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Daily News Roundup: Thursday, 21st March 2019

Posted: 21st March 2019


OakNorth triples profits

OakNorth Bank tripled its pre-tax profits in 2018 and has yet to suffer a single default, despite more than doubling the size of its loan book. The company said yesterday that profits before tax rose 220% to £33.9m last year, while total loan facilities grew 160% to £2.2bn. It comes after OakNorth was valued at $2.8bn last month, a record for a European fintech company, following a near-$400m investment by the Softbank Vision Fund.

Critics attack Tide grant

Last month’s distribution of £775m of funding to boost competition in business banking has come in for further criticism, following controversy over awards for Metro Bank and Starling Bank. According to the Standard, industry rivals are also unhappy about a £60m payment to Tide. Critics say because Tide is an IT platform which doesn't have a banking licence, and that its partner ClearBank was only recently granted one, the £60m grant is no more than a boost to Tide's venture capital investors.

Lloyds chief’s pension cut criticised by union

Lloyds Banking Group chief executive Antonio Horta-Osorio’s decision to cut his pension payments for this year has been denounced as an “obscene piece of symbolism” by a staff union. Affinity general secretary Mark Brown said the gesture was "smoke and mirrors" and shaved only a few thousand pounds off Mr Horta-Osorio’s pay packet. Meanwhile, Lloyds has scrapped a bumper pay scheme for executives at its private equity investment vehicle Lloyds Development Capital (LDC), following the sale of the NEC arena. Separately, Mirza Baig, Aviva Investors' global head of governance, has warned Standard Chartered that it faces scrutiny over pension arrangements that will hand the bank’s chief executive Bill Winters £474,000 this year.

Clydesdale Bank to meet with hunger striker

A businessman is to end a hunger strike outside Clydesdale Bank’s headquarters after the lender’s chief executive agreed to meet him. John Guidi, 63, blames Clydesdale for withdrawing funding from his property business in 2012 and then selling his loans to American investment group Cerberus in 2015. David Duffy, chief executive of Clydesdale, will discuss Mr Guidi’s grievances in person tomorrow.

Barclays agrees record sponsorship of English women’s football

Barclays is to sponsor the top tier of English women’s club football, in a deal worth more than £10m.


Inmarsat weighs £2.5bn takeover offer

Shares in satellite operator Inmarsat rose sharply after a consortium including Apax, Warburg Pincus and the Canada Pension Plan Investment Board made a £2.5bn ($3.3bn) offer. Investors in the FTSE 250 company are understood to be “reasonably positive” about the approach. JPMorgan is advising Inmarsat, while Barclays is understood to be advising the bidding consortium.


UBS cuts extra £227m from 2019 costs

UBS chief executive Sergio Ermotti said the bank will cut an extra $300m (£227m) from 2019 costs, after investment banking revenues plunged and wealth management remained under pressure in the first quarter.

Deutsche slides down European investment bank rankings

Deutsche Bank has slipped to fourth place in Europe in a benchmark ranking of investment banks - falling behind Citigroup and Goldman Sachs - according to data from Coalition.

ECB scraps clearing powers request in feud with European capitals

The European Central Bank has withdrawn a request it made in 2017 for greater powers to tackle financial stability risks in the market for euro-denominated derivatives.

Banks progress on adhering to stricter international rules

Banks are progressing towards improved capital and liquidity standards, according to the Basel Committee on Banking Supervision's latest survey, ahead of strict new rules coming into force before 2027.

Fed rules out rate rise until 2020

The US Federal Reserve does not expect to raise interest rates for the rest of 2019 amid slower economic growth.


BMW warns on 2019 profits

BMW has warned that currency movements and technology investments in automated vehicles will eat into its profits this year as it revealed a €12bn cost-cutting plan.

Toyota to build new Suzuki car in UK

Toyota has confirmed it will start manufacturing hybrid cars for Suzuki at its plant in Burnaston, Derbyshire, as part of a global co-operation deal between the rivals.


Kier plunged into the red

Kier's ongoing restructuring programme cost the builder £14m in the six months to the end of December - raising corporate costs by 55%. The group reported a loss of £35.5m.


UK and EU financial watchdogs to co-operate in event of no-deal Brexit

The Bank of England and the Financial Conduct Authority have signed a memorandum of understanding with the European Banking Authority to share information and co-operate if there is a no-deal Brexit. The BoE’s Sam Woods said: "These agreements will ensure our continued cooperation in carrying out our supervisory responsibilities. We have enjoyed a strong working relationship with our European partners... I am confident that this will continue."

Simplybiz acquires Defaqto

AIM-listed compliance and business services provider Simplybiz has acquired financial adviser fintech firm Defaqto for £74.3m. The move will create a single fintech and support services group, and also boost earnings during the first year.

Boss of London Capital & Finance arrested after firm’s collapse

London Capital & Finance chief executive Andy Thomson and London Oil & Gas chair Simon Hume-Kendall are among those arrested as part of the investigation into the collapsed firm.

Post-Brexit trade ruling sparks accusations of a ‘land grab’

European fund managers have called on Esma to reconsider plans that would prevent them from trading some of Britain’s biggest stocks in London if there is a no-deal Brexit.

Growing payments firms may pose systemic risk

The FT’s leader argues that the rapid transformation and soaring valuations of payments processing firms pose a challenge to regulators, who must keep pace with the innovation in digital money.


Manufacturing output growth slumps

UK manufacturing output growth slowed to its weakest level since May 2018 in the past three months, according to the latest industrial trends survey from the Confederation of British Industry (CBI). Industrial orders dropped to a balance of +1 this month, with 27% of manufacturers surveyed reporting that order books were above normal and 26% below normal.


Disney completes 21st Century Fox takeover

Disney has closed its $71bn (£54bn) takeover of Rupert Murdoch's 21st Century Fox. The deal places Disney in a strong position ahead of the launch of its streaming service later this year, which could challenge the dominance of Netflix and Amazon.


House price growth at slowest rate for six years

ONS figures reveal house prices in Britain grew at the slowest pace in six years in January. Average house prices rose by 1.7% to £232,000 in the year to January, slower than the 2.2% growth recorded last December.


Kingfisher CEO steps down as profits fall

Kingfisher's pre-tax profits declined 13% to £693m in the year to January 31. The DIY group also revealed that chief executive Véronique Laury is to depart the business before the end of a five-year restructuring programme.


Inflation rises in February

Food and alcohol price rises helped push inflation higher in February, the first rise since August 2018. The rate of price changes, measured using the Consumer Prices Index (CPI), rose to 1.9%, from 1.8% in January. House prices are rising at their slowest rate for almost six years, the ONS said. Inflation overall was "stable", with rising food and alcohol prices offset by slower price rises in clothing and footwear, it added.

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