London forex class action joined by another US law firm
Specialist litigation firm Hausfeld, one of the law firms that secured a $2bn settlement in the US over claims of foreign exchange price manipulation, has started a collective action at the Competition Appeal Tribunal in London, alleging that Barclays, Citibank, the Royal Bank of Scotland, JPMorgan, UBS and MUFG banks acted unlawfully when trading certain currencies. This follows law firm Scott+Scott launching a European version of the US lawsuit earlier this year. Phil Evans, a former Competition and Markets Authority inquiry chair who is leading the Hausfeld collective action, commented: “The European Commission fined these banks more than €1bn for their wrongdoing. But that should not be where this ends… we want to hold the banks accountable for their actions and secure compensation for affected customers.”
Consumers scammed when buying on social media sites
A survey by Lloyds Bank reveals that 34% of shoppers who have made purchases through social media websites claim to have been scammed at some point. The majority claimed they had sent money via bank transfer but never received their items. Lloyds has advised customers to use trusted online retailers - and make payments by credit card where possible. Paul Davis, retail fraud director at Lloyds Bank, said: “Scammers are ready to take advantage of anyone letting their guard down online in the Christmas shopping rush, so it's more important than ever to stop and think about how you're paying when buying through social media.”
Small banks lobby BoE to relax rules
UK challenger banks have called on the Bank of England to ease requirements for holding special debt aimed at protecting taxpayers from bailing out troubled banks. Smaller banks say the rules stymie their efforts to compete with the "big six" lenders - RBS, Lloyds, Barclays, HSBC, Santander and Nationwide.
Horta-Osório agrees to reassess HBOS fraud damages
Lloyds CEO Antonio Horta-Osório has promised to work with victims of the HBOS Reading fraud and the City regulator after an independent review of the bank's compensation scheme found that it had not led to fair or reasonable outcomes.
Coventry admits to miscalculating financial strength
Coventry Building Society has admitted that it had understated its risk-weighted assets by £222m. The building society said the mistakes dated to 2008 and were discovered late last month and continues to probe them with the Prudential Regulation Authority.
Nestlé to sell Häagen-Dazs ice cream business for $4bn
Nestlé is to sell its US ice cream business, which includes Häagen-Dazs. into the private equity-backed vehicle Froneri, which it owns with PAI Partners.
Credit Suisse revises profit target down
Full-year financial targets have been softened at Credit Suisse as the bank seeks to make hundreds of millions of new cost-saving measures. The lender is targeting a return on tangible equity of at least 8% for this year, down from its previous goal of 10% to 11%. Adam Gishen, Credit Suisse’s head of investor relations, commented: “We lost a number of big deals that were either voted down, didn't complete or get regulatory approval … That hurt profitability directly.” The FT’s Lex suggests Credit Suisse’s woes will be shared by fellow European banks until Christine Lagarde can engender some more confidence in the eurozone economy. Separately, Moody’s has downgraded its outlook for European banks to negative, citing weak growth and a highly uncertain 2020.
BofA chief joins chorus of bank bosses predicting strong end to year
Brian Moynihan, the CEO of Bank of America, told investors he expects a strong end to the year for trading and investment banking, with 8% and 5% growth expected for each division respectively.
China’s smaller banks forced to act to support shares
At least 10 small Chinese banks have been forced to buy back shares in recent months under “stock price stabilisation” regulations further exposing the plight of China’s banking industry.
HSBCs Swiss unit reaches deal with US
HSBC's Swiss private banking arm has agreed to pay a $192.4m (£146.7m) fine imposed by the US Department of Justice to resolve a US probe into its role in helping wealthy Americans evade taxes using undeclared Swiss bank accounts.
Banks avoid mentions of Hong Kong unrest in research for clients
European and US banks fear mentioning the protests in Hong Kong to clients in their research will upset Beijing and damage their chances of securing deals in mainland China.
Letter: Myopia threatens Basel Committee’s progress on minimum standards
Bill Coen, former secretary-general of the Basel Committee on Banking Supervision, agrees with analysis in the FT that attempts by banks to revise capitalisation rules are dangerous.
Tui braced for hit of up to €400m next year from 737 Max groundings
Tui has warned that the grounding of the Boeing 737 Max airliner would cost it up to €400m if safety restrictions on operating the aircraft are not lifted by April.
Fears raised over equity release mis-selling
Former pensions minister Baroness Altmann has raised concerns over equity release, which last year saw 80,000 homeowners unlocked a record £3.9bn of property wealth. Experts are worried consumers do not properly understand how compound interest on the loans can mean borrowing a small amount can mean losing their home. Justin Modray, of Candid Financial Advice, said: “While equity release can be useful for some, it's ripe for mis-selling…I'd like to see sales commissions scrapped in favour of explicit fees, as well as better value-for-money products coming into the market.” The Financial Conduct Authority told the Mail it had been undertaking “exploratory work to understand lending into later life” and would take action if it found evidence of harm to consumers.
Mark Barnett fired from £1.3bn investment trust
Invesco fund manager Mark Barnett has been fired from running the £1.3bn Edinburgh Investment Trust amid growing disquiet about his performance. Barnett took over running the trust from his mentor and colleague Neil Woodford in 2014. Since he took on the job, the trust’s share price has fallen by 10% compared with returns of 25% on average for rival equity income trusts. The trust will now be run by James de Uphaugh, of Majedie Asset Management. The decision comes after Invesco recently appointed Martin Walker to co-run the Invesco UK equities team with Mr Barnett.
Sutherland appointed Saga chief executive
The former boss of Superdry, Euan Sutherland, has been named as the new CEO of insurance group Saga.
Visa in partnership with MFS Africa digital payments hub
Visa and pan-African mobile money hub MFS Africa are to enter into a partnership in a bid to connect the mobile money ecosystem on the continent with digital payments globally.
More wealth advice for women following link-up
Addidi, the wealth advisory service for women, has formed a partnership with Leeds-based Progeny and will now offer an expanded range of expertise including legal and tax advice.
Potential buyers express interest in Newport steel plant
Tata's Orb steelworks in Newport has seen interest from Liberty Steel, which has a base in the city, while Big River Steel, a US-based firm, would like to make use of the site if another firm operates it. A Tata spokesman stated: "We have been working hard to identify alternative jobs at Tata Steel for employees at the Orb business and we remain committed to finding jobs for all those wanting to stay with the company.” The company has estimated that it would cost £50m to upgrade the site to allow it to produce the type of steel that could be used in the manufacture of electric cars.
MEDIA & ENTERTAINMENT
Shares in M&C Saatchi fall after executive departures
M&C Saatchi shares fell by nearly 6% yesterday after founder Lord Maurice Saatchi announced that he was stepping down as executive director, with Lord Dobbs, Sir Michael Peat, Prince Charles’ former private secretary, and City figure Lorna Tilbian also resigning from the board. The shake-up follows a major profit warning last week after the firm admitted an £11.6m accounting error.
DWF buys Spanish law firm
DWF is to buy Spanish law firm Rousaud Costas Duran (RCD) for €50.5m (£42.5m), as the listed London law firm expands its presence in the country. This comes as DWF revealed a revenue rise of 10% to £146.8m, with profit before tax down £600,000 to £4.7m.
Rics: Political uncertainty stalls housing market
The housing market has been put “on hold” by the General Election, according to a new report from the Royal Institution of Chartered Surveyors, which reported house prices fell at their fastest rate since April last month. New enquiries from prospective buyers slipped in November for the third month in a row, as 9% more respondents saw a decline in enquiries than a rise. However, the market expected to pick up over the next 12 months, with a third more respondents anticipating house prices will rise rather than fall.
JD Sports biggest FTSE 100 faller
JD Sports was the biggest faller on the FTSE 100 yesterday, after its majority owner Pentland sold a 2.5% stake in the retailer at a discount of £177m. Pentland, which remains the majority owner with a 55% stake, said it is committed to remain a 'long-term majority investor' despite the sale. Berenberg analysts noted the increased free float prompted by the sale would improve the company’s market liquidity, potentially making its shares cheaper to trade and more readily available.
Fortress completes Majestic Wine deal
Fortress Investment, which is owned by SoftBank, has completed the purchase of Majestic Wines, helping to secure over 1,000 jobs. Executive chairman John Colley, who is returning to the business after a two-year stint on the board of B&Q owner Kingfisher, said the group is now targeting growth, having just unveiled a fresh look store in Blackheath, south London.
Goldman Sachs predicts £367bn cost of Corbyn victory
Victory for Jeremy Corbyn in the election would lead to a sharp fall in the pound and the loss of £367bn in the value of UK companies, according to Goldman Sachs. The Labour party’s policy of seizing 10% of shares form large firms would also cost the typical automatically enrolled pension saver as much as £12,000 by 2030,a specialist insurer told the Telegraph. The figures come after the CEBR predicted UK output would be 3% over the next 20 years if Labour win, costing £67bn a year. A Labour Party spokesman said: “It’s no surprise that big banks are coming out with fantasy numbers for fat-cat shareholders. Labour is on the side of pensioners and will provide free personal care for over 65s and compensation for 1950s women." The Telegraph’s Tim Wallace looks at various predictions for the market with different election outcomes, with ING predicting 10-year bonds could almost double to 1.5% by late 2020 under a high-spending Labour government. However, investors favour Labour’s Brexit plans as they are much closer to simply remaining in the EU than the Tories' proposals.