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Daily News Roundup: Monday, 8th October 2018

Posted: 8th October 2018

BANKING

Horta-Osorio: Curbs on banks have gone too far

Antonio Horta-Osorio, the CEO of Lloyds Banking Group, has suggested that Britain’s financial sector is now too over-regulated, having been badly policed in the years’ up to the financial crisis. In an interview with the Sunday Times, he said: “I think that in life, when you have excesses in one direction, normally to correct, you go a bit too much in the other direction - like a pendulum. Sometimes the pendulum goes further in the other direction before it comes to the middle. In aggregate, I would think that has happened in the UK.” He also apologises for the scandal at the Reading office of HBOS in the piece, and says his “total focus” was on helping SMEs. He also notes that the bank has devised a programme to help Lloyds staff “improve mental and physical resilience”. It will be offered to all 75,000 employees in due course.

Barclays embroiled in credit scandal

An investigation by the Telegraph has claimed that Barclays’ consumer lending arm, Barclays Partner Finance, failed to stop customers at high street retailers being pressured into taking out loans they may not have been able to afford as recently as 2016. The FCA has ordered Barclays to change its practices, while the bank has agreed to compensate mis-selling victims as part of a review of its loan book.

Citi plans to launch new UK bank

Citigroup is planning to set up a new British bank, headquartered in London, to house its UK consumer business after Brexit. The US bank said the business, previously run via Citibank Europe plc, would be transferred to the new bank by March 2019 subject to approvals from regulators.

RBS will need time to rebuild its name

RBS CEO Ross McEwan has said that the bank will need more than a decade to rebuild its tarnished operation. Speaking on the tenth anniversary of RBS being given government bail-outs, he said the bank had paid a heavy price for the mistakes made by its previous management.

Julius Baer benefiting from wealth creation

Swiss private bank Julius Baer has said that Brexit is not a long-term threat to its business and it is benefitting from the steady growth of wealth creation in the UK. Growth was supported by Julius Baer's decision to open regional UK offices for the first time earlier this year in Manchester and Leeds, as well as a regional head office in Edinburgh.

US banks tighten grip on M&A

Figures from Dealogic have shown that US banks are tightening their grip on dealmaking in the City of London as Europe’s banks continue to miss out on a flurry of takeovers.

HSBC hires former head of Goldman Sachs’ Canadian arm

HSBC has hired Peter Enns as head of its financial institutions group in London. He joins the bank from Goldman Sachs, where he spent 21 years, most recently as chairman and chief executive of the bank's Canadian unit.

Icesave crash won’t be repeated

Mark Sismey-Durrant, the former boss of collapsed bank Icesave, has said a similar collapse could not happen today because of changes to banking regulations.

Savers report problems at Marcus

The Sunday Times reports that savers have reported problems opening new accounts at Goldman Sachs’ bank Marcus.

ECB warns banks on post-Brexit UK operations

The European Central Bank has warned lenders they will have three years after Britain leaves the EU to stop using a "back-to-back" booking model to retain staff and capital here.

‘Bank of Dave’ seeking £2.5m and regulatory approval

Entrepreneur Dave Fishwick is hoping to raise £2.5m as he seeks regulatory approval for the expansion of Burnley Savings and Loans.

PRIVATE EQUITY

Moulton regrets launching fund

Private equity veteran Jon Moulton is interviewed in the Mail. In the piece, Mr Moulton reveals that his last Better Capital fund – launched in 2012 – has estimated losses of more than £140m, caused by the troubles of City Link, Jaeger and double-glazing firm Everest.

TA Associates seeks European acquisitions

TA Associates has taken a stake in £34.6bn fund company Merian Global Investors, which was spun out of Old Mutual Global Investors, and is on the lookout for more acquisitions.

Mobeus invests in call-centre firm Ventrica

Private equity firm Mobeus is investing £9m in Essex call-centre specialist Ventrica.

INTERNATIONAL

JP Morgan to settle allegations of violating sanctions

The US Treasury has said that JP Morgan has agreed to pay $5.3m to settle allegations it violated Cuban Assets Control Regulations, Iranian sanctions and Weapons of Mass Destruction sanctions 87 times.

Coding lessons for JPMorgan analysts

Hundreds of new investment bankers and asset managers at JPMorgan Chase are being given mandatory coding lessons under a new pilot scheme.

First female Saudi bank head appointed

Lubna Al-Olayan has become the first woman appointed to run a Saudi Arabian bank, and will lead a new lender formed after a merger between Alawwal Bank and Saudi British Bank.

AUTOMOTIVE

Toyota car fault prompts recall

Toyota has announced a recall of more than 2.4m hybrid vehicles worldwide because of a fault in their systems that could cause them to lose power.

AVIATION

EU drafts tough contingency plans for no-deal Brexit

The FT reveals that the European Commission is planning to introduce tough contingency measures for a no-deal Brexit which could lead to disruption to UK flights and exports.

CONSTRUCTION

Housebuilder lined up for float

Hedge funds Alchemy Special Opportunities, Angelo Gordon and Avenue Capital are lining up Avant Homes for a potential sale or flotation, according to the Sunday Times.

FINANCIAL SERVICES

Oversized financial sector hurting UK

A paper from The Sheffield Political Economy Research Institute has suggested that the UK has lost out on £4.5trn over the course of two decades because of an oversized financial sector. The researchers concluded that the City of London has damaged economic growth by sucking talent and investment from other productive uses such as manufacturing and research, while it has also inflated asset prices, particularly property.

Former Schroders executive criticises float advisers

Former Schroders UK equities chief Richard Buxton, who now runs asset management group Merian, has called for fewer investment banks to be involved in flotations so as to reduce the favouring of opportunist investors.

Lloyds and Schroders tie-up in sight

Lloyds Banking Group is close to reaching a deal under which its £13bn wealth management unit would join forces with investment firm Schroders.

Lloyd's boss hints at 'acceleration' of Brussels operation

Lloyd’s of London’s chief executive has said the insurance business is speeding up plans to bolster its Brussels subsidiary unit amid fears of a no-deal Brexit. Dame Inga Beale told the BBC that she was “accelerating” preparations to transfer contracts from the London insurance market to Brussels on the back of growing fears that “we might be closer to a no-deal than we were”.

Africa-Asia renewables investment for Blackstone

Blackstone is to launch a standalone company for investing in renewable power assets in the Middle East and north Africa.

Asset managers accounting for bulk of Irish Brexit moves

IDA Ireland, the Irish state agency looking to win foreign business, has said that asset management and investment firms make up about half of the more than 100 finance companies that have set up or extend operations in Ireland as a result of Brexit.

Daily Mail Reuters

£9bn pulled from UK company funds since Brexit vote

According to figures from the Investment Association, UK investors have pulled nearly £9bn from funds investing in British companies since the EU referendum.

Fund managers investigated over fees

The FCA has launched an investigation into 34 pension and investment companies for failing to disclose the true cost of their funds.

Flint tipped to lead Standard Life Aberdeen

Sir Douglas Flint, the former chairman of HSBC, has been approached to lead the board at Standard Life Aberdeen, according to the Sunday Times.

Tempcover plots expansion

Pay-as-you-go insurer Tempcover is looking at moving into travel and pet insurance. Founder Alan Inskip said that the insurer is looking at acquisitions as it seeks to accelerate its growth.

HEALTHCARE

Terra Firma seeks to offload care homes

Terra Firma has put 24 lucrative care homes which are the subject of a legal dispute up for sale for £225m.

MANUFACTURING

UK manufacturers pulling back on investment plans

A report from the EEF and Santander has warned that British manufacturers are pulling back on their investment plans due to mounting uncertainty about Brexit and fears of a global trade war.

Packaging manufacturer shelves factory plans

Smurfit Kappa, Europe’s largest cardboard box and packaging manufacturer, has opted against plans for a £50m plant in Britain, warning that Brexit poses a “real risk” to jobs.

REAL ESTATE

House price growth slump in September

UK house prices saw their biggest fall in five months in September, while price increases compared to the same period in 2017 slowed to a three-month low. Latest figures from Halifax show house price inflation dropped to a 2.5% rise in the year to the end of September from 3.7% in August, with the average home costing £225,995, down from £229,284 last month – a month-on-month drop of 1.4%.

RETAIL

Unilever decision forces Dutch government to review controversial tax break

Unilever has abandoned plans to scrap its dual-listed structure and move its headquarters to the Netherlands, following intense investor pressure to remain in the UK from shareholders.

ECONOMY

Interest rates could reach 1% by February

Economists have suggested that interest rates could rise to 1% by February as strong economic data prompts the Bank of England to act before Brexit.

OTHER

Banking app helps cure addiction

The BBC profiles how banking apps from Monzo and Starling are helping customers to cope with gambling addictions.

Fraud reports dismissed by banks’ algorithms

Figures released by the Home Office show that more than 450,000 reported bank frauds over the past three years have been dismissed by banks’ automated systems.

Legal minds Charter aims to ease stress for lawyers

The Mindful Business charter, created by Barclays and law firms Addleshaw Goddard and Pinsent Masons, is to launch this week.

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