BANKING
Banks lobby to water down net zero targets
As banks and asset managers were congratulated at the COP26 climate conference for committing to transform the economy to net zero, lenders were lobbying in the background to weaken commitments. The Net-Zero Banking Alliance (NZBA) brings together more than 90 banks, requiring them to set a target to cut carbon emissions from their lending and investment portfolios to net zero by 2050, with an interim target for 2030. However, an investigation by the Bureau of Investigative Journalism uncovered an email from the office of Noel Quinn, HSBC’s chief executive, which the bank says was sent on behalf of the Financial Services Taskforce, which includes Bank of America, JP Morgan and Barclays, calling for a requirement for science-based targets to be dropped, for a list of sectors to be included in initial targets to be removed and for banks to have three years from signing the commitment - not 18 months - before setting their 2030 target. The Times notes that the NZBA did not accede to the lobbying requests.
Co-op Bank still on hunt for acquisition
Co-op Bank CEO Nick Slape said on Friday the bank was still on the look out for merger deals a week after an approach for TSB was rebuffed by its Spanish owner Banco de Sabadell. Mr Slape said: "Nobody wants to be acquired and sit on the other side of the table, we'd much rather play the consolidator. It makes perfect sense to consolidate and bulk up." It came as the lender revealed it made a £28.5m profit for the nine months to September, up from a £68.1m loss for the same period a year ago, putting it on track to make its first annual profit in a decade.
Regulator refuses to name banks handling fraudulent funds
The Payment Systems Regulator has refused a request by the Times to divulge which UK banks handle the highest volume of fraudulent funds, arguing that to do so would persuade customers to move to rival firms. The regulator also said the information could cause fraudsters to target banks without confirmation of payee. It concluded that the “balance of the public interest is in favour of not disclosing”.
UK lenders begin to raise mortgage rates despite BoE decision
Despite the decision by the Bank of England to hold interest rates at 0.1%, banks and building societies have further narrowed their low interest rate mortgage offerings. However, while there are no longer three- and five-year mortgages for sale at interest rates below 1%, borrowers with large deposits still
have a large choice of loans priced at less than 2%.
Starling Bank matures from digital upstart to mainstream lender
Only two years ago Starling had just £115,000 of business loans on its books. But thanks to the coronavirus business loans schemes, Starling has now facilitated £2.2bn of business loans to more than 40,000 customers.
HSBC launches Green SME Fund
HSBC has announced the launch of a £500m Green SME Fund as part of its commitment to support businesses to transition and thrive in a low-carbon economy. Eligible businesses must have a turnover of less than £25m and will be offered 1% cashback on loans.
Staley’s departure from Barclays reminds CEOs not to believe their own hype
Reflecting on Jes Staley’s departure from Barclays over his links with Jeffery Epstein, the FT’s Brooke Masters says bank CEOs need strong executives to remind them of the consequences of poor decision-making.
PRIVATE EQUITY
Carlyle makes £1.5bn Link bid
American private equity group Carlyle has made a bid for pension and funds administrator Link Group. News of the move came just hours after Metro Bank revealed that it too had received an offer from Carlyle.
Coast works to block Blue Prism takeover
Activist investor Coast Capital says it is in talks with 30% of Blue Prism investors over plans to block a takeover of the British software company by US buyout firm Vista. Coast's founder James Rasteh said in a recent letter to the company that the deal was facing "increasing resistance by a critical mass of investors".
INTERNATIONAL
State Street staff need approval to hire white men
State Street will now require a diverse panel of leaders to ensure women and ethnic-minority candidates had been interviewed when hiring middle-ranking staff - those at senior vice-president level or above. Jess McNicholas, the bank’s head of inclusion, diversity and corporate citizenship in London, said the company would still hire white men but that recruiters would need to demonstrate that a diverse range of applicants had been interviewed. The Boston-based investment bank aims to triple the number of black, Asian and other minority staff in top roles by 2023.
Credit Suisse chairman says investors support overhaul plans
Antonio Horta-Osorio, the chairman of Credit Suisse, has said the bank’s largest investors are supportive of its new strategy. Last week, the lender revealed sweeping restructuring plans including paring back its investment bank activities after it suffered multibillion losses this year.
BNY Mellon cuts ties with controversial Adani coal mine
BNY Mellon has cut ties with Adani Group, the Indian conglomerate that is developing the Carmichael mining project in Queensland, Australia. The bank said the business is “not aligned with our ESG principles.”
AUTOMOTIVE
Battery recycler plans IPO
Technology Minerals, a UK firm developing technology to recycle, recover and re-use electric car batteries on an industrial scale, is planning to list on the London Stock Exchange in the coming weeks.
AVIATION
IAG warns of approaching £3bn annual loss
British Airways owner International Consolidated Airlines Group will plunge to losses of €3bn this year, despite a “significant recovery” being underway. CEO Luis Gallego went on to say: “The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry.”
Wizz Air in push to challenge Ryanair
Indigo Partners, the private equity firm backed by Singapore’s state investment fund Temasek, is backing a plan by Wizz Air to triple its fleet by 2030 to 500 aircraft as the airline seeks to challenge Ryanair and easyJet.
FINANCIAL SERVICES
Abrdn in talks to buy Interactive Investor
Abrdn is in talks to buy Interactive Investor for more than £1.5bn, Sky News reveals, in a deal that will hand the FTSE-100 asset manager control of one of Britain’s three big DIY stock-picking platforms. If abrdn successfully acquires Interactive Investor it will deliver on the ambition of CEO Stephen Bird to diversify its revenue base across three areas: investment, adviser and personal.
Hartigan defends selling LV to private equity
In an interview with the Mail on Sunday, LV boss Mark Hartigan defends the decision to sell to private equity firm Bain Capital, arguing that it was the only way to grow the business. He offers assurances that Bain will not be involved in running the businesses and says he hopes to stay on after the deal is completed as he’s “emotionally attached to the outcome”.
Finance bosses urged to put purpose beside profit
A coalition of Certified B Corporations have written to international financial services firms calling on them to rewrite their corporate governance rules to bind them to putting purpose beside profit. "Tackling the world's greatest challenges requires change at the top now, " said Sophie Kennedy, chief executive at EQ Investors, which co-chairs the B Corp Finance Coalition. "Only with the right governance structures can ambitions such as net zero realistically be delivered.”
HEALTHCARE
Pfizer’s Covid antiviral pill a “game-changer”
A pill developed by Pfizer to treat Covid cuts the risk of hospitalisation or death by 89% in vulnerable adults, clinical trial results suggest. Pfizer’s chief executive Albert Bourla said the trial results were “a real game-changer in the global efforts to halt the devastation of this pandemic”.
LEISURE & HOSPITALITY
Yo! Sushi owner pauses flotation plans
Snowfox Group, the owner of Yo! Sushi, has paused plans for a £750m stock market listing amid growing unease among investors. The company, which also controls Bento and Taiko, had appointed bankers at Numis to advise on a flotation, which was expected imminently. But heightened market volatility has put the brakes on its plans.
REAL ESTATE
House prices hit new high
The average house price topped £270,000 for the first time in October, according to the Halifax house price index. The introduction of the stamp duty relief last year helped to boost the market, and since then we’ve seen a shortage of building supplies and the rapid sale of new builds add to price pressures.
BoE warns lenders over cladding crisis
The Bank of England is asking lenders to ring-fence more cash amid fears leaseholders facing insurmountable cladding costs could default on their mortgages. Banks are struggling to work out how many flats with unsafe cladding are on their books due to insufficient data.
RETAIL
Retailers and landlords face new arbitration rules
A new arbitration code designed to ease pressure on the courts would require retailers and their landlords to enter into negotiations to resolve disputes. This could mean struggling tenants are forced to remain a tenant for longer than initially agreed. The rules will give extra protection to commercially viable businesses, meaning they will not be expected to take on debt, restructure or make redundancies to pay off rental debts. They are being drawn up by the Department for Levelling Up to avoid legal disputes after many retailers withheld payments during the pandemic.
ECONOMY
Bailey: Green policies will lead to 'permanently' higher energy bills
The Governor of the Bank of England has warned that the move away from coal could lead to a permanent rise in energy bills for UK households. Andrew Bailey told BBC’s Today programme on Friday that the move away from fossil fuels may well result in “a level change in prices” for consumers. This comes as the Bank predicts inflation will hit 5% next spring and a 35% increase in gas prices by next April.
Bank of England to refocus corporate bonds on greener companies
The Bank of England has set out plans to refocus its £20bn holdings of corporate bonds on greener companies. In future, companies would need to meet climate-related criteria for their bonds to be included in the central bank’s asset purchase programme.