Challenger banks yet to win trust
Research conducted by Fujitsu shows two in five people lack trust in challenger banks, with a poll of 2,000 people seeing 40% say they do not trust challenger banks at all, while 67% are more likely to do business with banks that have branches on the high street. Some 54% of respondents were concerned technology would put their data at risk, with 49% saying these worries were the main driver behind them having no plans to adopt more digital banking services in future. The report also points to a generational divide over digital banking, with half of 25-34-year-olds excited about mobile banking, compared to 20% of those over 55. Fujitsu’s Ketan Parekh says that while technology “has taken banking by storm,” the research shows that “public trust, above all other reasons, is what’s impacting the financial services sector, and holding back challenger banks from becoming mainstream.”
HSBC set to replace investment banking boss
HSBC is reportedly planning to replace Samir Assaf, head of global banking and markets, moving him to a non-executive role. The change comes as part of a shake-up under interim chief executive Noel Quinn. The Times says possible replacements include Greg Guyett, head of global banking, Georges Elhedery, head of markets, and Gordon French, head of Asia-Pacific.
M&S Bank latest to end 5% interest deal
M&S Bank has cut the rate on its regular savings account from 5% to 2.75%, joining HSBC, First Direct and Nationwide who have recently cut rates on similar products.
Revolut hires Decote
Revolut has appointed Pierre Decote as its chief risk officer. He previously served as chief risk officer at fintech lender Prodigy Finance, and has also held senior roles at Barclaycard, Tandem Bank and Capital One.
Barclays reviewing Duke stance
With a number of firms seeking to distance themselves from the Duke of York in the wake of a widely criticised BBC interview relating to his friendship with Jeffrey Epstein, Barclays said it is concerned about the situation and is keeping its involvement with the Pitch@Palace entrepreneurship initiative under review.
Consortium buys LGC
Private equity groups Cinven and Astorg, alongside the Abu Dhabi Investment Authority sovereign wealth fund, are set to buy life sciences business LGC Group in a deal valued at £3bn. The consortium won an auction process to buy the business from KKR.
PE firm eyes Clipper
Sun Capital Partners is planning to take over fashion delivery firm Clipper, with the private equity firm said to be working with Clipper founder Steve Parkin on a £300m offer.
ECB warns over shadow banking and low rates
The European Central Bank’s (ECB) latest stability report suggests the shadow banking sector could be overexposed to a financial shock. It says: “In the event of a sudden repricing of financial assets, growing credit and liquidity risk in some parts of the euro area nonbank financial sector - coupled with higher leverage in investment funds - may lead non-banks to respond in ways that cause stress to spread to the wider financial system." The ECB also said its record-low interest rates are hitting banks' profits. Low rates, it adds, pose a threat to the eurozone's financial stability, encouraging large investors to take more risks and businesses to pile on debt.
Yes Bank under-reported bad loans by $457m, says RBI
The Reserve Bank of India has found that Yes Bank under-reported bad loans by Rs32.8bn in the most recent financial year.
Banker: Wealth tax would hit risk appetite
Josef Stadler, head of ultra-high net worth division at UBS, has warned that wealth taxes being proposed by left-wing politicians on both sides of the Atlantic would prevent billionaires from taking risks. He said the situation would be “worse than billionaires relocating,” saying: “They will say: 'If you cap my upside, then I cap my risk appetite'.”
Emirates orders $9bn aircraft from Boeing in wake of Airbus deal
Airline Emirates has ordered 30 Boeing 787-9 aircraft worth $8.8bn at list prices, with this coming after it this week placed a $16bn order with Airbus.
Norwegian Air Shuttle picks McKinsey adviser as its new chief
Norwegian Air Shuttle has appointed Jacob Schram, a senior adviser at management consultant McKinsey, as its new chief executive.
Janus Henderson fined £1.9m
The Financial Conduct Authority has fined asset manager Janus Henderson almost £1.9m for overcharging retail investors in two funds over a period of five years. Henderson Investment Funds, which is now part of Janus Henderson, was found to have levied fees on 4,700 customers who had been led to believe that their money was being actively managed between 2011 and 2016, even though it was passively tracking the market. Henderson Investment Funds was found by the FCA to have reduced its active management division after a mass redundancy programme in 2011, which meant it “no longer had sufficient resources” to manage all of its funds.
Shareholders question Aviva’s recovery plan
Aviva’s shareholders have questioned its strategic review, asking whether its targets are radical enough. The insurer set out plans for a simpler structure with more accountable divisional heads and more disciplined control of costs, with CEO Maurice Tulloch saying it will re-invest £1.3bn in the business over the next three years. Philip Meadowcroft, a private shareholder, said: “We have heard this corporate gloop too many times. This looks like a relabelling of the jam jars on the shelf.”
LEISURE AND HOSPITALITY
Zest Food reveals restructuring plan
Zest Food is seeking a CVA, asking landlords to agree to a combination of zero rent and rent reduction arrangements as part of the rescue plan. Zest, owner of healthy eating brand Tossed, is the latest casual dining chain to try and take the controversial route out of trouble, after Mexican chain Chilango last week revealed talks to secure its long-term future.
Babcock profit climbs
Defence firm Babcock has reported an increase in pre-tax profit for the first half in line with expectations, with an increase of 132% seeing it climb from £65.1m to £152m for the six months to 30 September. Revenue fell 2.7% from £2.25bn to £2.19bn. The firm said it expects underlying revenue for the year to be around £4.9bn. Meanwhile, Babcock boss Archie Bethel said private equity firms could target the firm, having been encouraged by Advent edging closer to a deal for defence firm Cobham.
MEDIA AND ENTERTAINMENT
Digital publishing revenue dips
Figures from Association for Online Publishing show digital publishing revenue slipped 3.7% to £113.1m in the second quarter, with a 15% dip in display advertising driving the fall. More positive figures were seen across online video and subscriptions, which rose 20% and 14% respectively.
BTL repossessions jump 40%
There has been a 40% rise in buy-to-let (BTL) repossessions this year on last year, according to banking trade body UK Finance, with around 800 BTL-mortgaged properties taken into possession in the third quarter of 2019 and 4,550 BTL mortgages in arrears of 2.5% or more of the outstanding balance in the same period. Separate figures from a study of around 2,000 landlords by the RLA has found that a third of private landlords are looking to sell at least one property over the next year.
House prices will trail inflation for years
UK house prices will not match low inflation until 2021, according to new research by Reuters. The continuing Brexit malaise will cause prices to fall 1.5% in London this year, Reuters said. Rod Lockhart of property finance hub LendInvest says: “We do not anticipate a material price rebound in London until at least 2022, although we may experience some recovery from 2021 – if and when the political dust begins to settle.”
New Kingfisher boss faces worsening sales decline
Kingfisher has reported a worsening fall in underlying third-quarter sales. In the three months to October 31, total revenue fell 3.2% at constant currency rates to £3bn, while like-for-like sales dropped 3.7%, compared to a first-half fall of 1.8%. Comparable sales were down 1% in the UK and Ireland; revenue fell 3.4% at B&Q but rose 3.7% at trade-focused Screwfix.
British tech sees record investment
Data from venture capital firm Atomico shows that investment in UK tech firms has more than doubled since the Brexit vote, climbing to a record high. Technology firms have secured $11.1bn (£8.6bn) in venture capital investment so far in 2019, putting the UK at the top of the pile for such investments, with the total more than the amount invested in second and third placed France and Germany combined. Investment in Britain is up 48% on 2018, while investment into Germany grew 24% to $5.8bn and French tech investment grew 41% to $4.8bn.
Late payments rise £10bn
Figures from retail payment authority Pay UK show the value of late payments to UK SMEs have risen by £10bn in a year, with firms waiting on £23.4bn compared to £13bn in 2018. Pay UK said the average amount owed to each firm is £25,000, up from £17,000 last year. Half of the firms are chasing payments, with the cost for doing so at £4.4bn. Pay UK chief executive Paul Horlock comments: “It is concerning so many smaller businesses are struggling because of late payments, especially as there are so many ways they can get paid.”
More Daves than women running funds
Figures from Morningstar have revealed more funds have a manager called David or Dave at the helm than a woman. Some 108 UK-listed open-ended funds are run by managers named Dave or David — the equivalent of 7.2% of the 1,496 funds in the market. Meanwhile just 105 funds are run by female fund managers.