TSB announces branch closures
Over a third of TSB bank branches are to shut in 2021, with 164 locations and 969 jobs affected. The move will leave the bank with 290 branches at the end of 2021, down from 475. Despite the closures, TSB insists 94% of its customers will still be located within 20 minutes of a branch. CEO Debbie Crosbie said: “Closing any of our branches is never an easy decision but our customers are banking differently – with a marked shift to digital banking. We remain committed to our branch network and will retain one of the largest in the UK.” Union Unite, which represents TSB workers, said the bank’s customers would be hit by the closures and highlighted that seven years ago TSB had more than 600 branches. Trade union Accord said it “will work closely with the bank as it continues its transformation to protect and promote members’ interests.”
British Business Bank warned of fraud risk on loan scheme
The British Business Bank warned the Government that its Bounceback Loan Scheme carried a serious risk of fraud, with then chief executive Keith Morgan writing to Business Secretary Alok Sharma ahead of the initiative’s launch in May to voice concern that it carried “very significant fraud and credit risks”. Mr Morgan warned that the scheme, which was rolled out to support small firms hit by the coronavirus crisis, was “vulnerable to abuse by individuals and by participants in organised crime.” He cited a draft review which deemed the risk of fraud as “very high”. Mr Morgan, in a second letter later in May, also raised concerns about the Government's Future Fund, which invests in start-ups.
Staley shakes up Barclays top ranks
Barclays has named Taalib Shaah its new chief risk officer at the investment bank, with CS Venkatakrishnan made global head of markets and Paul Compton promoted to global head of banking.
Dealmaking rebound drives busiest summer for M&A on record
Large-scale mergers and acquisitions hit a record in the three months to September, with figures from Refinitiv showing that the combined value of deals worth $5bn or more hit $456bn.
Fed extends curbs on buy backs
The US Federal Reserve will curb big bank capital distributions through the end of the year, meaning 34 banks including JPMorgan Chase, Citigroup, Wells Fargo and Bank of America will be barred from share buy backs and will have to cap dividends. The Fed is extending its existing policy of limiting capital payouts for banks with at least $100bn in assets.
Goldman Sachs to go ahead with job cuts
Goldman Sachs says it plans to move forward with "a modest number of layoffs", with the bank reportedly looking to cut about 400 jobs, or roughly 1% of its workforce.
Deutsche CEO: Mergers not a focus
Deutsche Bank CEO Christian Sewing has told the lender's supervisory board he is not focused on bank mergers, saying he is instead concentrating on the bank's overhaul until 2022.
Auto industry tariffs warning
Issues related to the provenance of some car parts could cause tariffs to be levied on the UK car industry, even if a trade deal is negotiated with the EU, reports claim. Mike Hawes, chief executive of trade body the Society for Motor Manufacturers and Traders, remarked: “The Government has repeatedly expressed support for our automotive industry as the nation’s biggest exporter of goods. Given its importance to the economy and livelihoods and the damaging consequences of tariffs we need the sector prioritised in negotiations, not traded off against other industries.”
Volkswagen forecasts car sales revival as it attempts to win over shareholders
Volkswagen expects orders in September to be above the levels seen last year, with CEO Herbert Diess expecting the “upward trend to continue for the remainder of the year.”
Insurers set to appeal pandemic payouts
Thousands of businesses are facing a longer wait for coronavirus-related payouts, with insurers planning to appeal this month’s landmark judgment to the Supreme Court. Seven insurers are set to ask the High Court on Friday for permission to appeal parts of its decision on whether business interruption policies were triggered by the pandemic. The Financial Conduct Authority, which launched the High Court action on behalf of businesses, will also ask to appeal aspects of the judgment. The regulator will seek permission to “leapfrog” the Court of Appeal and take the case directly to the Supreme Court as it believes this is “the fastest way to get legal clarity as quickly as possible for all parties in the event that it is not possible to resolve the outstanding issues in the coming weeks”.
European shift continues
Analysis shows that firms in the financial services sector are continuing to move staff and operations to Europe in the run-up to the end of the Brexit transition period, with more than 400 UK financial services roles relocated to Europe in the final weeks of the last quarter. The analysis suggests the total number of jobs leaving London is now above 7,500. The value of assets that have been transferred is estimated to be around £1.2trn, up from £1trn at the end of 2019.
Amundi boss targets China’s wealth management boom
French asset manager Amundi has secured regulatory permission that will allow the firm to start operating a joint venture wealth management scheme with Bank of China.
‘Multi-strategy’ hedge funds show way forward for industry
The FT reports on the success of diverse, “multi-strategy” vehicles such as those operated by Citadel, Millennium, Balyasny and Point72, which have returned over 10% on average this year.
Blackstone sells Rothesay stake for £2.1bn
Blackstone’s stake in privately owned insurer Rothesay Life has been sold for £2.1bn to US-based insurer MassMutual and GIC, with the deal valuing the firm at £5.75bn.
LEISURE AND HOSPITALITY
888 sees revenue and profits rise during lockdown
888 has raised its full-year expectations after reporting group revenue up 37% to $379.1m (£295.8m) in the six months to 30 June, compared with $277.3m in the year-earlier period. Profit before tax increased 130% year-on-year to $50.9m, with a 38% rise in business-to-consumer revenue to $361.3m.
Bookmaker chiefs set for £2.1m payout
With William Hill’s board backing a £2.9bn takeover by Caesars Entertainment, the bookmaker’s CEO Ulrik Bengtsson and CFO Matt Ashley could be in line for retention bonuses totalling up to £2.1m. Each will receive 100% of their salary at the point when William Hill ceases to be listed on the London Stock Exchange, with a further 100% six months later.
MEDIA AND ENTERTAINMENT
M&C Saatchi fails to file annual accounts
Advertising firm M&C Saatchi missed Wednesday's deadline to file its 2019 annual results. In a preliminary financial statement released in place of audited results, M&C said deeper investigation of its accounts had revealed a further £2.4m in misstated profit before tax, bumping up its total accounting error to £14m. The firm said its new auditor needed more time to analyse accounts and will complete the audit in a "matter of weeks". Shares are set to be suspended until the accounts are published.
House prices up 5% to £226,129
Data from Nationwide reveals that UK house prices were up 5% in September compared with a year ago. This marks the biggest rate of annual growth in four years. Month-on-month, prices in September were up 0.9% on August, while quarter-on-quarter, July through September saw prices climb 1.7% compared to the previous three months. The figures show that the average house price hit £226,129 in September. In London, prices were up 4.4% in Q3, with the average price in the capital hitting a record high of £480,857. Robert Gardner, Nationwide's chief economist, said the rebound in prices “reflects a number of factors”, adding: “Pent-up demand is coming through, with decisions taken to move before lockdown now progressing.” Chancellor Rishi Sunak’s stamp duty holiday, which runs until the end of March 2021, was also noted as a factor in increased market activity.
Boohoo boosted by H1 figures
Boohoo has reported first-half profits ahead of analysts’ expectations and raised its full-year forecasts. In the six months to August 31st, its revenues rose £816m, up from £565m a year earlier, and well up on the £773m average of analyst forecasts compiled by the company. Adjusted Ebitda increased 48% to £89.9m, ahead of a projected £81.2m. UK sales grew 37%, while Europe increased 40% and US revenue almost doubled.
GDP slip less severe than feared
Revised figures from the Office for National Statistics (ONS) show the economy contracted by 19.8% in Q2. Although the decline in GDP hit a record level, it is less severe than initially thought, with a previous official estimate suggesting GDP fell 20.4%. The slip in GDP across Q1 was also revised, from 2.2% to 2.5%. The analysis shows that in the first six months of 2020, the economy shrank by 21.8%, exceeding a previous estimate of 22.1%. With the coronavirus lockdown shutting much of the economy, household spending in Q2 was down £80.5bn, representing a fall of 24.2%. The ONS report also reveals that households saved a record 29.1% of their income in Q2, a steep jump on the 9.6% recorded in Q1. Meanwhile, Bank of England chief economist Andy Haldane yesterday suggested GDP is set for another record quarter in Q3, with the economy set to expand by 20%.