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Daily News Roundup: Monday 9th April 2018

Posted: 9th April 2018

BANKING

Bank account incomes see 16% drop due to low interest rates

Research from easyMoney shows that British savers' income from bank accounts decreased by 16% in a year because of low interest rates from lenders. Andrew de Candole, CEO of easyMoney, commented: “Savers are increasingly fed up with seeing their money just sitting doing nothing in bank accounts. It's easy to see why: these figures show that savings accounts' and cash ISAs' performance has been getting worse. With inflation eating away at values, the reality is there's very little incentive to save through these traditional routes. For many people the time has come to take action. Investors need products that offer real returns, and many are prepared to accept a sensible, calculated increase in risk in order to achieve this.”

Banks forbid lodgements from family members

Santander, Nationwide and Barclays are among lenders implementing new rules which forbid cash lodgements being made in branch by persons other than the account holder. Banks have explained the move as part of a drive to stop criminal gangs laundering cash through bank accounts, but critics have called it a cynical attempt to cut costs by forcing customers to bank online. MP John Mann of the Treasury select committee commented: “This doesn't seem to be about money laundering, this seems to be a money-making opportunity for the banks, who feel that the cost of handling small amounts is too great.”

Barclays plans to split euro trading hub over Brexit

Barclays is preparing to split its euro rates trading team to ensure it can continue to work with European clients after Brexit. Meanwhile, German officials have declared that almost 20 lenders plan to launch new hubs in Frankfurt as a result of Brexit.

HSBC to use artificial intelligence to tackle financial crime

HSBC is planning to integrate the artificial intelligence software of UK-based start-up Quantexa to more easily identify money laundering, fraud and terrorist funding.

US oligarchs blacklist fallout expected

Repercussions from the US government's issuing of sanctions on Oleg Deripaska and six other Russian ‘oligarchs’ could affect investment banks including Citigroup and Credit Suisse. City banks are expected to be forced to sever ties with Deripaska and the other named figures.

Co-op severs ties with bank and returns to profit

A year after the writedown of its stake in the Co-op Bank dragged the Co-operative Group to a loss, the company posted a pre-tax profit of £72m for 2017 after "improving business performance" and reducing costs. Underlying profits increased 25% to £65m despite flat revenues of £9.5bn.

PRIVATE EQUITY

Sky raises money for Ocean project

Sky is reportedly close to securing outside investment for its £25m venture capital fund established to help reduce plastic pollution in the oceans. Sky Ocean Ventures group director Frederic Michel said an agreement, believed to be with a major US-owned broadcaster, should be in place before the end of this month.

Private equity investment causes divisions in Norway

The Norwegian government is wrestling with the prospect of allowing the country's $1tn oil fund to invest in private equity, with a final decision expected tomorrow.

INTERNATIONAL

Sewing favourite to be appointed Deutsche Bank chief executive

Reports claim that after a disagreement with Deutsche Bank chairman Paul Achleitner, chief executive John Cryan looks likely to be replaced by Christian Sewing, one of his deputies. It is believed that Mr Achleitner was frustrated over Mr Cryan's poor implementation of the bank’s cost-cutting strategy, among other issues.

Anbang gets $9.7bn bailout

The China Insurance Security Fund is to inject Rmb61bn ($9.7bn) into Anbang Insurance Group to tide it over until the firm can find new long-term investors.

SoftBank in Canadian mine deal

SoftBank has bought a minority holding in Canadian miner Nemaska Lithium, making its first investment in the key material for electric vehicle batteries.

AUTOMOTIVE

Aston Martin prepares for float

Aston Martin is expected to float with a £4bn stock market listing, and is preparing to hire Deutsche Bank, Goldman Sachs and JP Morgan as global co-ordinators, reports claim. The firm reported pre-tax profits of £87m for last year and record revenues of £876m.

FINANCIAL SERVICES

Rival suitors prepare offers for Fidessa

Fidessa is considering potentially better offers from rivals, as it stalls its vote on a £1.4bn takeover by Swiss group Temenos. The company, which made £50m in profits last year and saw revenues increase 7% to £353.9m, is based in the City but does most of its business outside Europe.

Fintech to make up for Brexit job loss - Bowman

Lord Mayor of London Charles Bowman has said that any London financial services jobs lost as a result of Brexit uncertainty will be more than compensated for by the fintech boom, commenting: "We've created something and stolen a march on global competition. If there are to be one or two jobs going because of Brexit, they're likely to be the jobs that won't be here in 5-10 years' time."

Mifid II grace period approaches end, worrying lenders

As a grace period following Mifid II regulations comes to an end, banks and brokers are preparing for a second round of negotiations with fund managers over investment research costs.

HEALTHCARE

Ideagen buys Medforce Technologies in $8.7m deal

Ideagen has bought US healthcare software firm Medforce Technologies for $8.7m (£6.2m). David Hornsby, Ideagen's chief executive, commented: “Medforce has established an extremely compelling value proposition and brings to the group a complementary solution offering a talented workforce and long-term customer relationships. This acquisition further strengthens our position in the US healthcare market”.

Healthcare services sale considered by Chai Patel

Healthcare tycoon Chai Patel is considering the £100m sale of Care Management Group, which provides support services to patients with learning and mental health difficulties. Private equity firm Bridgepoint has also hired NM Rothschild as it explores the sale of Care UK, a care provider for older patients with similar difficulties.

LEISURE AND HOSPITALITY

HNA considers sale of Hilton Worldwide stake

HNA Group has decided to sell its $6.5bn stake in Hilton Worldwide in part or in whole. The announcement was followed by heavy trading in the firm’s shares.

Float prepared for BrewDog

James Watt, co-founder of BrewDog, has said that following a substantial private equity investment, the beer brand is aiming for a stock market float, possibly by 2020.

MEDIA AND ENTERTAINMENT

Scottish tech start-up raises almost £6m

TVSquared, a Scottish start-up that measures the impact of television advertising, has raised nearly £6m in funding. The firm was backed by Hunter's West Coast Capital private equity fund alongside the Scottish Investment Bank and other investors.

REAL ESTATE

House price growth slows dramatically

Growth in house prices is slowing dramatically, with prices increasing by just 0.2% in March, according to data expected from Halifax. It is anticipated that the data will show house price growth halving from 0.4% in February, with the annual growth rate falling to 2.1% in March, compared to 3.8% for the same period in 2017.

RETAIL

Homebase bidders line up

Private equity groups Hilco, Endless and Lion Capital, as well as B&M, a value retailer, are said to be considering bids for DIY chain Homebase. Current owner Wesfarmers is reportedly keen to sell the business, two years after acquiring it from Home Retail in a £340m deal.

Conviviality brands sold

Conviviality brands Bargain Booze and Wine Rack are set to be sold to food wholesaler Bestway for £7m. The sale is expected to save 2,000 jobs at the chains. Last week the wholesale division of Conviviality was bought by C&C, the owner of Magners cider.

UK to agree deal with eBay and Amazon over tax evasion

HMRC is expected to strike an agreement with online marketplaces including Amazon and eBay that will give tax officials access to their data to combat VAT evasion by online retailers.

ECONOMY

City fears UK 2018 economy will be worse than other G7 countries

Almost three-quarters of financial firms surveyed have said they are concerned that economic growth in the UK will be weaker in 2018 than in any other advanced economy. Robina Barker-Bennett, head of financial institutions at Lloyds Bank, commented: “Fears about Brexit are looming large as the final countdown begins to March 2019, but our survey suggests that the UK economy will prove to be resilient and that it will come through the challenges of the next few months relatively unscathed. There is, however, a real risk that our growth will be slower this year than in all other advanced nations, and that we will fall to the back of the G7 pack.”

Productivity picks up

Productivity in Britain is rising at the fastest pace in more than a decade. Robert Jenrick, exchequer secretary to the Treasury, said output per hour rose by 0.7% in October to December compared with the previous three months. The figure for July to September was also revised up slightly to 1%. Together the two consecutive quarters showed the strongest rate of growth since 2005.

OTHER

Climate change risk to financial system - Carney

Governor of the Bank of England Mark Carney has warned that climate change could have a "catastrophic impact" on the financial system if firms fail to adequately disclose their vulnerabilities.

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