BANKING
Banks consider Bitcoin services
Several large banks are said to be evaluating the risks of launching Bitcoin services, with Tom Robinson of cryptocurrency compliance company Elliptic saying he has seen a surge in interest from banks asking for help to assess the compliance risk involved in doing so. BNY Mellon last week announced that it would hold, transfer and issue cryptocurrencies on behalf of its asset-management clients, while Deutsche Bank has also announced plans to help hedge funds trade digital assets and Mastercard has said it plans to offer payments through a "select" group of cryptocurrencies.
Green account matches market-leading rate
App-based Tandem Bank has launched an easy-access account matching market-leading Marcus’ rate. The deal pays 0.5%, which despite being the best deal available is still below the inflation rate of 0.7%. The green account uses savers’ deposits to support carbon-reducing lending initiatives. James Blower of consultancy group Savings Guru says green incentives are proving more common as “with savings interest rates at record lows, it’s becoming increasingly difficult for banks to differentiate on price.” Saffron Building Society launched its Enviro Saver account last year, while Gatehouse launched various green saver accounts last week and Ecology Building Society, a green finance provider, also offers an easy-access account.
Cashplus aims to raise £50m
Newly-licensed bank Cashplus has launched a £50m fundraising to grow the company and meet expected demand for loans from small businesses. The move marks Cashplus' first outside investment, aside from backing from its main shareholder Trident Capital. The fintech was granted a full banking licence by the Bank of England earlier this month.
JP Morgan appoints co-head of UK investment banking
Charlie Jacobs, the senior partner of law firm Linklaters, is to join JPMorgan as co-head of UK investment banking. He replaces Ed Byers who has been promoted to vice chair of UK investment banking.
NatWest to retreat from Republic of Ireland and focus on UK
NatWest is set to withdraw from the Republic of Ireland and focus on its core UK market, with sources saying the move could be confirmed when it reports its annual results tomorrow.
PRIVATE EQUITY
BlackRock gives companies detailed climate targets
BlackRock has published a paper telling firms what it expects of them in regard to climate risk, indicating that it may vote against directors that fail to take the issue seriously.
INTERNATIONAL
Top Deutsche banker wooed clients for Wirecard months before collapse
An investigation into the collapse of Wirecard has found evidence of close ties between corporate Germany and the firm, with a Deutsche Bank executive named as having advised the company.
Call for SEC to regulate index providers as investment advisers
An academic study has suggested that providers of financial indices should be subject to stricter rules and regulated by the Securities and Exchange Commission.
AUTOMOTIVE
Ford in electrification drive
Ford is to invest $1bn in a new EV factory at its facility in Cologne in Germany, with a goal of making its European range all electric by 2030.
AVIATION
Ryanair to appeal EU court ruling on state aid to rivals
Ryanair has announced its intention to appeal after an EU court dismissed a challenge it brought over state aid awarded to Air France and SAS. The budget carrier stated: “During the COVID-19 pandemic over €30bn in discriminatory State subsidies has been gifted to EU flag carriers and, if allowed to stand, this will distort the level playing field in EU aviation for decades to come, giving chronically inefficient national airlines a leg up on their efficient low-fare competitors.”
Business travel unlikely to take off again
Jonathan Hinkles, chief executive of airline Loganair, has warned that business travel is unlikely to return to 2019 levels in the aftermath of the coronavirus crisis, saying that in the medium term he expects a recovery of around 60-65%. He said that while some sectors will see a 90%-plus recovery in business travel, across sectors like accountancy and consulting, the rate will be as little as 25-30%.
FINANCIAL SERVICES
Regulator ‘disappointed’ by Woodford announcement
Jersey's financial regulator has questioned fund manager Neil Woodford’s decision to unveil plans to launch an investment firm on the island before applying for a licence to do so. The Jersey Financial Services Commission (JFSC) said it was "disappointed" that the plans were announced before it had received or processed any application from WCM Partners. While WCM Partners as a trading name has been reserved in the Jersey Registry, the JFSC said no application to operate as a local company has been received. With Mr Woodford detailing plans for a comeback after the collapse of Woodford Investment Management, the JFSC commented: “It would be normal practice when making such an announcement to make it clear that it is ‘subject to regulatory approval’."
Brexit offers opportunity to reshape financial regulation
Bim Afolami, chair of the All-Party Parliamentary Group on Financial Markets and Services, argues that Brexit has created a unique opportunity to re-shape the UK’s regulatory framework for financial services. He says the Treasury is currently conducting a number of strategic reviews aimed at making the UK “the prime global destination for innovators.” This, he suggests, “will attract international investment and talent, creating jobs and boosting our whole economy in the process.” Mr Afolami also stresses: “It’s important to remember that this will not be a regulatory ‘race to the bottom’.”
Aviva launches cash savings platform
Aviva has launched its own cash savings platform. Aviva Save has opened with 15 fixed-rate bonds offered by Aldermore, Oaknorth and Paragon Bank in partnership with fellow cash platform Raisin. The bonds, which have terms ranging from six months to five years, pay up to 0.65% and are open to savers able to deposit £1,000 or more.
Plus500 announces share buyback
Online trading platform Plus500 has announced a buyback of as many as $25m of its shares, after reporting a pre-tax profit of $523.3m, up from $189.3m in the year earlier period. Revenue was up 146% to $872.5m.
LEISURE AND HOSPITALITY
Carnival cruises to return
Cruise firm Carnival has announced that its Italian arm Costa Cruises is "ready to set sail again.” Costa Smerelda and Costa Luminosa will re-start from March 27 and May 2, respectively, with measures including limited capacity, swab tests for all guests and crew, and temperature checks.
MEDIA AND ENTERTAINMENT
Auction Technology Group could be valued at £600m in IPO
Auction Technology Group’s planned London IPO could value the firm at £600m, with an offer price of 600p per share set as conditional dealings are expected to launch next week. The company now has £125m in cornerstone support, with BlackRock funds joining Caledonia, Jupiter Asset Management and other investors.
PROFESSIONAL SERVICES
Confidence climbs
A quarterly survey by the ICAEW shows that firms are more optimistic about a return to growth this year. The majority of the 1,000 accounts surveyed were hopeful for a return to sales growth if the pandemic is contained.
REAL ESTATE
House prices up in December
House prices saw the strongest growth in six years in the final month of 2020, figures from the Office for National Statistics show. House prices were up 8.5% year-on-year in December, hitting an average of £252,000. This compares to growth of 7.1% in November and is the highest annual growth reading since October 2014. Wales saw the highest growth, with prices rising 10.7% to an average of £184,000, followed by England with an 8.5% increase taking the average to £269,000. The increase in the UK average seen toward the close of 2020 has been driven by pent-up demand amid the initial lockdown and the stamp duty holiday, with analysts saying demand and prices may wane as the tax relief comes to an end at the end of March.
London prices dip
London’s mini property boom came to a halt in December, official figures show, with prices seeing their biggest monthly fall since the market reopened in May. The average cost of a home in the capital was down 1.1% in the month to £496,066, according to data from the Land Registry. The dip dragged the annual growth rate down from 7% in November to 3.5% in December. Property experts said the shift was likely to be caused by buyers abandoning transactions, believing they would miss March’s stamp duty holiday cut-off.
RETAIL
£176m hit for Arcadia creditors
Topshop and Topman creditors are facing losses of £176m as the Arcadia retail empire is wound up, more than double a previous estimate. Analysis shows that creditors are owed £219m in total but there are only £42.4m of assets available to pay them. The figure falls far below a November estimate by Arcadia’s administrator, which suggested £82.2m was owed to creditors – although it warned that the true amount would be much higher.
Scottish shop sales fall in January
New figures from the Scottish Retail Consortium (SRC) show total shop sales north of the Border fell year-on-year by almost 28% in January. This marks the worst monthly performance since April and the worst January reading on record.
ECONOMY
Inflation up to 0.7%
Inflation rose in January, with Office for National Statistics data showing the consumer prices index rose to 0.7% last month – up from 0.6% in December. The increase came as food retailers pushed up prices and furniture retailers and household goods stores did not offer the level of discounting seen in previous years. Andy King, the head of consumer price inflation at the ONS, said the end of the Brexit transition period did not appear to have had a noticeable impact on prices, despite border disruption. “Overall, we didn’t see anything that jumped out to us as being a Brexit effect”, he commented. Some experts have warned that inflation could exceed the Bank of England's 2% target by the end of 2021. Samuel Tombs of Pantheon Economics said January’s increase “marks the first step this year towards an above-target rate by the autumn”, while Karen Ward of JPMorgan Asset Management said inflation is expected to be at 2% by year end “but it could be higher than that". Fidelity International’s Ed Monk said the outlook for prices is “pretty confusing”, adding: “It will take a few months and an ending of current restrictions for the full picture to emerge”.
OTHER
FSB: Support overlooks 1m small firms
The Federation of Small Businesses (FSB) has warned that a million small businesses and sole traders "overlooked" for emergency coronavirus support need assistance, with one in five small companies missing out due to the way assistance has been targeted. An FSB poll of more than a thousand small business owners saw one in five said they have received no financial help from the Government amid the pandemic, while separate FSB research suggests one in two firms have not been able to gain access to a cash grant and only one in twenty had received discretionary help from their local authority. The federation has urged the Chancellor to extend cash grants and business rates reliefs and called for the threshold at which businesses start paying rates to be permanently increased. FSB national chairman Mike Cherry said that while too many small firms have been left out of support measures, “it’s not too late to bring those left out into the fold."