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Daily News Roundup: Thursday, 13th February 2020

Posted: 13th February 2020


Sainsbury’s Bank chairman to step down

Roger Davis, the chairman of Sainsbury’s Bank, is to step down after nearly seven years in charge. The announcement comes five months after Sainsbury’s completed a strategic review of its financial services business, which made an underlying operating profit of just £20m in the six months to August 31st. Sainsbury’s Bank abandoned mortgage lending last year and is considering selling its £1.9bn home loans book.

RBS beefs up operations in Poland as staff prepare for job cuts

Royal Bank of Scotland is beefing up its investment banking operations in Poland with the lender’s NatWest Markets division advertising more than 40 positions in Warsaw.

Politician presses for rural facilities

Liberal Democrat MP Jamie Stone is calling for a new banking hub to be set up in the Highlands. He is calling on major banks to act to help his constituents who have been badly affected by a string of branch closures.


Permira snaps up Golden Goose

Italian fashion brand Golden Goose has been bought for €1.3bn by Permira, the private equity firm that owns Dr Martens.


ABN Amro launches review after rise in bad loans

A sharp increase in bad loans has triggered the second review into corporate and investment banking activities for ABN Amro in as many years. The FT’s Lex says ABN Amro “has all the woes of its peers — low interest rates, high costs — and less ability to overcome them.”

Patents reveal extent of China’s digital currency plans

The People’s Bank of China has filed more than 80 patents related to its plans to launch a digital currency, the FT reports. The patents relate to issuance, supply, settlements and digital wallets.

Upbeat CBA results fuel hopes that worst is past for sector

Shares in Commonwealth Bank of Australia rallied yesterday following a strong set of results for the six months to the end of December and a positive outlook for 2020.

Wells Fargo’s chief lures another JPMorgan executive

Charlie Scharf, the new CEO of Wells Fargo, has hired JPMorgan Chase’s head of mortgage business Mike Weinbach to take over Wells’ consumer lending businesses.

Coronavirus spells trouble for Chinese banks

The FT examines how China’s small banks in particular are vulnerable to company failures as a result of the spread of coronavirus, being laden with high levels of bad debt.

Cypriot banks hub for laundering, watchdog warns

Cyprus is being urged by European financial watchdog Moneyval to crackdown on money laundering through its banks


Petrol and diesel car ban could be around the corner

Transport Secretary Grant Shapps has asserted that petrol, diesel and hybrid cars could be removed from sale in just 12 years, three years ahead of previous indications. Prime Minister Boris Johnson just last week suggested that 2035 would be the year the ban was introduced, which was five years earlier than previously indicated.


Babcock again downgrades profits

Government contracting firm Babcock has revealed another downgrade on profits over problems in its business flying workers by helicopter to North Sea oil rigs. The £85m charge pours more hard work on chief executive Archie Bethel, who is due to leave this year. Profits will now be around £540m, down from the £544m estimated by analysts after last year’s profit warning.


Financial services ‘punch-up’ unhelpful, says incoming BoE governor

Andrew Bailey, incoming governor of the Bank of England, has warned that both sides of the Brexit negotiating table must find a way to settle disagreements over how the UK’s finance industry can do business with the bloc in a constructive way. Appearing before a House of Lords committee, Bailey, who said it would be “hard to imagine” the UK not being granted equivalence by the EU after the post-Brexit transition period ends in December, asserted: “You would want to have a mechanism to say OK, let’s sit down and talk about what we’re doing here. If that ended up in a sort of metaphorical punch-up every time and a threat to withdraw equivalence, that process would just not work properly.” During the same session, deputy governor Sam Woods said he was “cautiously optimistic” the EU would grant permission for the City’s clearing houses to continue processing derivatives for EU customers after Brexit. Separately, the International Regulatory Strategy Group has set out proposals for a new system for assessing regulatory equivalence post-Brexit. In a letter to the Chancellor and EU commissioner Valdis Dombrovskis the IRSG said that the UK and EU would have the autonomy to change their regulations but sign up to a formal process for deciding whether they were still "equivalent", based on the outcomes that the rules produced rather than their exact wording.

Aviva increasingly using tech to handle storm damage claims

Insurance giant Aviva has seen a 285% surge in calls and claims following Storm Ciara, with Nottingham, Birmingham, Norwich, Sheffield and Bradford particularly badly affected. Andrew Morrish, UK claims director for Aviva, said the company is using technology to settle claims more quickly: “This means that around 12% of customers have already received payments,” he added.

Trader Anil Prasad to shut Silver Ridge hedge fund

Citigroup's former currencies guru Anil Prasad is closing his Silver Ridge hedge fund to pursue other interests. He raised $500m in 2014 for its high profile launch.

Asset manager Amundi shoots past €1bn income mark for first time

Paris-based asset manager Amundi reported a strong 2019 with adjusted net income up 6.6% to surpass the €1bn mark for the first time.


Czech backer claims NMC Health buyer

Beleaguered Middle East hospitals operator NMC Health was the top riser on the FTSE 100 on Wednesday after one of its smaller shareholders, Czech activist investor Krupa Global Investments, claimed to have found a private-equity buyer for the firm. Krupa said the unnamed potential investor already owns healthcare businesses in Europe and has more than €10bn in assets under management.

DRI Healthcare plans FTSE float

Healthcare royalty investment company DRI Healthcare hopes to raise up to $350m (£269m) to fund acquisitions in a London IPO next month. Healthcare royalties are payments made to a patented company or research firm developing a drug in exchange for the right to use it and the firm is managed by Toronto-based investment manager DRI Capital.


Eurozone industrial production crashes

Industrial production slumped 4.1% at the end of 2019 in the eurozone compared with output levels the same month a year earlier, with Germany down 7.2%, Italy 4.3% and France 3.2%. Output was down 2.1% compared with November and economists see little hope for a swift revival with the coronavirus now seriously disrupting car manufacturers in particular.


Ofcom chairman stepping down

Ofcom chairman Lord Burns is stepping down from the communications watchdog after he won the battle to appoint career civil servant Dame Melanie Dawes, who has been permanent secretary at the Ministry of Housing, Communities, and Local Government since 2015, as chief executive. As part of an initial consultation response, Culture Secretary Baroness Morgan has said that Ofcom will be given the powers to ensure "protections, accountability and transparency" online.


First house price rise in 18 months – Rics

House prices rose across the UK for the first time in a year and a half last month as optimism returned, according to the latest Rics survey. A net balance of 17% of surveyors and estate agents reported higher house prices in January, compared to the December reading of -2%. Prices rose in both London and the south-east, where they had been falling for most of the past few years, while Northern Ireland and Scotland showed the strongest price growth.

GBB launches new property development fund

GBB is setting up a new £1bn fund for property developers in Yorkshire and the North. The bank will offer secured property development loans of between £1m and £5m to support regional property developers and SME construction companies


Retail bosses call for rates action

Over fifty retailers have written to Chancellor Sajid Javid calling for reform of the business rates system. "The burden of business rates has become unsustainable for many retailers," they said. The British Retail Consortium, which coordinated the letter, argues that they have subsidised other industries to the tune of £543m over the last three years, while firms outside London have subsidised those in the capital in the sum of £596m.


UK was third fastest G7 economy in 2019

Despite the UK stagnating in the final quarter of last year it had the third-fastest growing economy in the G7, expanding by 1.4% in 2019. France, Germany and Italy, grew by 1.3%, 0.5% and 0.2% respectively. Only the US and Canada, which posted growth of 2.2% and 1.5% respectively, were ahead of Britain.


City of London facing governance review

Lord Lisvane is to review governance at the City of London Corporation amid growing pressure for the body to modernise. The former clerk of the House of Commons and a member of one of the trade guilds connected to the Corporation will report his initial findings in May. The move follows publicity over the way a gay candidate for Lord Mayor was interviewed last year.

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