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Daily News Roundup: Thursday 11th April 2019

Posted: 11th April 2019


Staley sets sights on Bramson

Barclays boss Jes Staley has said Ed Bramson’s attempts to get on the bank’s board makes no sense, as the activist investor effectively holds a £500m short position against the lender. Speaking on CNBC, Mr Staley said Bramson, who has a 5.51% stake in Barclays through his fund Sherborne Investors, did not have the bank’s best interests at heart. Meanwhile, the FT claims that the former head of Barclays’ investment bank, Tim Throsby, was ousted after clashing with Mr Staley over the CEO’s “sacrosanct” profitability targets.

Nationwide enters equity release market

Nationwide has become the first high street lender to enter the equity release and retirement interest-only (Rio) loans markets, enabling existing customers to access cash through their properties. The high street lender's equity release rates will start from 3.49% and it will charge a 6% exit penalty for the first five years, tapering to 0% after year 16 of the plan. Leeds Building Society has up until now been the largest provider to offer such loans and round £4bn was withdrawn last year by older homeowners.

Banking inquiry begins

The Welsh Assembly's Economy, Infrastructure and Skills Committee has begun an inquiry into access to banking, considering the extent that bank closures are hitting rural communities.


Nuclear fund to invest in British businesses

The Nuclear Liabilities Fund is set to invest £250m alongside British Patient Capital (BCP), which is a subsidiary of the British Business Bank, to target innovative UK businesses. BPC plans to invest £2.5bn in venture and growth capital over the next decade as it looks to address the funding gap at the scale-up stage.

Venture capital investment remains steady

A new report has revealed that venture capital investment into UK start-ups over the first three months of 2019 was around the same level as last year. In total more than £1.2bn has been invested since the start of the year across 161 deals. Fintech, biotech and healthtech were the most popular sectors for venture capital firms.


Law breaking banks must be reined in

Maxine Waters, the Democrat chairwoman of the House financial services committee, has said that America’s largest banks need to be reined in because of their “chronic lawbreaking”. Speaking at the start of a congressional hearing involving banking executives, she said that the banks were often “too big to care about the harm they have caused” and too big to manage their own operations. The hearing, entitled “holding megabucks accountable”, was the first opportunity for Democrats to question the bosses of the largest US banks since the party took control of the House in last year's midterm elections.

N26 management structure under fire

Bafin, the German financial regulator, has criticised the management structure of fintech bank N26. Regulators found the firm had not adjusted its management structures to keep pace with its rapid growth, finding shortcomings in staffing, outsourced task management and engineering.

IMF warns of bailout risks

The IMF has warned that Italian and Portuguese banks could spark a rerun of the eurozone debt crisis if their sovereign credit ratings are downgraded.

ECB renews vow to hold rates steady until ‘at least’ end of 2019

The European Central Bank (ECB) has voted to maintain its quantitative easing programme and to hold record-low interest rates until at least the end of the year.


UK car production could halve in no-deal Brexit scenario

A study by Oxford University has found that car production in Britain could collapse by almost half by the mid-2020s in a no-deal Brexit scenario. According to the research, car production has fallen by about 9% since the EU referendum. Production volumes have fallen from 1.7m cars per year to less than 1.5m. However, the figure could drop to about 900,000 a year in 2026 if Britain leaves without a deal.


Boeing sued over 737 Max crashes

A proposed class action lawsuit against Boeing has been filed in a Chicago federal court which claims that the plane maker defrauded shareholders by allegedly hiding safety issues concerning its 737 Max plane - which recently led to two fatal crashes.


Watchdog warns insurers over value for money concerns

The Financial Conduct Authority has warned the insurance industry to tackle high commissions for middlemen - underlining one example of a 60% commission rate - as they are contributing to rip-off prices for consumers. Carphone Warehouse was recently fined £29m for mis-selling mobile phone insurance and Liberty Mutual Insurance Europe £5m for claims handling failures. The FCA’s Jonathan Davidson said there was a culture in some parts of general insurance “which pays insufficient regard to customer outcomes”.

City of London downbeat over EU market access after Brexit

Catherine McGuinness, chief executive of the City of London, has said that Britain’s financial services sector will not get any special access to the EU after Brexit. Britain has called for an “enhanced” version of the bloc’s equivalence system of market access for banks, insurers and brokers, that could distinguish it from other non-members of the bloc. However, Ms McGuinness said: “At the moment it looks as if we are going to have to start with third country equivalence and build on it.”

Fintech set to dominate payments

According to a report from Robert Walters and market analysis firm Vacancy Soft, half of all payment service providers will be digital only by next year, following a 51% rise in e-money firms between 2017 and 2018. Ollie Sexton at Robert Walters said: “The pace of change has been so rapid over the past five years that the perception of digital banking has shifted from an 'option' to a 'requirement.”

Network International IPO explodes

Payments firm Network International’s £2bn stock debut in London saw the middle east-focused firm's shares rise 25% to 544p after listing at 435p. Co-owner Emirates NBD made £555m from the listing and halved its stake to 26%.


Indivior suffers following US drug indictment update

The US Justice Department has charged UK-listed drug maker Indivior with using an illicit scheme to boost prescriptions of an opioid drug, leaving the firm vulnerable to a fine of up to $3bn.


Hollywood Bowl is on a roll with sales growth

Total revenue growth at Hollywood Bowl was 5.3% for the first half of the year, with like-for-like growth coming in at 4.4%. The ten-pin bowling outfit, which opened its 60th centre at the Intu Lakeside shopping centre in March, said its growth was driven by investment in new technology and rolling out fresh initiatives


House prices likely to keep falling

A survey by the Royal Institution of Chartered Surveyors has found that house prices are likely to continue falling for another six months across Britain. The figures are even gloomier in London and the south-east with prices expected to fall for the whole of 2019. A net balance of 24% of surveyors saw a decrease rather than an increase in house prices in March. This points to a “modest fall” in house prices at the national level over the next couple of quarters, Rics said.


Tesco profits jump ‘in uncertain market’

Tesco's revenues rose 11.2% to £63.9bn in the year to February 23rd. Overall like-for-like sales rose 2.9%, including a 1.7% rise at Tesco, and 11.1% for Booker. Margins rose to 3.45% overall, while cost savings of £532m brought total savings to date to £1.4bn – close to the £1.5bn it has targeted in its four-year turnaround plan.

Permira mulls sale of shoe brand

Permira is reportedly planning a sale or US flotation of British footwear brand Dr Martens.


Economy grows faster than expected

The Office for National Statistics has said GDP grew by 0.2% in February from a month earlier, confounding City economists’ expectations for zero growth as Brexit nears and the world economy slows. The 0.3% rise in the three months to February, was the same as the three months to January, after a previous estimate was revised higher. Output in production and manufacturing rose for the second month in a row, with manufacturing at its highest level since April 2008, the ONS said. The ONS added that production industries expanded by 0.2% in the three months to February 2019. This was the first positive three-month growth since October 2018.

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