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Daily News Roundup: Thursday, 17th June 2021

Posted: 17th June 2021


LSB: Banks must improve scam compensation procedures

The Lending Standards Board (LSB) says banks must urgently improve the way they apply a code which reimburses bank transfer scam victims. The LSB warned of systemic failings and said firms must work without delay to ensure the best outcomes for customers. It has written to the chief executives of banks which have signed up to the code, saying issues highlighted in a previous review have not been fully addressed. These include concerns over consistency around reimbursement processes, identification of customers’ vulnerability, effective warnings about scams, and record keeping. The voluntary code was launched in 2019 to reimburse people who have been tricked into transferring money in situations where neither they, nor their bank, is to blame. Concerns have been raised about banks applying the code in different ways. There have also been calls for greater transparency from banks over their scam reimbursement rates. Emma Lovell, chief executive of the LSB, said: “We will continue to collaborate with the industry to increase the number of firms signed up to the code and we would urge firms who are not already signed up, to consider the contents of this report and review their arrangements for dealing with authorised push payment scam cases.” Gareth Shaw, Which? head of money, has called on the Payment Systems Regulator to “take decisive action by introducing mandatory standards of consumer protection for all banks and payment providers”, saying tough enforcement measures are required for firms that fail to follow the rules.

Goldman Sachs pushes back office return plans

Goldman Sachs has pushed back plans to bring its UK staff back to the office after the Government announced that the end of lockdown restrictions will be delayed. While the bank had been planning to have staff return to their desks this month, Goldman Sachs International chief executive Richard Gnodde has told staff that current working arrangements will continue, with the lender’s office in the City remaining open but attendance to remain voluntary. Elsewhere, JPMorgan has told UK-based employees that its return-to-office plans are on hold until July. Meanwhile, BBC News looks at banks plans for how work will be conducted, post-pandemic. NatWest has said just over a third of its UK full-time employees would continue to work remotely, while Barclays said it expects to "invite" more staff back to its Canary Wharf office over the summer but is "moving towards a hybrid way of working". HSBC has also said it plans to adopt a hybrid model of working.


Private equity firms eye EP Energy

Private equity firms including EnCap Investments and Quantum Energy Partners have made takeover bids for EP Energy, with the oil and gas producer reportedly targeting a valuation of up to $1.5bn.


Firms in talks over gigafactories

Six companies are reportedly in talks about building the electric car battery "gigafactories" that could secure the future of Britain’s automobile industry. Carmakers Ford and Nissan, conglomerates LG and Samsung, and start-ups Britishvolt and InoBat Auto are understood to be in discussions with Government or local authorities about financial support and locations for potential factories.


Boeing-Airbus trade war resolved

A 17-year trade war between the European Union and the US over aerospace subsidies has come to an end. The two sides have been battling at the World Trade Organisation over subsidies for US firm Boeing and European rival Airbus, which each argued exposed the other to unfair competition. In March they agreed to a four-month suspension of tariffs on $11.5bn of goods and have now said they will suspend the tariffs for five years.

Emirates receives further state support

Emirates airline is to receive a further $1.1bn in state support from Dubai after reporting a $5.5bn loss for the year ending on March 31. This followed a $288m profit in the year earlier period. Meanwhile, Qatar Airways has also been granted an additional $3bn from its state owner.


Deadline extended on Blackstone's St Modwen deal

Private equity firm Blackstone and property investment and development group St Modwen have been granted an extension to finalise a £1.2bn takeover deal. St Modwen, which says it has reached an agreement on the terms of the takeover bid by Brighton Bidco, a newly formed company of funds advised by Blackstone, has secured an extension from the Panel on Takeovers and Mergers. It expects to deliver a scheme document related to the deal to shareholders by no later than June 25.

Blackstone to buy office developer Soho China

Blackstone has agreed to buy Chinese office developer Soho China for about $3bn. Soho China is 64% owned by chairman Pan Shiyi and chief executive Zhang Xin. The husband-and-wife founding team will retain a stake of about 9% in the company and become its second-largest shareholder.


Jenkins’ fintech raises $187m

10x Future Technologies, a fintech firm founded by ex-Barclays CEO Antony Jenkins, has raised $187m in its series C funding round. The funding round was co-led by BlackRock and Canada Pension Plan Investment Board, also known as CPP Investments. 10x Future Technologies, which seeks to help larger and more established banks build on their fintech services, has also been backed by investors at JPMorgan Chase, Nationwide, Ping An and Westpac.

London listing prepared by fintech firm

Fintech firm Wise, formerly known as TransferWise, is reportedly planning to launch a direct listing on the London Stock Exchange, with a valuation of over £5bn believed to be likely.


Sanofi UK pension scheme to receive £37m injection

Drugmaker Sanofi is to boost its UK pension plan by £37m following a threat of enforcement action by the Pensions Regulator. The French pharmaceutical firm has also committed to new financial guarantees.


Hospitality industry warns of lost summer

The government's refusal to extend coronavirus support programmes in line with the delay to the lifting of lockdown measures has been criticised by industry group UKHospitality.


BPI figures show growth of British music exports

Record label association the BPI has reported that the British record industry earned £519.7m overseas in 2020, with export revenues for music increasing by 6% compared to the year earlier period. Data previously released shows that total UK recorded music revenue was up by 3.8% last year to £1.118bn.


House prices climb but growth slows

Office for National Statistics (ONS) figures show that house prices rose by 8.9% in the year to April, with this down on the 9.9% year-on-year increase recorded in March. The ONS said March’s increase, which was the biggest since 2007, may have been driven by buyers looking to complete deals before the original stamp duty holiday deadline of March 31. Month-on-month, data from HM Land Registry shows that the average UK house price stood at £250,772 in April, around 1.9% lower than in March. Sam Beckett, head of economic statistics at the ONS, noted that with average prices falling, this ended eleven consecutive months of growth.


Scottish retail sales remain down on pre-pandemic levels

While Scottish retailers have been boosted by the relaxation of lockdown restrictions, the Scottish Retail Consortium sales monitor shows sales were down 3.6% in May when compared to May 2019. The value of Scottish retail sales in April was down by 15.6% on the same period of 2019.


Inflation climbs to 2.1% in May

The UK inflation rate jumped to 2.1% in the year to May, with this ahead of the Bank of England’s (BoE) target of 2% and the highest level for almost two years. Data from the Office for National Statistics (ONS) shows that the Consumer Prices Index (CPI) rose from 1.5% in April, with rising clothing and fuel prices driving the rate higher. The 2.1% rate recorded in May exceeds analysts’ expectations, with economists having forecast a rate of about 1.8%. Core inflation, which excludes the price of food and energy, rose to 2% in the 12 months to May. The BoE has said it expects inflation to hit 2.5% by the end of 2021 as the economy reopens following lockdown restrictions, forecasting that any climb above 2% will be temporary. Karen Ward, a chief market strategist at JP Morgan Asset Management, described May's rate as a "big upside surprise", while HSBC economist Chris Hare said it was “clearly a hawkish surprise."

Treasury launches Infrastructure Bank

The Treasury has launched a new Infrastructure Bank which it says will unlock more than £40bn of investment in the UK. It will be able to buy £5bn of equity in UK infrastructure projects, and will also be able to lend £7bn and guarantee loans of £10bn. There is currently no date by which this money needs to be spent. The bank will initially start with loans, equity and guarantees to private businesses before starting to lend to local authorities later this summer.


SMEs worried about access to finance

SMEs believe access to finance could become harder over the next three years, with the late payment of invoices flagged as an area of concern. A study by MBH Corporation found that while 40% of SME leaders believe applying for funding will become more difficult, just 10% expect the process to become easier. The study shows that 40% of SMEs plan to borrow to fund growth over the next two years. Callum Laing, CEO of MBH Corporation, said: “Access to funding is a constant worry for SMEs and being rejected can have major consequences for expansion plans”. However, noting that just 17% of businesses that applied for loans in the last year were rejected, Mr Laing said: “The good news is that experience over the past year shows that SMEs which have applied for finance have been successful.”

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