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Daily News Roundup: Thursday 19th April 2018

Posted: 19th April 2018



Clydesdale Bank ring fences extra £350m for PPI claims

Clydesdale and Yorkshire bank is setting aside a further £350m to handle a surge of unexpected PPI claims. The announcement by the bank came after the group saw 59,000 claims in the six months to 31 March. Gary Greenwood, analyst at Shore Capital, said the news was a "bit of a disaster for CYBG, with the original indemnity provided by National Australia Bank failing to provide the full protection that it was originally anticipated to deliver".

HSBC lowers income requirement for Premier account

HSBC has reduced the income requirement on its Premier current account from £100,000 to £75,000 and will now offer discounts to the children of account holders. Customers can also qualify for the account if they have savings or investments of at least £50,000 with HSBC in the UK. The bank said the changes were due to customer feedback, as existing account holders were asking for benefits such as the mortgage discounts to apply to their children as well. Separately, Lloyds Bank’s private banking division has announced plans to reduce its exposure to bonds as their value is set to fall.

Metro Bank faces growing investor rebellion

Metro Bank is facing a growing shareholder rebellion over payments made by the lender to chairman Vernon Hill’s wife’s architecture firm. Investment adviser Glass Lewis has joined asset manager Royal London in setting out their opposition to Mr Hill’s re-election as chairman at next week’s AGM. The bank paid nearly £4.6m in fees last year to InterArch, owned by Shirley Hill.

BoE delayed crack down on credit

The Bank of England was "three months late" in cracking down on consumer credit, one of its most senior policymakers has said. Martin Taylor, who sits on the FPC and is a former chief executive of Barclays, told MPs that he had been more apprehensive than his colleagues over the rapid rise in credit card debt, car loans and personal loans in 2016.

Sherborne makes gains on Barclays stake

Activist investor Sherborne has started to make small gains on its 5% stake in Barclays - but stands to potentially make more if its founder Edward Bramson secures a seat on the bank’s board, as he has done in past turnaround cases.


Morgan Stanley reports record profits

Morgan Stanley has become the latest US bank to report record profits in the first quarter, thanks to tax cuts and cost-cutting. The bank reported net revenues of $11.1bn for the quarter ending 31 March, up by 14% compared to the year before. “We delivered very strong results this quarter, with record revenues and net income – and an ROE above our target range,” said James Gorman, Morgan Stanley's chairman and chief executive. The news comes as several US banks have announced buoyant first-quarter results in what Donald Trump has called "one of the greatest booms ever", for the US economy with consumer confidence at "an all-time high".

Deutsche Bank COO Kim Hammonds steps down

Deutsche Bank has lost another senior executive, with chief operating officer Kim Hammonds leaving her post amid an ongoing management reshuffle. Ms Hammond was a close ally of Deutsche’s recently departed chief executive John Cryan and her leaving is seen as further evidence of growing turmoil at the top of the bank.

Santander chair calls EU rules on payments unfair

Ana Botín, executive chairman of Santander, has called for the EU’s flagship new payments regulation to be reformed to avoid hampering banks’ ability to compete with large technology groups.


Telford Homes anticipating record profits on London shortage

Housebuilder Telford Homes is expecting profit before tax to be up by more than 30% for 2017/18 thanks to London's housing shortage.


Transferwise joins Faster Payments

Transferwise, which provides forex services, has joined the UK's Faster Payments system - a landmark step which the Bank of England hopes will boost competition in the payments sector. The fintech unicorn will no longer have to rely on other banks to transfer money, potentially cutting out a layer of costs.

Jupiter spinning after bond exodus

Combined with a £2bn negative performance swing, assets under management at Jupiter dropped to £46.9bn at the end of March, from £50.1bn on December 31. The fund manager watched £15m leave every day on average last quarter, some £1.25bn, after an exodus from bond funds. An unnamed institutional customer also pulled £400m from a fund.

ICE to begin futures trading on alternative rate intended to replace tarnished Libor

Intercontinental Exchange will trade futures on the alternative benchmark rate intended to supplant the scandal-hit Libor, saying it would launch 3-month futures contracts based on the Sterling Overnight Index Average.

Bank of England cryptocurrency would not be popular

Around 60% of Britons would not support a Bank of England-backed cryptocurrency linked to the pound, new research has revealed. However, approximately one-third of people said they would be “more likely” to invest in bitcoin if the UK Government regulated the crypto sphere.

Banks look to the stars in search for bad trades

Machine-learning technology used in space missions could soon be used to reduce the risk of bad trades after the European Space Agency agreed a collaboration with the financial services industry.


De La Rue abandons passport appeal with profit warning

Abandoning its plan to appeal against the government's decision to award a contract to make UK passports to a Franco-Dutch company, De La Rue has issued its second profit warning in less than a month, saying income will be around £60m to £65m. Chief executive Martin Sutherland initially called the decision to award the £490m contract to rival Gemalto "shocking" and pledged to appeal but on Wednesday told the BBC's Today programme: "We've done our homework, we've taken legal advice, we've looked at, frankly, the likelihood of overturning the decision and the sensible thing for us to do is to refocus our efforts elsewhere and to move forward."


London prices see first annual drop since 2009

Data from the ONS shows London house prices fell 1% on the year in February, the first decline since September 2009. The average value of a home in the capital dropped to £471,986. Across England, prices rose by 4.1% to an average of £242,176 in the year to February. In Wales, house prices rose by 4.8% to an average of £153,000. In Scotland, the average price increased by 6.2% to £144,000, while in Northern Ireland prices rose by 4.3% to an average of £130,000.


Fears for fashion chain New Look

New Look faces further troubles after HSBC pulled out of insuring its suppliers, suggesting the lender is growing increasingly concerned about risks at the chain. The bank is no longer offering credit protection, which covers suppliers' bills if a retailer folds.


BBC loses overseas cricket to Talksport

The BBC has lost the radio rights to England's upcoming cricket tours of Sri Lanka and the West Indies to TalkSport - the first time since 2005 that the BBC's Test Match Special has not covered an England overseas tour.


Inflation lowest in a year

UK consumer price inflation fell in March to 2.5%, from 2.7% in February, according to the Office for National Statistics, the lowest rate in a year. Prices for clothing and footwear, in particular womenswear, rose at a slower rate compared to this time last year, while alcohol and tobacco also helped ease inflation pressures. The new data may raise doubts over predictions that the Bank of England is set to raise interest rates in May. Meanwhile, the surprise drop in inflation led to the pound falling almost one cent against the dollar.

Global debt rising

The International Monetary Fund has warned that the global economy is in more debt than it was before the financial crisis, and that risks to global financial stability have increased.

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