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Daily News Roundup: Thursday 17th May 2018

Posted: 17th May 2018


HSBC still Europe's largest bank
HSBC remains Europe's largest bank, according to research from S&P Global Market Intelligence, with €2.1tn (£1.8tn) in total assets. HSBC was followed by BNP Paribas, Credit Agricole and Deutsche Bank in fourth place. Barclays ranked sixth, with €1.3tn in assets, while Royal Bank of Scotland fell two slots to 12th place with £831bn. Lloyds Banking Group remained in ninth position, Standard Chartered in 20th, while Nationwide Building Society climbed one place to 31st.

Saudi merger boosts RBS balance sheet
Royal Bank of Scotland has taken another step towards private ownership after Saudi British Bank and Alawwal Bank, which is 40% owned by a consortium led by RBS, originating from 2007's ABN Amro acquisition, reached a preliminary agreement to merge - enabling the British bank to hugely reduce its stake.


Small US banks prepare for mortgage market push 
Small US banks are ready to take advantage of new freedoms of lending, as the biggest rollback of banking regulation since the financial crisis moves closer to Congressional approval.

ECB vice-president urges greater momentum towards banking union
The eurozone's southern members have done enough to reform their economies and mitigate financial risk for the bloc to expedite banking union, says the vice-president of the European Central Bank.

Rajan tight-lipped over Bank job
India's former central bank governor has not ruled himself out of the top job at the Bank of England when Mark Carney steps down in July next year. Raghuram Rajan, the International Monetary Fund's former chief economist, is considered a leading contender to succeed Mr Carney. "I am not going to apply for the job," he said, but refused to say whether he would reject it if approached.

UK moves closer to Zimbabwe with $100m of business loans
The UK is teaming up with Standard Chartered bank to lend $100m to Zimbabwean companies in what will be London's first direct commercial loan to the southern African nation's private sector in more than 20 years.

Fall in Japan GDP halts longest run of growth since 1989
Japan's economy shrunk by an annualised 0.6% during Q1, ending the country's longest run of growth since 1989 and dealing a fresh blow to Prime Minister Shinzo Abe.


Crest Nicholson hit by rising costs
Crest Nicholson has lowered its earnings expectations amid rising construction costs. Half-year debt more than doubled, up to £77.5m from £34.5m in the previous year, due to its increased investment in a new Midlands division. The housebuilder did see strong growth in revenue in the first six months of 2018 however, with an increase in unit completions of over 17% and forward sales 11% higher than the same period last year.


Cameron in talks for Greensill Capital role
David Cameron is said to be in talks to take on a third private sector job since his departure from Downing Street, discussing an as yet unspecified role with Greensill Capital, a London-based provider of specialist financial services, six months after it was confirmed that he would lead a new £750m "UKChina" private equity fund.

Hargreaves Lansdown defends 'unwarranted attack on investors'
HMRC is to appeal a ruling against a discount tax applied to "loyalty bonuses" given to customers of Hargreaves Lansdown (HL), which were introduced 15 years ago. HMRC says that rebates of annual charges, like loyalty bonuses paid on funds held outside ISAs or SIPPs, should be taxed as income and paid net of basic rate tax, although another decision in HL's favour could see £15m returned to investors. HL chief exec Chris Hill said: "The 'discount tax' has always been an unnecessary and unwarranted attack on private investors".

eToro to expand into US
Amid plans to launch an exchange and a digital wallet, cryptocurrency broker eToro is to expand into the US - raising $100m (£74m) to accelerate growth.


Rising costs hit Mitchells and Butler
Mitchells and Butler has revealed that profits fell £8m in the first half of the year, its £104m expenditure up over £10m from the same period last year after opening four new establishments and 220 conversions. The UK pub and restaurant manager posted adjusted operating profits of £141m, compared to £149m over the same period last year, while profit before tax fell to £69m from £75m in 2017. 

Paddy Power Betfair looking to increase US sports betting exposure
Paddy Power Betfair is in talks with fantasy sports site FanDuel to target the US after its Supreme Court struck down restrictions on sports betting. Lawmakers ruled that US states can now establish their own regulated sports betting, potentially opening up a huge new market.

Playtech, Cineworld and Jupiter hit by shareholder revolts
Playtech, Cineworld and Jupiter have suffered large shareholder rebellions as investors protested against big pay increases for the chief executives of the three companies.


Big Four plan for break-up amid Carillion fallout
The Big Four have drawn up contingency plans for a break up of their UK businesses, amid calls for the audit industry to be overhauled following the collapse of Carillion. Meanwhile, the Times reports that the Financial Reporting Council singled out Carillion for commendation as a model of good accounting practice only months before it began to implode.


Billions in new lending to first-time buyers, UK Finance says
Mortgage lending to first-time buyers increased by 2% in March, to £5.1bn, according to UK Finance, up 2% year-on-year. First-time buyer mortgages completed in the month fell 1.9% to 31,200 however, while remortgaging levels eased slightly. There was £6.1bn of new lending to homemovers in the month, 4.7% down year-on-year, UK Finance added, with 28,400 new homemover mortgages completed in the month, 7.8% fewer than in the same month a year earlier. Meanwhle, buy-to-let lending has fallen by a fifth over the past year as taxes on second homes, the removal of interest relief and tougher standards for lenders drained credit from the market.


Shop Direct vulnerable to credit crackdown 
Fears of a consumer credit crackdown have triggered a £55m sell-off in Shop Direct's debt. Amid a looming Financial Conduct Authority overhaul of high borrowing rates for shoppers, lenders to the Littlewoods and Very owner have already seen the value of their investments slump 15% since the start of the year.

Mothercare rehires sacked boss 
Mothercare is to announce that  it has rehired former boss Mark Newton-Jones just over a month after he was dismissed from his post, in a surprise move which will see him take the helm of the struggling retailer as it begins a major restructuring.


Few signs of economic improvement
Britain’s economy showed few signs of improvement in the second quarter, according to the Bank of England agents’ report into business conditions, which saw economists cut their 2018 growth targets. Meanwhile, BoE Deputy Governor Ben Broadbent has apologised after describing the UK economy as “menopausal” and past its peak. Mr Broadbent’s gaffe came in an interview in which he attempted to explain the recent weakness in productivity growth.


Number of billionaires worldwide surged last year
A new report from ultra-rich research firm Wealth-X says the number of billionaires worldwide increased by 14.9% to 2,754 in 2017, as the wealthy benefited from the “remarkable performances in equity markets and global economy.” 

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