Banks given end date for Libor
The Financial Conduct Authority (FCA) and Bank of England (BoE) have confirmed that banks have until December 2021 to cease submitting rates for the calculation of Libor – the benchmark rate-setting mechanism used between global banks for financial transactions. They will instead need to base their transactions and products upon one of the Risk-Free Rates administered from London, New York, Frankfurt, Zurich and Tokyo. The FCA concluded that Libor is no longer robust enough for international benchmarks in a 2017 report. BoE governor Andrew Bailey said confirmation of the cut off marks “the final chapter in the process” to remove reliance on unsustainable rates “and build a more robust foundation for the financial system”.
FCA: Repossessions can resume in April
The Financial Conduct Authority (FCA) has said that repossessions may be allowed from April but only as a last resort. The watchdog implemented a moratorium amid the coronavirus crisis, protecting people from repossession proceedings, with this extended to April in January. The FCA has said that as of next month, firms are able to enforce repossessions if they act in line with guidance saying they should “only take place as a last resort if all other reasonable attempts to resolve the position have failed”. The City watchdog added: “Firms will also need to comply with any relevant legislative requirements which may prevent firms from enforcing repossession in certain parts of the UK.”
Starling Bank secures £270m in fresh funding
Starling Bank will today announce that it has secured more than £270m from investors from its latest share sale - significantly more than the anticipated £200m. Fidelity Management & Research led the funding round with the Qatar Investment Authority, Railpen and Millennium Management all acquiring stakes as well.
Lloyds plans to become private landlord
Lloyds is reportedly planning to become a large private landlord, with it hoping to buy and rent out new and existing housing stock as it searches for new sources of revenue. Mark Brown, general secretary of BTU, a union for Lloyds staff, commented: "Lloyds should stick to financial services. The private rental market is such a risky business and, if things go wrong, the bank's reputation could take a hammering."
NatWest closes the last of its back-up offices
NatWest has shut down its last three disaster recovery offices as the pandemic has shown workers were able to continue operations from home. One industry executive told the Telegraph: “In future, banks will have to make decisions about whether those remote sites are still necessary.”
Passion raises £45m to fund wave of start-ups
Passion Capital has raised £45m to invest in more British start-ups. An early backer of Monzo, the fund’s Eileen Burbidge said it would be avoiding challenger banks and looking instead at fintech start-ups that could transform other sectors.
UBS chief Hamers on track to be one of Europe’s best-paid bankers
Ralph Hamers has been paid $4.5m in his first four months as UBS CEO. The rate exceeds his full year earnings as head of ING and makes him one of Europe’s highest-paid bankers.
HK’s future as a hub uncertain
The Sunday Telegraph’s Louise Moon says uncertainty over how Chinese policies will fundamentally change Hong Kong raises questions over its future as a financial hub. Hong Kong Stock Exchange ranked as the world's second-largest IPO market in 2020, raising £36.3bn from 140 listings, trailing only New York's Nasdaq.
Israeli banks told to defer dividends
Israel’s banking regulator said on Sunday that banks should defer dividend payments until at least the fourth quarter of 2021, citing ongoing risks to the banking system and economic uncertainty.
Aston Martin promises to make electric models in UK
The boss of Aston Martin has promised the carmaker will build its electric models in the UK from 2025, with an SUV set to be made in Wales and sports cars in Gaydon in the Midlands.
Rolls-Royce set to reveal £4.2bn pandemic pain
Rolls-Royce is expected to reveal on Thursday that it burned through £4.2bn in 2020 and suffered an underlying pre-tax loss of £3.1bn on revenues of £11bn – down £4.5bn on last year.
Brokers warns investors caught up in trading frenzy
Britain’s biggest brokers have issued a warning about the dangers of speculative investing as trading levels soar and customers pile into risky stock market bets. Trading by customers of Hargreaves Lansdown doubled last year, while data from Interactive Investor shows 2020’s record levels are set to be broken in 2021. Tom Selby, of AJ Bell, said while greater trading activity was a natural result of volatile markets, “what is concerning is a new generation of investors who are simply investing in things because of what they see on social media”.
Britain looks to lead on global services agreement
Britain will look to spearhead moves to create a global trade agreement for selling services such as banking, insurance and legal advice in a move that could boost the UK economy. Emma Dunkley in the Mail on Sunday reports that senior ministers and City lobby groups have held private talks over proposals that would open up global markets so countries can export services to fast-growing economies. Ms Dunkley says Brexit has given the UK the chance to push for an agreement on exporting services, with Britain “unshackled” from countries with different priorities.
Gupta owes struggling Greensill billions
Analysis shows that Sanjeev Gupta owes more than £3bn to Greensill, the finance house on the brink of administration. Mr Gupta’s GFG Alliance has bought steel and aluminium assets from a number of companies via invoice discounting, with the acquisition spree fuelled by Greensill’s supply chain finance funds. Greensill has been thrown into turmoil after Credit Suisse suspended its $10bn supply chain fund. Credit Suisse is to wind down supply-chain finance funds worth around $10bn linked to Greensill Capital. It will start repaying investors around 80% of the $3.7bn it has available. Meanwhile, European Central Bank supervisors have asked lenders to provide details of outstanding loans to Greensill and GFG as part of efforts to determine whether the crisis is contained.
Pension savers face steeper tax bills
The Telegraph’s Jessica Beard says “huge numbers” of pension savers will be hit with higher tax bills due to a freeze on the lifetime allowance. She cites figures suggesting that more than 290,000 workers already have pension wealth above the lifetime allowance but have not yet triggered the tax charge, while a report by Royal London suggests 1.25m non-retired people are projected to breach the allowance.
Altmann: Boldness needed on fund assets
In a letter to the Times, former Pensions Minister Baroness Altmann commends the Chancellor for the “approach of spending today while promising tax rises tomorrow” apparent in his Budget but says the “main missing stimulus” was a “lack of boldness” in pushing more of the UK’s £2trn defined benefit pension fund assets into growth projects. This, she argues, would provide much better long-term returns for both the country and each scheme.
UK investors and companies call for markets reform
A new report from the QCA says smaller listed companies should be exempt from “burdensome listing requirements and excessive regulatory scrutiny” if they are to be attracted to listing publicly.
Davy’s CEO steps down after bond deal revelations
Brian McKiernan has resigned as CEO of stockbroker Davy Group following revelations that some executives looked to profit from a bond deal by secretly taking the opposite side of a client’s trade.
Danish pension group criticised for fossil fuel exposure
The Danish pensions and insurance provider PFA has come under fire for financing tar-sands oil production in Alberta, Canada, with investors saying it contradicts the group’s environmental pledges.
LEISURE AND HOSPITALITY
Aprirose seeks buyer for QHotels
Aprirose is reportedly seeking to sell QHotels, a chain of four-star properties which it spent £525m acquiring in 2017. The property investor is said to be working with advisers to offload the business.
House prices up 5.2% in February
Figures from Halifax show that house prices rose 5.2% year-on-year in February, hitting an average of £251,697, although prices fell month-on-month, with a 0.1% decline on January’s average. Property values were 0.5% higher in the December to February quarter than in the September to November quarter. Meanwhile, Halifax managing director Russell Galley said the new mortgage guarantee scheme will help buyers by increasing the availability of loans requiring a 5% deposit, adding that “raising a deposit continues to be the single biggest hurdle for first-time buyers to overcome." Andrew Asaam, mortgages director for Lloyds, said issues around deposits remain “the biggest struggle” for those trying to get on the ladder.
Duty holiday extension could drive prices up
House prices are expected to hit record highs after the Chancellor announced an extension of the stamp duty holiday. With the cut-off pushed back from the end of this month to the end of June and the threshold tapered until September, Rightmove predicts the move will save an additional 300,000 home buyers up to £15,000 each. While the current stamp duty holiday has helped push house prices to a record high, the extension is likely to drive further increases. Office for National Statistics data show that prices rose 8.5% to an average of £252,000 last year. The Office for Budget Responsibility says 2021 could see a 5% climb, having increased its November forecast of 3.5%.
Landlords shrug off corporation tax increase
Buy-to-let experts do not expect landlords holding properties via company structures to change ownership arrangements despite the Chancellor's decision to increase the corporation tax rate.
Frasers hits out at rate relief cap
Frasers Group, the owner of Sports Direct and House of Fraser, has warned it could be forced to close stores because of a limit to business rates relief introduced in the Budget. The Chancellor announced that a rates holiday will run until June 30 and then charges will be reduced to a third until March 2022. However, Frasers said that with relief capped at £2m, the support measure is “near-worthless” for retailers with lots of stores. It said it will have to review its portfolio to “ascertain stores that are unviable due to unrealistic business rates”, adding that the cap would make it “nearly impossible” to take on empty Debenhams sites.
Kwarteng: Strong growth could shift tax plan
Business Secretary Kwasi Kwarteng says the economy is on track for recovery, saying he is "bullish" about the country's economic prospects. When asked by the Times if he thought the plan to increase corporation tax from 19% to 25% in 2023 would come to fruition, he said: “You could have strong growth. And clearly, if the growth is very strong the fiscal situation can change very quickly. 2023 is a long time away.” He added: “Two years can change everything. If there are very strong tax receipts, who knows what the taxation rate will be?"
Chancellor to be quizzed on small firms’ debt
The Treasury Select Committee will this week ask Rishi Sunak how he expects small firms to repay debt taken on in the pandemic, with MPs to ask the Chancellor about the risk the issue poses to the economy. Committee chairman Mel Stride has warned: “The issue of debt recovery among small firms is particularly important because, if it goes wrong, vast waves of companies are going to go under.”