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Daily News Roundup: Thursday, 22nd April 2021

Posted: 22nd April 2021


Bailey: Diversity key to avoiding future crises

Bank of England Governor Andrew Bailey has said if more women and ethnic minorities were employed at the central bank it may have been better able to protect Britain from the financial crisis. Mr Bailey said: “As a public institution, we need to represent the diversity of the country in what we look like, who we talk to and the impact of our decisions. But, just as importantly, it helps us achieve our objectives. Improved cognitive diversity helps make for better decision making. The lack of such diversity has been highlighted as one important factor in the bank and regulatory failures of 2008.” The Bank’s latest annual report showed the share of women in senior positions rose from 17% in 2013 to 32% in 2019-20, with a target of 35% by the end of 2020. Meanwhile, only 7% of senior roles are held by people from BAME backgrounds, compared to a 2022 target of 13%. The proportion of BAME workers in more junior roles has hit a target of 20%.

HSBC manager urges change to culture of overworking

A HSBC manager recovering from a heart attack has called for the City to rethink its workaholic culture. Jonny Frostick admitted on a LinkedIn post that went viral that his first concern when he suffered a heart attack was that it would interfere with an appointment he had with his manager the next day. Hopes that his wife wouldn’t find him dead didn’t come until he’d first considered how he could secure funding for a work project. Mr Frostick said he would no longer spend all day on Zoom and would change his attitude to work adding that he felt the experience of overworking is widely shared across the Square Mile. He told Bloomberg: "This happened to me, this could happen to you. You need to change that."

Bank of England plans Leeds hub

The Bank of England is to create a new northern hub in Leeds, with a review underway to agree details on how many workers will move, the timescale of the transition, and the recruitment strategies needed to support the move. Governor Andrew Bailey said that as the country opens back up, “it is more important than ever to think about what our future working arrangements look like”. Leeds City Council chief executive Tom Riordan welcomed the move, saying the city is positioned to stake a claim as the “Whitehall of the North”, after also securing an HMRC base and the headquarters of the new National Infrastructure Bank.

NatWest won’t work with companies dealing in digital currencies

NatWest’s head of risk Morten Friis has said the bank will not serve business customers “whose main business is backed by an exchange for cryptocurrencies”, or who is “otherwise transacting in cryptocurrencies as their main activity”. Friis said. "We think of cryptocurrencies as high risk." The comments come as the bank’s chairman Sir Howard Davies insists NatWest is making financial crime detection a "key priority" but "cannot tackle financial crime in isolation". NatWest is facing criminal action by the Financial Conduct Authority for alleged money-laundering failures.

Revolut to hire 300 for India hub

Revolut is hiring 300 staff for its Indian subsidiary as part of its global expansion. The British-based digital bank app has also appointed Paroma Chatterjee, a former executive at Lendingkart and, as its chief executive in India.


Insurers favour private equity over hedge funds

A survey by Goldman Sachs Asset Management reveals that insurers will be looking to invest more money into private equity this year while scaling back on hedge funds. Private equity returns in the past 10 years "have been strong and have outperformed other asset classes," Michael Siegel, global head of insurance asset management at GSA, said, going on to point out that hedge fund returns have been "modest" in comparison, with insurers finding them expensive to hold in terms of capital requirements in some jurisdictions.


Handelsbanken reports first quarter figures

Handelsbanken has announced that first-quarter net profit increased to 4.38bn Swedish crowns ($519m) from 3.94bn in the year earlier period. The Swedish lender’s CEO Carina Akerstrom commented: "This is a quarter where everything is going in the right direction... we're keeping income high despite being in the midst of a pandemic.” Net interest income was down 5% to 7.82bn crowns from 8.23bn a year earlier.

Backing for Credit Agricole Creval bid

Credit Agricole Italia has secured majority support for a $1bn takeover of rival lender Creval, after it agreed to pay a higher price of €12.50 per share. The bid price remains below a range of €12.95 to €22.70, which Creval's board had indicated as fair, citing assessments by financial advisers Mediobanca and BofA Securities.

Wirecard given no ‘privileged treatment’, says German finance deputy

Germany’s deputy finance minister has denied Wirecard ever received “privileged treatment” from his ministry and insisted the country had learned from the scandal, boosting the power of its financial regulator.

HSBC chief vows not to ‘flip-flop’ on China strategy

Noel Quinn has promised that HSBC will not “flip-flop” on strategy every time tensions flare up between the west and Beijing stressing that the bank is “not a political organisation”.


Ryanair chief predicts full recovery for business travel

Michael O’Leary expects business travel to make a full recovery from the pandemic with the Ryanair chief’s confidence contrasting with that of other industry leaders who expect declines of up to a third. However, O'Leary said travel from the UK to the EU would become more expensive and cumbersome because of Brexit, while leisure travel would not return to normal levels until 2023. Meanwhile, the International Air Transport Association is forecasting losses of $48bn for the industry in 2021.


Kier lines up £240m equity raise

Construction services company Kier Group is looking to raise £240m from shareholders as it struggles to reduce its £354m debt pile. Kier's construction arm posted a 9% fall in revenues to £903m due to coronavirus restrictions and less output from its financial services business.


Structural adjustments needed to further Britain’s fintech success

Innovate Finance CEO Charlotte Crosswell warns in City AM that there is now a £15bn growth funding gap in the UK and structural adjustments are now necessary to address the problem. A report drawn up last year with Deloitte and the ScaleUp Institute highlighted the need for initiatives such as “a national blueprint for growth, access to patient capital, and expanding the British Business Bank to enhance its regional presence.” Although the UK has proven to be a great destination for fintech start-ups, Crosswell contends that gaps in the investment ecosystem have the potential to hamper future growth of the sector. Regulatory changes should be made to unlock capital and make listing in the UK more attractive, she adds. “We’ve done a remarkable job creating a robust and fast-growing fintech sector, and we now need to ensure we create the conditions for these businesses to scale, innovate and ultimately choose the UK for their growth journey.”

MPs call for investment ‘green labels’

MPs on the Treasury Select Committee have said that investment funds and other financial products should have “green labels” to help consumers assess their impact on the climate. The MPs said that the Treasury and the Financial Conduct Authority should consult on making labels mandatory and take steps to prevent “greenwashing”, when consumers risk being misled by products presented as greener than they are. The committee also called on the Government to come clean on its estimates of the costs of Britain achieving its 2050 net-zero emissions goal and to set out the “principles upon which the UK will fund its transition to net-zero”.

Bank of England Deputy Governor speaks out on fintech risk

Bank of England Deputy Governor Dave Ramsden has said the central bank could strengthen controls on cloud data providers and other technology firms, citing possible risks posed by fintech. Ramsden told the Innovate Finance conference: "We plan to analyse further whether we need even stronger tools to manage the risk that critical third parties, including potentially cloud and other major tech providers, may pose to the Bank's... objectives.”

Plus500 buys Illinois-based broker Cunningham

Plus500 has agreed a $30m deal to acquire Illinois-based broker Cunningham, with the transaction expected to complete in the third quarter.

Quilter boosted by inflows

Wealth management group Quilter has reported a 26% increase in AUM to £119.9bn – up £1.2bn in the first quarter from £500m a year earlier.


COVID-19 test demand boosts Roche

Swiss pharmaceuticals firm Roche has reported a 55% increase in first quarter diagnostic sales, amid continued demand for coronavirus testing products.


Pizza Express launches recruitment drive

Pizza Express is to recruit 1,000 new employees across its 360 UK eateries, including 300 posts under the Government's Kickstart initiative. Pizza Express opened 118 outlets last week for alfresco dining in gardens and terraces, with the whole chain opening next month for indoor dining in line with restrictions.

Wolseley owner turns to court in COVID-19 insurance fight

Major hospitality groups including Corbin & King and Black & White Hospitality are seeking court rulings on their business interruption insurance policies which they argue should have paid out during coronavirus lockdowns.


GMG hands back £1.6m of furlough cash

Some £1.6m in furlough money has been handed back to the Government by the Guardian newspaper. Guardian Media Group reported broadly flat total revenues of £225m on Wednesday for the 2020-21 financial year.


ONS house prices figures published

Office for National Statistics figures reveal that the average London house price was £496,000 in February, while the North East still had the lowest average house price of any region in the country at £138,000. Nitesh Patel, strategic economist at Yorkshire Building Society, commented: “Available properties appear to be getting snapped up quickly, adding upward pressure on prices. Buying behaviour continues to be dominated by the pursuit for space, with detached homes rising by 9.1% in the year to February 2021, in contrast with flats and maisonettes, which saw a 6.7% increase over the same period.”

Hammerson completes exit from retail park sector

Hammerson has sold its last remaining retail parks to Canadian investor Brookfield for £330m. The sale knocked 8% off the £357m book value the seven retail parks had been given at the end of last year. It completes the landlord’s departure from the retail park sector in the UK, with sales raising £403m so far this year. Hammerson will use the money to reduce its £2.2bn debt pile and increase liquidity.


Consumer prices edge up

The latest ONS figures reveal that inflation in March was up to 0.7% from 0.4% a month earlier, driven by the increased cost of fuel, transport and clothes. However, the reading was lower than analysts expected. The Bank of England has forecast that inflation could reach 1.9% by the end of 2021, with other experts saying it will exceed 2% before the end of year.


Super League clubs signed up to punitive exit clauses

Newly leaked documents reveal that Super League football clubs would have faced financial liabilities totalling hundreds of millions of euros for leaving the competition once it started.


Optimism for German companies in UK improves

A survey by the German-British Chamber of Industry & Commerce has found confidence among German firms with operations in the UK has increased with 20% now planning to move business activities out of the UK due to Brexit – down from 70% last autumn. Director-general of the group, Ulrich Hoppe, said: “I think there is renewed interest in the UK market and also in terms of investment in the UK market, because it is an important market,” adding that clarity over the future relationship has provided much-needed certainty.

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