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Daily News Roundup: Monday, 8th April 2019

Posted: 8th April 2019


Digital banks in fresh fundraising talks

Tandem is on track to achieve ‘unicorn’ status this year as it looks to secure a deal with a large growth equity fund to help fund its expansion abroad. The digital bank, which is set to become Britain’s next billion-dollar business, is in early stage discussions with predominantly US investors to raise more than £100m in exchange for a minority stake by the end of June. Tandem had nearly 500,000 customers at the end of last year, exceeding the company’s earlier forecast of 150,000 customers by the end of 2018. Meanwhile, Monzo is close to raising £100m of fresh funding in a deal that would almost double its valuation to $2.5bn (£1.9bn), making it Britain’s second-biggest fintech start-up. The cash injection, led by a new American investor, has been agreed by the digital bank’s board but could take several months to be signed off by the Prudential Regulation Authority.

Banks named and shamed for lack of transparency

Major banks and insurers have been named and shamed for failing to make clear their fees and charges, following a survey by the consumer group Fairer Finance. Bottom of the league for transparency on current accounts are the Clydesdale and Yorkshire banks, which were accused of failing to clearly display overdraft charges on their websites. TSB and Bank of Ireland also came under fire for a lack of transparency on mortgages and personal loans respectively, while insurer Endsleigh picked up the lowest rating for home cover.

Warning over fraud refund code

Experts have warned that “vulnerable” fraud victims are at risk of being let down by a new voluntary code because the term is not clearly defined. The code, which most banks have signed up to, comes into force at the end of next month and will help signatories decide when a victim of bank transfer fraud should get their money back. However, some banks say the term “vulnerability” - a key part of the new code - is poorly defined.

MPs call for inquiry into Lloyds

MPs have called on the Prudential Regulation Authority to investigate whether bosses at Lloyds Banking Group, including CEO António Horta-Osório, breached corporate governance rules by allegedly “covering up” the HBOS Reading fraud. In a letter to Mark Carney, the all-party parliamentary group on fair business banking said that executives had “withheld” a crucial whistle-blower’s report from the bank’s board for four years, which it claimed was in breach of a Bank of England stipulation that management must be “open and transparent” with non-executives.

Bramson in race against time to secure Barclays’ board seat

Ed Bramson has until the end of this month to convince 75% of Barclays shareholders to back his campaign for a seat on the bank’s board. The activist investor raised money from investors to buy a 5.5% stake in Barclays before his approach a year ago. But he is still working on a fully detailed proposal on how he intends to fix the bank.

Shareholders advised to vote against Santander vice chair

Santander shareholders are being urged by corporate governance watchdogs to vote vice chairman Bruce Carnegie-Brown off its board, following the botched effort to hire investment banker Andrea Orcel to run the bank. A spokesman for the bank argued that both the processes it had followed and the decisions that it had taken in relation to Mr Orcel had been correct.

HSBC investors to vote on pension U-turn

At HSBC’s annual meeting on Friday, shareholders will vote on a resolution which calls on the bank to either stop cutting the benefits of around 52,000 members in its old Midland Bank pension scheme or to compensate them instead.

Banks among UKs worst gender pay gap offenders

Barclays, Lloyds and Clydesdale Bank are amongst the top 10 large companies with the biggest gender pay gaps in 2018, with Royal Bank of Scotland the 13th-worst performer.


Private equity managers hit the road in quest for $1tn

A record 3,749 private equity funds were looking to raise money in January, up 63% on the same time last year, according to data from Preqin.

LDC backs tech buyout

Bosses at software developer Amberjack have secured a £17.6m investment from LDC to fund a management buyout.

Carlyle lines up $3.6bn for stake in oil group Cepsa

Carlyle has agreed to purchase a 30% stake in Spanish oil and gas company Cespa.


Trump pick approved for World Bank job

Donald Trump's pick for World Bank president, David Malpass, has officially been approved for the role. Mr Malpass, a Trump loyalist, was a senior economic adviser to the US president during his 2016 election campaign. Meanwhile, President Trump has stepped up his attacks on the US Federal Reserve by calling for the central bank to cut interest rates. He claimed that the Fed has "really slowed us down" in terms of economic growth, adding that "there's no inflation".

Standard Chartered faces fines over Iran sanctions

Standard Chartered is facing a hefty fine this week that could total hundreds of millions of pounds as it settles US charges over Iranian sanctions violations. The investigation relates to alleged lapses in Standard Chartered’s internal controls, which may have allowed clients with “Iranian interests" to conduct business though the bank between 2007 and 2014.

European banks vulnerable to another credit crunch

UBS analysts have warned that a combination of negative interest rates, over-exposure to sovereign borrowing and expanding debt bubbles has left European banks susceptible to shocks, creating the conditions for a fresh credit crunch on the continent.

Société Générale to cut London jobs

Société Générale is planning to cut hundreds of investment banking posts in Paris, London and New York. Chief executive Frédéric Oudéa last month outlined plans to cut €500m in costs from the lender's corporate and investment banking business by 2020.

Swedbank chairman quits

Swedbank chairman Lars Idermark has stepped down and will be replaced by Swedbank's deputy chair Ulrika Francke. His departure comes a week after the bank sacked its chief executive following allegations of money laundering.

Warren Buffett urges Wells Fargo to look beyond Wall St for next CEO

Warren Buffett, the largest shareholder in Wells Fargo, has told the bank that it should look outside Wall Street to avoid drawing criticism in Washington.


German car giants facing huge fines

German car giants could be hit with multi-billion-euro fines after EU regulators found they had colluded to block the development and introduction of clean air technology. The European Commission has concluded that BMW, Mercedes-Benz owner Daimler, and Volkswagen Group worked together to delay systems to reduce emissions from petrol and diesel cars.

Fiat teams up with Tesla

Fiat Chrysler (FCA) says a plan the firm has agreed with Tesla will help them avoid paying fines for violating new European Union emissions rules. Under the deal, FCA will pay for the right to count Tesla’s electric vehicles as part of the FCA fleet.


Boeing cuts 737 production

Boeing is temporarily cutting production of its best-selling 737 airliner following the recent crashes in Ethiopia and Indonesia. Production will drop from 52 planes a month to 42 from mid-April, the aircraft manufacturer said in a statement.


Nationwide gets back to its roots by building homes

Nationwide is “going back to its roots” and building new homes for the first time in a hundred years, as part of a not-for-profit venture challenging the major housebuilders’ grip on the property market. The building society is starting with the Oakfield project in Swindon, which will see the construction of 239 homes.


FCA probes pension scam

The Financial Conduct Authority is investigating four individuals who persuaded 6,000 savers to invest in failed high-risk schemes, as part of a £258m pension-transfer scam. The FCA is investigating the individuals as well as four unregulated firms that convinced savers to transfer their pension pots to unsuitable products that left them with no protection when they failed.

Fintech firm secures investment

Simudyne, a financial simulation tech start-up, is set to announce the closure of a $6m series A funding round, led by Barclays. The firm’s software allows financial institutions to test drive decisions and build analytics through agent-based modelling. CEO Justin Lyon said the firm will use the funding to gain more customers within financial services and enter new sectors later this year.

Lloyd’s overhauls code of conduct

Lloyd’s of London has drawn up a "modernised" code of conduct following claims of sexual harassment. It is understood that the revised code will be sent to staff this week.

FCA official pledges to use criminal powers against dirty money

Mark Steward, head of enforcement at the Financial Conduct Authority, says the watchdog will use the “full intention” of rules that enable it to target City firms which launder dirty money.

Nick Train doubles Schroders stake to 8% and urges US push

British fund manager Nick Train has doubled his stake in Schroders to 8% and urged the investment group to invest heavily in North America.


Manufacturers urge May to revoke article 50

Make UK, the lobby group that represents 20,000 manufacturing firms, has urged Theresa May to revoke article 50 if she cannot strike a Brexit agreement this week, claiming it is “critical for the future of UK manufacturing businesses and their workforces that we bring the current uncertainty to an end". The letter from Make UK chief executive Stephen Phipson comes after two-thirds of the group’s members backed revocation of article 50 if Mrs May does not reach a deal by the April 12 deadline. Mr Phipson said the possibility of leaving the EU without a deal is already having a “tangible impact” on confidence, with some firms halting investment or unable to agree new contracts with European customers.


Vue looks to refinance debt

Vue International has lined up advisers from JP Morgan as it seeks to refinance a £800m debt pile. The chain has £570m of loans that are due to be repaid in little over a year, while a further £200m of debt matures in 2023.


House prices 'subdued', says Halifax

New data from Halifax has shown that house prices across the UK continued to struggle last month, falling by 1.6% as the market continued to be “subdued” amid Brexit uncertainty. The number of mortgages approved remains 40% below where it was prior to the financial crisis and first-time-buyers are finding it difficult to raise a deposit.

Saving for a deposit takes a decade

Analysis by Hamptons International has found that find a first-time buyer with no financial help from their family will be forced to save until 2029 to raise a deposit on a new home. The figures were calculated based on a first-time buyer who earns an average wage and can save 22% of this every year towards a deposit.


Productivity dips

UK workers' productivity fell again in the final three months of last year, down by 0.1% compared with the same quarter a year ago. It was the second year-on-year quarterly fall in a row, after a 0.2% drop in the July-to-September period.


People forget passwords 36 times a year

New research from Lloyds Banking Group has revealed that the average person forgets one of their online passwords 36 times a year. A survey by the bank of more than 2,200 people found 40% preferred the ease of using biometrics, compared with 30% who said they preferred passwords. The research also revealed that up to two-thirds of adults have used the same password across two or more accounts – leaving them more exposed to fraud.

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