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Daily News Roundup: Thursday, 11th July 2019

Posted: 11th July 2019

BANKING

Fraud refund plan could mean charges on bank transfers

Consumers could be charged for bank transfers from January, under industry proposals to fund refunds for fraud victims. The Telegraph reports that a cross-industry group looking into the problem of "authorised push payment" fraud has told the payments operator it should levy an additional charge on online payments. Earlier this year it was reported that a charge of 2.5p, some of which could be passed on to consumers, had become a preferred option to fund compensation to victims who were not at fault. Detailed proposals for implementing this fee are now understood to have been submitted. If the proposed fix is implemented then banks would be billed an additional amount by Pay.UK, which runs the payments infrastructure, to pay into a compensation pot from January 2020. The required compensation pot is estimated at £40m a year, which would mean the charge would need to be roughly 2p per transaction for banks and building societies. While consumer experts said a direct charge on banks transfers would be unlikely, there is a risk some could indirectly charge customers by offering lower interest rates on savings or pushing up overdraft charges.

Banks must pay up for post offices, say MPs

MPs have said banks should be forced to pay for better services at post offices after years of branch closures. The Treasury Committee said lenders should pay for post offices to act as proxy branches, funding staff training and better security. However, the government has rejected the committee’s proposals to make banks fund new "shared hubs", saying it would be “inappropriate… to intervene in the commercial decisions of banks.”

Regulators to act on forgeries claim

The Financial Conduct Authority and the National Crime Agency have said they will investigate alleged bank signature forgeries. It comes after Treasury Committee chair Nicky Morgan asked the regulators to analyse claims that home repossessions and other documents may not have been signed by the authorised signatory.

Zopa boss talks P2P

An interview with Jaidev Janardana, chief executive of peer-to-peer lender Zopa, covers the choppy waters of the P2P industry. While acknowledging the recent failures of Collateral UK and Lendy, along with the Financial Conduct Authority's tougher regulations, Mr Janardana suggests that the bank lobby is “trying to put fintech in a box”.

PRIVATE EQUITY

VC executive diversity flat since 2017

The number of women in senior leadership positions at venture capital (VC) firms in the UK has failed to increase in two years according to data compiled by Diversity VC. It found growth in the representation of women at senior levels remained flat at 13% this year compared to 2017.

INTERNATIONAL

ECA says European banking stress tests are too soft

The European Court of Auditors (ECA) has warned that stress tests designed to assess the health of European banks have not taken some systemic risks into account. A report by the ECA highlights “shortcomings for assessing resilience against systemic risk” in the stress tests carried out by the European Banking Authority, raising questions over the risk-assessment measures that the body uses.

Fed boss hints at rate cut

Federal Reserve chairman Jerome Powell has hinted at an imminent interest rate cut. He said that uncertainty around Brexit, international trade tensions, weak global growth and subdued inflation risked dampening the US economy. Mr Powell also brushed off criticism from Donald Trump, saying he would not step down if the US president asked him to.

Critics round on Deutsche Bank for generous golden parachutes

Deutsche Bank has come in for criticism for spending more than €52m on severance pay for senior executives who were fired or left voluntarily over the past 14 months.

Bezos-backed Remitly raises $135m for expansion in remittances

Remitly, a US fintech backed by Amazon founder Jeff Bezos, has raised $135m at a valuation of nearly $1bn, weeks after Facebook launched an assault on its core business.

AUTOMOTIVE

JLR sales slide

Jaguar Land Rover’s global sales fell 11.6% to 128,615 vehicles in the three months to June 30 compared with the same period last year. Sales of Land Rover, which represents about 70% of the UK carmaker’s output, sank 12.1% to 80,075 cars.

CONSTRUCTION

Barratt on track for record performance

Barratt Homes is on track for another year of record profits. The housebuilder put up 17,856 homes in the year to June, marking a 1.6% rise in completions, and expects to make pre-tax profits of about £910m, up from £834m last year and well above City forecasts of £884m.

FINANCIAL SERVICES

Woodford lifts block on investors switching from HL

Investors who found themselves locked into both Neil Woodford’s suspended fund and Hargreaves Lansdown can now transfer to a rival stockbroker, after Link Fund Solutions and Woodford confirmed the block has been lifted with immediate effect. Earlier this week Richard Wilson, chief executive of Interactive Investor, branded the block on transfers “unacceptable”. Following the lifting of the block yesterday a spokesperson for Hargreaves Lansdown said: “We’re pleased that Woodford and Link have finally agreed to our numerous requests to allow investors to transfer all WEI share classes between platforms.”

Hedge funds change tack on fee model

A survey by the Alternative Investment Management Association (Aima) shows hedge funds are no longer using the ‘2 and 20’ fee model – a fixed 2% management fee and a 20% performance fee – as the standard payment structure. The fees model had come under increasing fire from politicians and investors, who have been putting pressure on private equity mangers to provide better value for money by slashing their fees and improving their performances. According to Aima, hedge fund managers are now reporting a new average management fee of 1.3% of assets under management and 1.4% for new funds launched in the past 12 months.

Swiss Re considers pulling £3bn UK life insurance IPO

Swiss Re is considering postponing the £3bn flotation of its UK life insurance business ReAssure, in response to weak demand from investors.

Norwegian insurer Protector warns of loss after Grenfell ruling

Norwegian insurer Protector is facing a second-quarter loss after losing an arbitration dispute with Munich Re linked to the Grenfell fire in London in 2017.

HEALTHCARE

Macquarie drops £2.5bn care home deal over Brexit concerns

Australian infrastructure bank Macquarie has pulled out of a £2.5bn deal to buy the UK’s Barchester Healthcare care home chain, citing Brexit uncertainty.

LEISURE AND HOSPITALITY

Wetherspoon sales losing their fizz

JD Wetherspoon is expecting slower like-for-like sales growth this summer (6.9%), down from the previous quarter’s 7.6% growth rate. Total sales grew 6.6% in Wetherspoon’s latest quarter however, the firm said in a trading update, and are up 7.4% for the year to the end of July.

Heineken pubs arm faces landmark 'beer tie' probe

Heineken’s pubs and bars business is to be investigated for allegedly imposing unfair trading terms on some of its publicans. Pubs code adjudicator Paul Newby said that it would examine how Star Pubs & Bars had treated tenants who wanted to go “free of tie”.

PROFESSIONAL SERVICES

Brexit fears cost Michael Page

City executives staying put in their roles over the continued Brexit uncertainty cost headhunter Michael Page in its last quarter. The recruiter, a division of PageGroup, said fears over the October deadline had given many senior executives cold feet, meaning UK fees for Michael Page fell 6% and UK gross profit in the UK, which accounts for 16% of the group, dropped 2.4% to £35m.

REAL ESTATE

Survey show first rise in home sales for two years

A monthly survey of estate agents by the Royal Institution of Chartered Surveyors reveals the number of newly agreed residential sales has increased for the first time since February 2017. The survey polled more than 300 estate agents in more than 600 branches last month. For the first time since November 2016, the survey indicated a rise in new buyer inquiries at a national level, while the volume of new instructions was higher for the first time in a year. The majority of the estate agents surveyed also expect the number of agreed sales to rise over the next year.

RETAIL

Superdry suffers £85m loss

Fashion retailer Superdry made losses of £85.4m for the year to April, from profits of £65.3m the year before. It also warned sales would continue to falter before the business starts showing any signs of revival under co-founder Julian Dunkerton, who returned to the retailer in April.

ECONOMY

UK economy returns to growth

The UK economy grew by 0.3% in the three months to the end of May, according to the Office for National Statistics (ONS). Manufacturing rebounded by 1.4% in May compared to a 4.2% drop the previous month. However, the National Institute of Economic and Social Research said it still expected a fall in GDP of 0.1% in the three months to June as Brexit-related uncertainty takes its toll.

OTHER

Dingemans named as preferred candidate to chair FRC

Simon Dingemans, former head of European M&A at Goldman Sachs, has been named as the government’s preferred candidate to the post of Chair of the Financial Reporting Council.

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