HSBC betting on East over West
HSBC’s entanglement in China’s move to end Hong Kong’s autonomy continues to scar its reputation after US secretary of state Mike Pompeo followed Aviva Investors and a raft of UK politicians in criticising the bank for supporting Beijing’s new security law. The Times’ Alistair Osborne says the last 18-months has been a shambles for chairman Mark Tucker, who now finds himself “at the head of a bank that's antagonised Britain, where it's headquartered, and the United States, in whose currency it reports, while inviting a customer boycott by prostrating itself before Beijing. He'll need all his experience to navigate through this.”
British Business Bank names CEO
Catherine Lewis La Torre has been declared the interim chief executive of the British Business Bank, taking over from the current head, Keith Morgan, in September. The Mail’s Alex Brummer suggests the change in leadership smacks of a lack of satisfaction in Morgan’s performance during the COVID-19 pandemic.
Bank of England bond-buying programme to be boosted
A further £100bn for the Bank of England’s bond-buying programme is expected to be announced next week. Cathal Kennedy of RBC Capital Markets predicted a rise of £200bn, arguing that this would conform to the BoE’s history of buying more bonds than the government is planning to sell.
Haldane reappointed to MPC
The Bank of England’s chief economist and executive director for monetary analysis and statistics, Andy Haldane, has been reappointed to a further three-year term on the BoE's Monetary Policy Committee.
Cerberus calls for shake-up at Commerzbank to stop ‘downward spiral’
Private equity firm Cerberus, the second-largest shareholder in Commerzbank, has criticised the lender’s leadership and urged “swift and decisive action now” to stop a “downward spiral” at the bank.
Danske Bank facing criminal complaint over ‘wash trades’
A criminal complaint has been filed against Danske Bank over alleged violations of market abuse regulations, with the country’s Financial Supervisory Authority (FSA) stating that the lender had facilitated so-called "wash trades", in which the same person sells and buys securities.
Deutsche Bank warns bad loan provisions set to reach 11-year high
Deutsche Bank has warned that its provisions for bad loans in this quarter will reach €800m as the coronavirus leaves the global economy mired in recession.
EU urged to tackle insolvency laws for unified capital market
An official expert group has urged Brussels to reform the EU’s fragmented insolvency laws and create more uniform shareholder rights in order to deepen its capital markets.
Ellesmere Port to remain closed until September
Vauxhall has said that its Ellesmere Port plant in Cheshire will remain shut until at least September. However, the firm will move 250 Ellesmere Port employees to the firm's Luton van factory where production is being ramped up.
26,000 Lufthansa employees at risk
Up to 26,000 Lufthansa employees could be made redundant – a significant jump on the 10,000 the German carrier previously said would go. The airline has promised a wide-ranging restructuring as it seeks to pay down a €9bn state bailout and plot a path through the coronavirus pandemic.
Wizz Air awards management with share options
Wizz Air management are facing criticism after they were awarded share options potentially worth millions of pounds despite the airline making 1,000 staff redundant, using the government’s furlough scheme and borrowing hundreds of millions from the Bank of England’s emergency funding scheme.
Barnier wants end to City’s financial and legal services dominance
The EU’s chief Brexit negotiator has said London should lose its status as a European centre for financial and legal services after Brexit. Michel Barnier told representatives of the European Economic and Social Committee that the UK should not be allowed to become a stepping stone into the EU market or a manufacturing hub for the bloc after the end of the transition period this year.
LEISURE & HOSPITALITY
Whitbread in £1bn rights issue
Whitbread has pulled off a £1bn rights issue underwritten by JP Morgan Cazenove and Morgan Stanley. Whitbread is aiming to raise cash to cover income lost while its hotels and pubs remain closed.
Restaurant Group in cost-cutting move as 125 sites shut
Some 125 sites operated by the Restaurant Group are to close with around 3,000 jobs affected. The Italian-American-themed Frankie & Benny’s chain will be most severely affected by the move.
MEDIA & ENTERTAINMENT
News UK launches costs review
News UK has warned staff that job losses are likely in the coming months as the newspaper publisher struggles to combat declining print advertising and sales. Enders Analysis, the media specialists, have forecast that the news industry will lose a £1bn in revenue to the pandemic.
Dennis Publishing UK staff in redundancy consultation
Dennis Publishing has begun a redundancy consultation process with 122 of its UK staff, which number around 480. About half of those involved in the consultation expected to lose their jobs.
UK house prices hit 10-year low in May
British house prices were at a 10-year low in May, according to a survey by The Royal Institution of Chartered Surveyors (Rics), but there are signs that confidence is returning to the market after the government lifted its coronavirus lockdown for buyers and sellers in England. Rics said its headline house price balance slumped to -32% in May, its lowest since 2010, from -22% in April. But expectations for house prices in 12 months were less negative than a month earlier and new buyer enquiries recovered from a record low of -94% in April to -5% in May.
Ocado aims to raise £1bn to profit on online deliveries boom
Ocado aims to raise over £1bn from investors as it looks to capitalise on a drastic change in shopping habits as online grocery sales prove popular in the wake of the coronavirus crisis. Ocado aims to raise £657m in an equity share placing with institutional and retail investors, as well as borrowing £350m via a convertible bond issue. The online grocer plans to use the investment to expand both its own internet sales operation and the production of robot factories for supermarkets worldwide to capitalise on surging demand for home deliveries.
Premier League faces £1bn virus loss
Premier League clubs are set for a loss of £1bn in revenue in their 2019-20 accounts owing to the coronavirus pandemic, according to new research. Top-flight sides will face a permanent loss of £500m due to rebates to broadcasters and the loss of matchday revenue. A further £500m will be deferred and recouped in 2020-21 if the competition is able to complete this season and next.
OECD issues UK warning on economy
The Organisation for Economic Cooperation and Development (OECD) has cautioned that the UK will suffer the largest economic effect from the coronavirus crisis among major nations this year, with the economy at risk of contracting between 11.5% and 14%. OECD chief economist Laurence Boone stated: “By the end of 2021, the loss of income exceeds that of any previous recession over the last 100 years outside wartime, with dire and long-lasting consequences for people, firms and governments. As long as no vaccine or treatment is widely available, policymakers around the world will continue to walk on a tightrope.”
CBI appoints business productivity chief as next director-general
Dame Carolyn Fairbairn will hand over as director-general of the CBI to Tony Danker at the end of the year. Mr Danker is CEO of Be the Business, a charity working with businesses to boost UK productivity, and a former McKinsey consultant. Speaking with the BBC, Dame Carolyn warned that the “resilience of British business is absolutely on the floor” and they couldn’t cope with a no-deal Brexit as well as recovering from the coronavirus.