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Daily News Roundup: Thursday, 11th October 2018

Posted: 11th October 2018

BANKING

Banks should not neglect social good 
Jayne-Anne Gadhia, the CEO of Virgin Money, has warned that banks will “get what they deserve” if they continue to prioritise shareholders over customers. Mrs Gadhia said regulation should go further to ensure that all stakeholders are treated equally, not only on an ethical basis, but for the health of the business. She added: “It’s super-important to get the balance right between all stakeholders – shareholders, customers, staff, and communities – and I think, if we can do that, if business can always do that, we can create a better society.”

Increase in demand for ethical firms
Joe McGrath, Barclays' global head of banking, has said that demand for investments in businesses pursuing environmentally- and socially - responsible aims is booming.


INTERNATIONAL

UBS investigates further sexual assault claim
UBS is probing a second allegation of workplace sexual assault on the same former employee who criticised it for mishandling her rape complaint in 2017. The bank stated: "Our ongoing review covers all the allegations made… We remain confident in our policies and processes for handling such matters, but until the review is finalised it wouldn't be appropriate to comment any further."

Deutsche Bank supports co-living MBO
Deutsche Bank and Catalina Re are funding a management buyout of The Collective Old Oak, the world's largest purpose-built "co-living" building in west London.

Greek bank shares slide
Italy's recent market turmoil has been blamed by Yannis Stournaras, governor of the Bank of Greece, for a fall in the share prices of Greek banks.

Qatar blockade brushed off by banks
The FT features a report on the Qatari banking sector which has coped well with a Saudi-led blockade imposed in June 2017.

Egypt attracts overseas lenders
Egypt is attracting the attention of overseas banks as it recovers from years of economic instability and begins large-scale reform programmes.

Bank of Japan accused of ‘creating distortions’ by ETF buying 
By doubling the scale of ETF purchases from its Y3trn annual pace in 2014, the Bank of Japan has produced "staggering" distortions in trading patterns, according to a report.


AUTOMOTIVE

Murdoch in pole position to succeed Musk
James Murdoch is favourite to succeed Elon Musk as Tesla’s chairman after chief executive Mr Musk steps down from the former role by the middle of next month.


FINANCIAL SERVICES

Government expects 5,000 City job losses over Brexit
City minister John Glen has said the government now expects the City of London to lose 5,000 jobs due to Brexit. Appearing before the House of Lords’ EU Financial Affairs Sub-Committee, Mr Glen said the financial services sector employs one in 14 people in the UK and contributes £72.1bn in taxes, underlining its importance in negotiations, and noted comments from the governor of the Bank of Japan, who said “no single EU city could attempt to replicate the ecosystem that is the City of London.”

Portfolio trades grow
The FT features a report on the growth of "credit portfolio trades", which allow investment banks and asset managers to quickly exchange “multimillion dollar, multi-faceted blocks of corporate bonds.”

GAM shares jump on report of takeover interest in fund manager
Swiss fund manager GAM's shares rose yesterday on the back of market rumours of informal takeover talks between it and unnamed potential suitors.

Scrapping Libor leaves $500bn of bond contracts in limbo
Linklaters has warned that scrapping the Libor benchmark will result in over $500bn in bonds needing revision. 


LEISURE & HOSPITALITY

Patisserie Valerie uncovers potential accounting fraud 
The owner of Patisserie Valerie has uncovered "significant, and potentially fraudulent, accounting irregularities" and discovered HMRC has filed a winding-up petition against one of its subsidiaries. The café chain said it had been notified on Tuesday of accounting irregularities that could mean a “material misstatement of the company’s accounts”. In a separate announcement, it said HMRC has issued a winding-up petition against Stonebeach, its principal trading subsidiary, relating to £1.14m of unpaid taxes. Patisserie has suspended finance boss Chris Marsh as it investigates and has requested its shares be suspended from trading on London's AIM market.

Profits peak at Marston’s 
Pub group Marston’s has said that it expects to see higher growth in annual profit, after sales in the summer led the turnaround from a disappointing start to the year. Marston's said group turnover rose by 15% to more than £1.1bn. As such, anticipated profit before tax will be around £104m, up from £100.1m in 2017. Chief executive Ralph Findlay said: “There is also a potential Brexit impact on labour in the pub and restaurant sectors. [But] for Marston’s it is not a big issue. Most of our pubs are not in city centres. The percentage of our workforce that is non-EU is quite small. It is about 5 or 6%.”


PROFESSIONAL SERVICES

PageGroup expects full-year profits to beat forecasts
PageGroup has said it expects to beat full-year profit forecasts due to brisk business outside the UK. The recruiter added that hiring in the UK remains flat in the run-up to Brexit. 

Softbank takes stake in WeWork
Softbank is to take a majority stake in WeWork, which was valued at approximately £30bn earlier this year.


REAL ESTATE

Telford Homes warns of Brexit fears
Shares in London-based housebuilder Telford Homes tanked on Wednesday after it warned of “negative” Brexit commentary and increased stamp duty hampering overseas demand. Telford Homes boss Jon Di Stefano said: "As we get closer to Brexit, people get more and more nervous, and the negative commentary surrounding Brexit is going to be challenging. You’re likely to see more developers discounting and dropping prices - not all of them have the luxury to wait and see what happens."


RETAIL

Tesco chief tells court of profits 'shock'
Tesco's chief executive has told a court of his "genuine shock" on learning of the £250m overstatement of the company's profits. Dave Lewis told Southwark Crown Court he had "no indication at all" of the issue until brought to his attention by the supermarket's legal department. He was giving evidence in the trial of former Tesco directors accused of fraud and false accounting.


ECONOMY

IMF issues warning on no-deal Brexit
The International Monetary Fund has cautioned that a no-deal Brexit would disrupt the global financial system. It warned that millions of financial contracts between City banks and lenders in Europe could collapse if Britain leaves the EU without securing a deal. The organisation’s financial stability report stated: "A rise in political and policy uncertainty could adversely affect financial market confidence… For example, growing anxiety about a breakdown in Brexit negotiations could give rise to contractual and operational uncertainties in the United Kingdom and elsewhere in Europe.”

Economic growth stalls in August
ONS data shows Britain’s economic growth slowed to 0% in August, although figures for the three months to August showed the economy expanding by a relatively robust 0.7%. Total output of goods and services last month was no higher than in July, and the manufacturing, construction and farming sectors shrank. The ONS also revised upwards its readings for June and July from 0.1% and 0.3% respectively to 0.2% and 0.4%.

Bank of England economist praises wage growth
The Bank of England’s chief economist has said a “new dawn” is breaking for pay growth. Andy Haldane said the Bank’s database of wage settlements showed strong evidence of an upward shift in pay in the private and public sectors. However, he also warned that increased automation in the workplace could lead to weaker wage growth and a smaller share of national income going to workers.


OTHER

Rise in bullying cases alleged at Bank of England
Figures showing a "concerning" increase in bullying and harassment cases during Mark Carney's term as Governor of the Bank of England have led to moves by the influential Treasury Select Committee to investigate the Bank. Committee chairwoman Nicky Morgan said: "The Treasury Committee will no doubt look to get to the bottom of this when we next take evidence from the Court of the Bank of England."

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