BANKING
Banks chosen to join RBS competition scheme
Eleven banks have been chosen to join the £350m scheme to encourage small businesses to move away from RBS in a bid to boost competition. Challenger banks Monzo, Metro and Starling, as well as Santander, Co-operative and TSB, were selected by the Banking Competition Remedies body (BCR), along with Clydesdale Bank, Arbuthnot Latham & Co, Hampden & Co, Nationwide Building Society and Svenska Handelsbanken. Funding amounts will be revealed in February, while RBS will also receive £75m to cover the cost of customers switching. BCR chairman Godfrey Cromwell said the announcement “marks an important milestone for incentivised switching.” He added: “We anticipate a further application round in next year’s second-quarter will widen the range of offers still further.”
Santander fined over deceased customers' accounts handling
The Financial Conduct Authority has fined Santander £32.8m for “serious failings” in processing the accounts of deceased customers. More than 40,000 customers were affected by the bank failing to transfer more than £183m to the beneficiaries of deceased customers when it should have done. An internal review found that the longest period that accounts remained open after a customer’s death was 21 years. FCA executive director of enforcement Mark Steward said that the failings “took too long to be identified and then far too long to be fixed”, but added: “To the firm’s credit, once these problems were notified to the board and senior management, they were fixed properly and promptly.”
Campaigners question RBS pay gap
Gender equality campaigners have questioned RBS’ decision to pay its first female CFO up to £400,000 less than her male predecessor, with it revealed that Katie Murray will earn a maximum of £3.1m a year if she hits bonus targets while former finance chief Ewen Stevenson’s maximum payout was £3.5m a year. Sam Smethers of the Fawcett Society said: “RBS needs to be clear of any objective reason for the differences in pay and reward. At first glance she may have an equal pay claim.”
Building society boss steps down
The Scottish Building Society has announced that chief executive Mark Thomson is stepping down after nearly seven years. Chairman Raymond Abbott said the board is disappointed by the decision but pleased that Mr Thomson has agreed to stay on until his successor is recruited, “which we hope will be in summer 2019."
PRIVATE EQUITY
CVC snaps up Premiership Rugby stake
CVC Capital Partners has bought a minority shareholding in Premiership Rugby in a deal worth around £220m. CVC, which will hold 27% of Premiership Rugby, had initially sought a majority stake, having previously made a bid of around £275m for a 51% share. The investment is expected to complete in the first quarter of 2019.
TPG to invest up to £500m into new breed of pension superfund
TPG is to put up to £500m into Clara-Pensions, with the investment to help the superfund take over corporate schemes. TPG will invest an initial £225m via its credit investment platform Sixth Street Partners.
INTERNATIONAL
Bank wind-down payment for Ireland
Prime Minister Leo Varadkar has said Ireland will receive an additional €600m from the wind-down of Anglo Irish - the bank at the heart of its 2010 financial crisis. The payment comes from the wind-down vehicle of Anglo Irish, the Irish Banking Resolution Corporation. It completes a €1.2bn claim by the state, with much of the €30bn bailout never to be recovered.
Ten arrested over Danske Bank probe
Estonia’s state prosecutor Marek Vahing has announced that ten people have been detained in the country in relation to an investigation into money laundering at Danske Bank. The prosecutor revealed that former client relationship managers and the head of a division of Danske Bank have been arrested, saying: “There is reason to suspect that the detainees knowingly enabled bank clients to move funds suspected of being laundered”.
Natixis shares punished after Asian derivatives hedging proves deficient
French investment bank Natixis says Q4 revenues will be 10% lower than the same period last year, with a strategy designed to hedge risks linked to equity derivatives having proved "deficient".
Bank in payment platform deal
The Commonwealth Bank of Australia has linked with China’s Alipay in a deal that will enable Chinese tourists to use the mobile payment platform while in Australia.
AVIATION
Virgin interest sees Flybe shares take off
Virgin Atlantic has indicated that it is still considering a takeover bid for struggling low cost airline Flybe, sending shares in Flybe up by 10.5%. Shares in the airline hit an all-time low last month, dipping almost 75% compared to a year earlier, but stock has risen 45% since it put itself up for sale in November, with Southend Airport owner Stobart Group and British Airways’ parent IAG also said to be interested.
FINANCIAL SERVICES
Customer loyalty worth billions, CMA says
The Competition and Markets Authority (CMA) has warned that almost 12m customers staying loyal to the same service provider are potentially losing out on £4bn each year. The competition watchdog investigated a "super-complaint" from Citizens Advice and found “damaging practices” in the cash savings, mortgages, household insurance, mobile phone contract and broadband markets. The CMA has suggested new powers to cap prices and impose fines should be handed to regulators such as the Financial Conduct Authority.
EU's no-deal Brexit measures include financial services guidance
The European Commission has escalated its contingency plans for a no-deal Brexit scenario and offered long-awaited clarity to the financial services sector over clearing. Among 14 measures to minimise disruption, the Commission confirmed that EU firms would be granted temporary access to London clearing houses for a period of 12 months after March 29. City of London Corporation policy chair Catherine McGuinness said: “The Commission now needs to take steps to address the significant risks to data transfers and contract continuity for insurance and uncleared derivatives at an EU level.”
Sector warned over unacceptable conduct
The Financial Conduct Authority has warned firms that it will take action over any kind of misconduct, financial or otherwise, after a 220% rise in complaints to it about "non-financial behaviour" in the past 12 months. These relate to a range of unacceptable conduct, including sexual harassment and bullying. The financial regulator received 64 reports of discrimination, harassment and racism in 2018, up from 20 in 2017.
Direct Line dialling in L&G insurance unit bid
Along with a number of other insurers and financial investors, Direct Line is considering a £400m bid for Legal & General Group's general insurance unit, according to Sky News.
HEALTHCARE
GSK announces consumer health venture with Pfizer
In a move expected to bring in sales of approximately £9.8bn, UK pharma giant Glaxosmithkline (GSK) has entered into an agreement with US rival Pfizer to combine their consumer health businesses. GSK said the joint venture will take the top spot in global market share in "over the counter" products, at 7.3%, and is expected to provide it with annual savings of £500m by 2022.
LEISURE AND HOSPITALITY
No corporation tax for Caffè Nero for over a decade
Almost £600m of debt held Caffè Nero from paying corporation tax on annual sales of £334m last year, the 11th straight year that the coffee chain has not paid tax on corporate earnings. While sales for the year rose 7%, its annual interest bill was £40m, resulting in a pre-tax loss of £26m for the year to May 2018.
MANUFACTURING
Factory orders increased in December
The CBI has said that factory orders grew for a second month in a row in December after a sharp slowdown in October, but the prospect of a no-deal Brexit is a growing worry for manufacturers. A rebound in export orders helped the CBI’s monthly order book balance show a positive reading of +8, a touch weaker than November’s +10 but well above average levels. A measure of expectations for the three months ahead rose to +14, its highest level since September.
REAL ESTATE
House price growth slows to five-year low
UK house price growth has hit a five-year low, according to the Office for National Statistics and the Land Registry, with London weathering the lowest annual growth in the country at -1.7%. Annual growth in October was 2.7%, slowing from 3% in September, while average prices fell by 0.2% between September and October, taking the average UK house price to £231,000. The strongest annual growth (4.9%) was recorded in the North West, while growth in the North East dropped to -0.1%.
ECONOMY
Inflation hits 20-month low
Inflation fell to a 20-month low in November, with figures from the Office for National Statistics showing that the Consumer Prices Index fell to 2.3%, compared with 2.4% in October.
OTHER
HMRC rules crypto investors will pay capital gains tax
HMRC has ruled that crypto investors cannot classify their investments as "gambling" winnings which would have been tax-free. In a long-awaited policy update, HMRC said crypto assets counted as "chargeable assets" for capital gains tax "if they were both capable of being owned, and had a value that could be realised."