BANKING
Banks told to warn expats of service changes
The Financial Conduct Authority (FCA) has called on banks to provide British expats living in the EU with "timely" warnings if they are to drop services after Brexit. This follows reports that some customers living in EU countries have been told accounts will be closed once the transition period ends on December 31, with the Treasury Committee voicing concern over the matter. The City watchdog and Bank of England have written to chief executives of UK and international banks, saying customers should be treated fairly and given sufficient notice to make alternative arrangements if some services are reduced or ended. The FCA warned lenders: “It would be a poor outcome for the customer for you to suddenly stop servicing them." Banks have been told they should give at least two months' notice of plans to close any accounts in credit. Mel Stride, chairman of the Treasury Committee, said the letter to banking CEOs was a “welcome step”.
Mortgage applications soar after lockdown
Mortgage applications soared to an estimated value of £216bn after the coronavirus lockdown was lifted, however the closure of the housing market means lending is expected to be down compared to last year. Research from Experian showed that mortgage applications were up 13% year on year in July, followed by rises of 25% in both August and September. According to data from the credit reference agency, 1.2m mortgages will be agreed this year at a value of £216bn, compared to 2019’s £250bn across 1.5m loans. Lisa Fretwell, managing director of data services at Experian, said: “Tax incentives and an extended period indoors have encouraged people to make a move this summer, as our analysis shows.”
Tandem appoints Noble
Tandem has appointed Paul Noble as chief commercial officer as it looks to become the UK’s first fully green digital lender. Mr Noble, whose 20-year career in banking includes time at Barclays, is the chief executive of Allium, which was recently acquired by Tandem.
INTERNATIONAL
US heavyweights reveal quarterly figures
Goldman Sachs has reported a 94% increase in profits for the three months to September. The bank said profits reached $3.6bn following a 29% spike in trading revenues compared with a year ago and a 7% boost in investment banking. Elsewhere, profit at Bank of America fell 15% to $4.8bn in the same period. The bank said revenue excluding interest expense was $20.3bn, down from $22.8bn for the same period last year. BofA set aside another $1.39bn for bad loans - less than analysts had estimated. Wells Fargo yesterday reported Q3 net profits of $2bn – a $4.4bn improvement on Q2, with much of this attributed to lower provisions for bad loans.
Credit Suisse hires Meissner
Credit Suisse has appointed Christian Meissner as co-head of international wealth management investment banking advisory and vice chairman of investment banking. Mr Meissner was previously head of global corporate and investment banking at Bank of America Merrill Lynch.
AUTOMOTIVE
BlackRock invests $118m in UK electric van group Arrival
BlackRock has invested $118m in electric vehicle startup Arrival, in a deal that values the British firm at €3bn. Arrival intends to use the investment to open its first North American factory.
AVIATION
Marshall Wace acquires IAG stake
Marshall Wace has taken a 3% stake in British Airways owner IAG worth approximately £140m. The disclosure makes the hedge fund one of IAG’s biggest backers. Qatar Airways is IAG's biggest investor, with a 25% shareholding.
CONSTRUCTION
Barratt records robust forward sales
Barratt Developments has reported a surge in sales helped by the Government’s stamp duty holiday and the looming end of the Help to Buy Scheme. The housebuilder said total forward sales as of 11 October increased 16.7% to 15,135 homes at a value of £3.7bn. It also said that it had completed 4,032 home sales between July 1 and October 11, up 24% on the same period last year.
FINANCIAL SERVICES
ESMA working on ‘Plan B’ to move euro clearing from London
The European Securities and Markets Authority (ESMA) is working on a “Plan B” that would move clearing of euro-denominated derivatives out of London if the bloc decides not to grant the UK long-term access to its markets. The London Stock Exchange’s LCH unit has been given permission by the bloc to continue clearing derivatives for EU customers for 18 months after the post-Brexit transition period ends, with ICE and the London Metal Exchange granted similar temporary equivalence permissions. ESMA chair Steven Maijoor said it will assess how a “credible plan” for relocating euro clearing could work, commenting: “Equivalence assumes good cooperation and we work very well with the Bank of England, but as a fallback plan it’s important to assess if there could be an argument to relocate those activities to the EU”.
FCA fines hedge fund over secret shorting of shares
The Financial Conduct Authority (FCA) has fined Hong Kong-based energy hedge fund Asia Research and Capital Management (ARCM) £873,118 for failing to disclose its short position in energy group Premier Oil. The City watchdog said ARCM failed to make 155 notifications to the regulator and 153 disclosures to the public in regard to its bets against Premier Oil between February 2017 and July 2019. The FCA said ARCM's failings were "particularly serious" because there were so many of them and they were committed over such a long period.
Ashmore grows AUM
Ashmore said AUM increased by nearly $2bn in the first quarter as a recovery in the markets helped to offset net outflows. The emerging markets-focused investment manager said AUM rose by $1.9bn in the period to September 30, offsetting net outflows of $0.8bn.
PayPal to begin charging for inactive accounts
PayPal has announced it is to start charging £12 for customers with money in their accounts if they have not used it for 12 months or more.
LEISURE AND HOSPITALITY
Travel industry calls for action on airport testing
The travel industry has urged ministers to “act decisively” in putting in place airport coronavirus testing in order to save the £60bn industry. Trade body ABTA also called on the Government to provide targeted support for travel companies, many of which have been without any revenue this year. New figures from the association showed that only 15% of people took an overseas holiday between February and July this year, down from 64% last year.
GBK bought in rescue deal
Gourmet Burger Kitchen has been saved, with Boparan Restaurant Group, which took Carluccio's out of insolvency earlier this year, snapping up the chain in a pre-pack administration. The deal will see 26 branches close, with the loss of 362 jobs.
MEDIA AND ENTERTAINMENT
Audioboom calls off sales process
Audioboom has called off a formal sale process after saying it experienced "very encouraging growth" over the summer. The podcasting company said that whilst it had decided against a takeover or merger, it had agreed to sell a 10% stake to One Nine Two.
PROFESSIONAL SERVICES
Page Group suffers UK profits loss
Page Group’s gross profit fell to nearly £144m for the three months to September, a third lower than the same period a year earlier. Gross profits for the recruiter’s UK arm, which accounts for about an eighth of the group’s business, fell 47.9% to less than £18m for the quarter. Profits in the Asia Pacific region fell 28.2%, while EMEA profits declined 24.5%. Profits in the Americas were 41.9% lower.
REAL ESTATE
Pandemic to hit retail property values
A poll of investors suggests retail property values are expected to fall up to 40% over the next year due to the coronavirus crisis. Some 37% of investors say they expect retail to suffer the worst long-term damage, while 36% flagged hotels as the sector likely to be hardest-hit.
RETAIL
Asos adds 3m customers as profits soar amid pandemic
Asos has revealed it has added 3.1m customers in the past year, taking its total to 23.4m, with more than 7m in the UK. Pre-tax profit for the year to August 31 was £142.1m, in line with the £130m-£150m range forecast by the company two months ago, and up from the £33.1m it reported last year. Revenue rose 19% to £3.26bn.
ECONOMY
Higher taxes needed to balance the books
The Organisation for Economic Co-operation and Development (OECD) has suggested that higher taxes could be the path to easing national debt that could hit 120% of GDP in the wake of the coronavirus pandemic. OECD economists say higher taxes, tight controls on spending and new measures to boost jobs and growth may be required, mooting measures including the removal of some tax exemptions and reliefs, making pensions wealth liable for inheritance tax and a tougher crackdown on tax evasion. Meanwhile, the International Monetary Fund says the wealthy should pay higher taxes to ease economic pressure brought about by the pandemic. Its head of fiscal policy, Vitor Gaspar, said officials across global economies should “adopt measures to improve tax compliance and consider higher taxes for the more affluent groups and highly profitable firms”.
OECD: Disorderly Brexit could damage UK's economic recovery
The OECD has warned that the UK’s economy faces a double risk to recovery from a disorderly Brexit as the coronavirus pandemic drags down growth. The think-tank said the COVID-19 pandemic would further complicate a disorderly Brexit as companies were less prepared for the end of the transition period, having diverted attention away from leaving the EU. It warned that failure to secure a free trade agreement before the end of the transition period would leave the British economy 6.5% lower in the next few years than would have been the case if existing arrangements with the EU had been maintained.
OTHER
Firms call for mandatory reporting of ethnicity pay gaps
A letter to the Telegraph calls on the Prime Minister to make it mandatory for organisations to report on their ethnicity pay gap. Noting that 11% of companies have already done so, signatories say voluntary publication “will never be enough”, adding that until all organisations with more than 250 employees have to report on their pay gap, “none of us will have the depth of insight that we need to bring about change at the right scale.” They add that UK businesses “stand ready to make this country one of the fairest places to work in the world”, arguing that mandatory ethnicity pay-gap reporting “would be a monumental step towards that ambition”. Signatories include Barclays chair Sir Ian Cheshire, Lloyds CEO António Horta-Osório, NatWest chief executive Alison Rose, Nationwide boss Joe Garner, and Santander CEO Nathan Bostock.