 customers since its launch just over a month ago. Executives revealed that the bank had attracted deposits of more than £2.3bn, meaning that the average saver has deposited £23,000. Marcus is now planning to launch more products, including a cash Isa and wealth management service.
Web Summit to launch venture capital fund
The FT profiles Amaranthine, a new venture capital fund, which is being launched by Web Summit, the technology conference. The fund will take minority stakes in companies at all stages.
BAML steps up Brexit plans
Bank of America Merrill Lynch has announced the relocation of Luigi Rizzo, its head of EMEA investment banking, to Paris in 2019 while Michael Coppock, head of EMEA financial institutions corporate banking, will go to the French capital at the same time. The pair will take on extra responsibilities as part of their move.
GE Capital calls time on commercial paper borrowing
GE Capital is to stop using commercial paper, in a landmark moment for the business that was once the largest borrower in the market. The move could add to its financing costs.
More than 30 Goldman executives reviewed 1MDB deals
According to the FT, more than 30 Goldman Sachs executives, including the bank’s boss David Solomon and his predecessor, Lloyd Blankfein, reviewed the 1MDB debt deals.
Questions raised over AIB €1.1bn problem loans sale
Allied Irish Banks has denied it took advantage of a transitional accounting arrangement to boost its profits.
India business groups back Narendra Modi in RBI spat
Leading business groups in India have backed PM Narendra Modi’s government which has urged the Reserve Bank of India to ease restrictions on shadow banks and state lenders.
Ineos in talks to produce cars at Ford plant
Chemicals firm Ineos is in talks with Ford about using its Bridgend plant to build a new off-road vehicle. Ineos Automotive plans to build a car to replace the Land Rover Defender, which went out of production in 2016.
Uber report looks to rebuild goodwill with regulators
Uber has published a new report about its safety efforts, which it hopes will rebuild goodwill with regulators. Critics contend that the firm still has a long way to go with self-driving car safety.
IAG to invest in airline
IAG is to invest an extra £440m a year in British Airways. Boss Willie Walsh said IAG would spend an annual £2.3bn saying he was not afraid to make investments as the UK prepares for Brexit.
Construction PMI recovers despite weak optimism
The construction sector rebounded in October, but business optimism hit its weakest level in almost six years. The Markit/CIPS UK Construction PMI showed a stronger-than-expected reading of 53.2 in October, up from 52.1 in September. Civil engineering grew at the strongest pace since July last year, offsetting the weakest growth in housebuilding and commercial construction in seven and five months respectively. The data also showed a slower rise in new business volumes, although employment rates increased.
CMA says price comparison site may be breaking the law
The Competition and Markets Authority has accused price comparison site ComparetheMarket of keeping the cost of home insurance premiums artificially high by using so-called “most favoured nation” clauses with insurers to stop them advertising more cheaply elsewhere. The finding could result in a fine of up to 10% of global group turnover for the company’s owner, the financial services group BGL.
Being loyal costs with insurance
Following reports that the Financial Conduct Authority is to investigate the general insurance market, the Mail on Sunday notes the regulator’s finding that buyers of household insurance who renew every year with the same insurer end up paying 70% more after five years than someone buying the identical policy from the same provider for the first time.
Insurer fined over phone complaints
Liberty Mutual Insurance Europe has been fined £5.2m by the Financial Conduct Authority for its mishandling of mobile phone cover. The insurer was punished for failings over claims and complaints.
GAM rebuffs Schroders approach for hedge fund unit
GAM has rebuffed an offer from Schroders to sell its Systematic division, which handles the Swiss money manager’s Cantab quantitative hedge fund unit.
Fintech targets fund managers
Sharegain, a UK-Israeli start-up which aims to open up the practice of securities lending to a wider market, has begun to target asset managers.
LEISURE AND HOSPITALITY
Casual Dining Group to reduce costs
Casual Dining Group, the owner of Café Rouge, has called in a restructuring adviser in an attempt to strong-arm landlords into cutting rents. Despite having closed more than 40 restaurants over the past two years, Casual Dining Group said it faced a "tough operating environment" and needed to reduce costs further.
British Steel eyes foothold in US manufacturing
British Steel is considering a bid for Johnstown Wire Technologies, a US producer of carbon and alloy wire. The move would give British Steel a foothold in the US.
IWG boss mulls property business spin-off
Mark Dixon, chief executive of serviced offices group IWG, is reportedly drawing up plans to split the company in two. Under the proposals, IWG would separate its property estate from the rest of its operating business.
Emoov admits situation ‘precarious’ and puts itself on market
Emoov has confirmed it has put itself up for sale, with founder Russell Quirk admitting that its financial situation was “precarious”. Emoov said broker Arden Partners has been engaged to seek a buyer, and it had already been approached by potential candidates.
Dunkerton looks to regain control of Superdry
Superdry founder Julian Dunkerton says he is making rapid progress in his bid to regain control of the retailer, claiming he has met eight of Superdry’s 10 largest shareholders over the last week. He also held talks with two leading activist fund managers with a view to gaining their support.
Business confidence slumps
Business confidence has fallen to its lowest level since the financial crisis, according to the latest snapshot index from the ICAEW. The Business Confidence Monitor survey generated an index reading of -12.3 for the current quarter, compared with -0.2 for the third quarter. The survey found that 42% of businesses were less confident about their outlook than they were last year, compared with 31% in the last quarter.
Pay rises slow for third of workers
Research by the ONS has revealed that more than 10m workers received a pay rise of 1% or less last year. The ONS said almost 32% of Britain's workforce of 32.5m people were given an increase that was less than one-third of the inflation rate, which reached 3.1% in November 2017. Most workers lost out last year, the ONS added, after it found the median gross weekly earnings for full-time employees grew by 2.2%.
Business leaders call for second referendum
More than 70 business leaders have signed a letter to the Sunday Times calling for a public vote on the UK’s Brexit deal. The letter which was coordinated by The People’s Vote campaign, states that a “destructive hard Brexit” will damage the UK economy. It calls for a ballot on whether to accept the terms of the UK’s departure from the EU. Theresa May has said asking for a second vote would be a betrayal of the public’s trust. A Downing Street source said: “The Prime Minister has been clear - no second referendum.”
New £50 note will feature British scientist
The Bank of England has asked the public for nominations for its new £50 note. The Bank said that nominations can include anyone who worked in any field of science including astronomy, biology, bio-technology, chemistry, engineering, mathematics, medical research, physics, technology or zoology. Frontrunners include Stephen Hawking, Alan Turing and Ada Lovelace.