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Daily News Roundup: Thursday 15th November 2018

Posted: 15th November 2018


Promotion for Rose

RBS has formally appointed Alison Rose, who currently serves as chief executive of commercial and private banking, as the new deputy chief executive of ring-fenced bank NatWest Holdings from the beginning of December. The Times suggests the move is a strong signal that Ms Rose is the most likely candidate to replace RBS’s CEO Ross McEwan when he retires. RBS is also set to make a decision on who will replace Ewen Stevenson in its top finance role. Katie Murray, who was the deputy, has stood in on an interim basis and may be appointed. Her main rival is said to be William Chalmers, a senior Morgan Stanley banker who has been a long-time adviser to RBS.

Lloyds agrees HBOS whistle-blower payout

  1. Banking Group has agreed compensation and asserted that it “very much regrets” its treatment of a staff whistle-blower, former executive Sally Masterton - author of the so-called Project Turnbull report. The document alleged that former Lloyds and HBOS bosses knew about a major fraud at HBOS’s Reading branch, which led to six people being jailed, before it was taken over by Lloyds in 2009. Alex Brummer in the Mail calls on the Government to set-up a judicial inquiry into the allegations.

Starling rolls out Post Office services

As of this week, customers of app-based start-up Starling Bank can withdraw and deposit money at any of the 11,500 Post Office branches. Starling Bank chief executive Anne Boden, the former Allied Irish Banks executive, said the deal would help the 1,500 communities with no local bank branch.


Deutsche Bank cost-cutting needs to go deeper

Deutsche Bank’s CFO James von Moltke has said that the German bank has speeded up its cost-cutting plan. Previously, the bank said it was aiming to lower expenses to €21bn (£18.31bn) by 2021. However, von Moltke said that costs may need to be "substantially lower". He said: “In this management team we are extremely focused, disciplined, on the execution that it's going to take to make this platform more efficient... we simply have to drive greater efficiencies.”

Risks to financial sector rising and banks unprepared — Bundesbank

Bundesbank has warned that Germany's financial sector is underestimating the potential risks of a recession and that lenders are not adequately protected against potential future credit risks.


Addison Lee loses appeal

A claim that Addison Lee’s drivers are employees, not self-employed contractors, has been upheld in a major blow to the taxi company. The Employment Appeal Tribunal ruling confirms that drivers should be paid the minimum wage and holiday pay. The GMB union which brought the case called it a “huge win” for worker rights.


Flybe up for sale

Flybe, the budget airline, has put itself up for sale as a combination of rising fuel prices, the weaker pound and lower demand has weighed on profits. The announcement comes after Flybe warned last month that profits would be lower.


Grainger to buy out joint venture partner

Grainger has agreed a deal to buy out Dutch pension fund APG from a joint venture. The rented housing group is working towards a £396m expansion of its portfolio. The purchase, which is subject to shareholder approval, will be funded by a £346.7m rights issue fully underwritten by JP Morgan Cazenove and Numis.


Deal is major step towards financial stability

John McFarlane, the group chairman of Barclays, has hailed Theresa May’s draft Withdrawal Agreement as a “major step to ensuring financial stability”, arguing that the transition period “enables businesses to deal with Brexit in a normal, rather than hurried, way”. Mr McFarlane added: “We appreciate there needed to be compromises, but this is infinitely better than the severe and unpredictable damage from a no-deal outcome.” Elsewhere, Catherine McGuinness, policy chairman at the City of London Corporation, said the announcement of a draft Brexit agreement between the UK and the EU was a "significant step towards a deal being finalised". Miles Celic, chief executive of TheCityUK, welcomed the agreement's recognition of the value of the financial services sector. He said: “The importance of financial services has been acknowledged and its inclusion in the political declaration means that this sector is hardwired into the future negotiations.”

Transferwise restructures business banking offering

Transferwise now includes a debit card with its business banking offering, along with integration with accounting platform Xero and an open access developer channel. Xero itself has revealed integrations with four other UK fintechs - Tide, Starling Bank, Revolut and Soldo - through its new bank feeds developer programme.


FOBT changes brought forward

Following a massive protest by MPs, a cut from £100 to £2 a go for fixed-odds betting terminals (FOBTs) will now come into force next April rather than October. To cover the expected loss of tax revenue “and to protect vital public services”, a rise in tax paid by online gaming firms is also being brought forward six months to next April.


Spanish train maker to build new factory

Spanish train manufacturer Talgo has provisionally selected the former Longannet power station in Fife as the location for a new factory, with 1,000 jobs to be created if it wins a £2.75bn contract to build over 50 trains to be used on the high-speed London to Birmingham line.


Musical start-up wins backing

Pirate Studios, a London tech start-up, will today close a $20m (£15.4m) investment from Talis Capital. Pirate has said it will use the funding to accelerate the expansion of its network of studios and online tech platform.


FT headquarters fetches £115m for Pearson

M&G Real Estate has bought the Financial Times’ headquarters on London's South Bank for £115m.

Workspace profits hit by property market slowdown

Office developer Workspace has taken an 18% hit to its pre-tax profits, which fell to £101.6m in the half year to September, due in part to slowing increases in valuations.


House of Fraser to close more stores

House of Fraser is set to close four more stores, all based in major shopping centres. The department store chain will close its Lakeside, Metrocentre, Norwich and Nottingham outlets in the New Year. Mike Ashley, boss of Sports Direct, the retailer’s new owner, said Intu Properties, the landlord for the sites, had been unwilling to reduce rents for the ailing shops.


Inflation remains steady

The UK inflation rate remained steady at 2.4% in October, confounding analyst expectations of a rise to 2.5%. The Consumer Prices Index (CPI) figure included falls in food and clothing costs, but rising utility bills and petrol prices, said the ONS. The ONS's head of inflation, Michael Hardie, said: "Prices paid by consumers continued to rise at a steady rate, with falls in food and clothing offset by rising utility bills and petrol, as crude [oil] prices continued to rise." The Bank of England expects inflation will drift lower but expects to have to raise interest rates in coming years to keep inflation at or near its target figure.

UK economy faces 8% hit from no-deal Brexit

The IMF has warned that the UK economy could face a long-run hit of up to 8% of GDP in the event of a no-deal Brexit. The equivalent of around £6,000 per British household. The Fund also said that the British economy would be around 3% weaker even if it successfully secured a “Canada-style” free trade deal with the rest of the European Union “due to lower trade, migration and productivity”. A “European Economic Area-type” arrangement, in which the UK stays in the single market, would led to a long-term hit of 1.5%, driven by new non-tariff barriers, the IMF added.


Cabinet backs Theresa May’s Brexit plan

Theresa May has announced that Cabinet has backed the draft Brexit withdrawal agreement and stated that she believed the deal was in the UK’s national interest. However, although the Cabinet reached a collective decision, approval was not unanimous, with nine ministers reportedly speaking out against it. The draft document has now been published and details the planned 21-month transition period; the £39bn “divorce payment”; reciprocal rights of citizens and the Irish backstop. It also provides an outline of the political declaration setting out the framework for the future relationship between the UK and the EU. The texts indicate a future trading relationship under which Britain would abide by EU regulations on goods and its standards on issues such as state aid, the environment and worker protection, in exchange for market access.

Former UBS trader deported

Kweku Adoboli, the former UBS trader convicted of fraud, has been deported to Ghana, despite a long campaign to keep him in Britain. Hannah Bardell, Mr Adoboli’s local MP, said: “No one is saying he hasn't committed a crime, but he has been rehabilitated and is being punished twice.”

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