BANKING
Tensions over pandemic lending continue
Banks are coming under increasing pressure to publish daily lending figures under the Coronavirus Business Interruption Loan Scheme (CBILS) so officials can better understand how cash is being distributed. Santander, Barclays and Lloyds have ignored requests from MPs and business leaders, the Mail asserts. The Treasury Committee and the all-party parliamentary group (APPG) on fair business banking have written to the British Business Bank, which administers CBILS, asking it to push lenders into revealing figures. Specialist business finance company Rangewell is also calling for more transparency, asking the Chancellor to institute a real-time monitoring process. The Mail’s Alex Brummer says the main problems with the scheme could be fixed if the government took 100% of the risk.
Coronavirus text scams blocked in fightback against hackers
Amid an increase in scams aimed at exploiting the coronavirus pandemic, banks and mobile phone firms are reporting successes in the fight against hackers. Some 400 sender IDs have been blocked from sending fake text messages impersonating trusted organisations as a result of collaboration involving the National Cyber Security Centre, among others. Katy Worobec, managing director of economic crime at UK Finance, advised: "We would urge consumers to be on their guard against criminals exploiting the COVID-19 outbreak to commit fraud. Always follow the advice of the Take Five to Stop Fraud campaign and avoid clicking on links in any unsolicited text messages in case it's a scam.”
RBS introduces companion card
Royal Bank of Scotland has launched a new "companion card" for existing current accounts that be topped up by £100 and given to a trusted person to enable them to make purchases for them during the pandemic.
PRIVATE EQUITY
Virgin Australia attracts interest from over 10 firms
Virgin Australia has attracted interest from over 10 parties including private equity groups Apollo Global Management, Oaktree Capital Management and BGH Capital after entering voluntary administration earlier this week.
INTERNATIONAL
Monzo applies for banking licence in US
Digital banking start-up Monzo has applied to the US Office of the Comptroller of the Currency for a banking licence, ahead of plans to increase the number of its employees in the country. TS Anil, the firm’s US chief, stated: “By applying to be one of the first new US banks in a decade, we’re aiming to provide Americans with a better banking alternative. Monzo will be fair, transparent, and will bring many of the features that our UK customers love to the US market.” The firm started operating a trial of its banking app in the US in partnership with Ohio-based Sutton Bank last year.
Record bond demand in Europe
With more governments selling debt to finance coronavirus stimulus programmes, Spain has received record orders of over €97bn ($105.4bn) for a 10-year bond via a syndicate of banks. Spanish and Portuguese 10-year yields were up 14 - 16 basis points to 1.17% and 1.32%, respectively. Richard McGuire, head of rates strategy at Rabobank, commented: "The ability to flip these bonds onto the ECB (European Central Bank) is ensuring there is strong demand for this issuance, but with the scale and immediacy of virus-related fiscal pressures leaving sovereigns without the luxury of choosing when to fund themselves, governments are clearly price-takers.”
ECB to accept some junk-rated bonds as loan collateral
The European Central Bank (ECB) has said it will accept some junk-rated debt as collateral for loans to banks as it seeks to avert a eurozone debt crisis. The move means that any bonds rated at investment grade on April 7 will continue to be eligible even if they are downgraded below the triple-B level by the main credit rating agencies. Meanwhile, the European Commission is understood to be drafting a €2trn rescue plan for the EU.
AVIATION
Airline aid ‘should be linked to emissions reduction’
European airlines have applied for a total of €12.8bn (£11.3bn) in government aid since the coronavirus crisis began. Andrew Murphy, aviation manager for Transport & Environment, urged countries to seize the opportunity to force carriers to do more to protect the environment, commenting: “Airlines are seeking public money so they can get back to the business-as-usual of soaring emissions enabled by light-touch pollution laws and tax exemptions. It’s time to ensure that aviation makes a green transition by linking aid to taxes and greener fuels which will reverse the sector’s rapid emissions growth.”
Delta cannot help Virgin Atlantic
Delta has ruled out helping Virgin Atlantic citing the conditions of its bailout by US authorities. The US airline owns 49% of the British firm which is continuing rescue talks with the UK government.
CONSTRUCTION
Rics: Construction sector activity plummets
Workloads in the construction sector fell to their lowest level in almost eight years in the first quarter, according to the latest Royal Institution of Chartered Surveyors data, which recorded a sharp fall in activity as social distancing was introduced.
FINANCIAL SERVICES
Hiscox facing legal action over pandemic payouts
Coordinated legal action against Hiscox is being planned by over 100 nightclubs, pubs and bars over the insurer’s non-payment of business interruption insurance claims. Michael Kill, chief executive of the Night Time Industries Association (NTIA) coordinating the action, remarked: “Businesses are being denied legitimate insurance claims, many claims are being disputed by insurers based on contrived arguments to avoid sharing the financial burden during the COVID-19 crisis.” Two separate Hiscox action groups, together involving some 200 further claimants, are also considering taking legal action.
Travelex for sale in latest blow to parent Finablr
British forex group Travelex has asked consultants to seek offers for the group, with the COVID-19 outbreak adding to woes stemming from a damaging cyber-attack at the start of the year.
Interactive Brokers takes $88m loss from crude futures collapse
Shares in Interactive Brokers fell around 8% on the collapse in value of short-term oil futures contracts, while an inquiry into the group’s anti-money laundering and privacy practices continues.
Investors pull record €250bn from European funds
Investors in European mutual funds redeemed €246bn in March, amid a near-€1trn drop for long-term funds as assets fell from €9.5trn at the end of February to €8.2trn.
Hedge funds suffer worst quarterly outflows since financial crisis
Investors pulled $33bn from hedge funds in the first quarter - the highest outflow since the Q2 2009 - following increased market volatility and uncertainty during the coronavirus pandemic.
HEALTHCARE
Roche chief criticises under-investment in UK healthcare
Severin Schwan, Roche’s chief executive, has criticised British healthcare investment and testing infrastructure as the coronavirus pandemic continues, as the firm installs new testing infrastructure in the UK.
LEISURE & HOSPITALITY
Travel groups ‘breaking law on refunds’
Which? has claimed that travel firms are illegally withholding up to £7bn in cash refunds after holidays were cancelled as a result of the coronavirus pandemic. Operators including Tui and Jet2 Holidays, and airlines including British Airways and easyJet, were found to be failing in their legal duty to refund money for trips affected by coronavirus within 14 days.
Heineken scraps dividend and bonuses as lockdown bites
Heineken has cancelled its interim dividend and executive bonuses after the coronavirus pandemic saw net profit fall over two-thirds in the first quarter to €94m from €299m a year earlier.
MEDIA & ENTERTAINMENT
Arqiva takeover cleared by CMA
The Competition and Markets Authority (CMA) has cleared a £2bn takeover of Arqiva’s telecoms infrastructure division by Spain’s Cellnex. Arqiva chief executive Paul Donovan commented: “Arqiva is now fully focused on strengthening its position as the UK’s number one broadcast and machine to machine infrastructure solutions provider, particularly at a time when these critical services are showing their value and relevance so strongly.”
RETAIL
Boohoo enjoys FY sales increase
Boohoo has reported a 44% surge in full-year sales, to £1.23bn, with pre-tax profits rising 54% to £92.2m. The retailer’s main Boohoo label saw sales rise 38% to £600m in the year to the end of February, while Pretty Little Thing revenue was up 38% to £516.3m, and recent acquisition Nasty Gal sales doubled to £98m.
SPORT
Saudi bid for Newcastle ‘should be blocked’ – BeIN
BeIN Media has called for a proposed £300m Saudi takeover of Newcastle United to be blocked, citing concerns about piracy. Yousef al-Obaidly, chief executive of Qatari media network BeIN stated: “In light of the Saudi Arabia government’s facilitation of the near three-year theft of the Premier League’s commercial rights - and in turn your club’s commercial revenues - through its backing of the huge scale BeoutQ pirate service, I would strongly suggest that you fully interrogate this deal, and ask the Premier League to do the same, as a matter of urgency.” However, Oliver Dowden, the Secretary of State for Digital, Culture, Media and Sport, declared he was "content" for the Premier League to approve the deal if it passed their tests.
ECONOMY
Inflation set to continue downward trend
Inflation was down in March as oil prices fell and the coronavirus kept shoppers away from stores. The Consumer Prices Index (CPI) inflation rate was 1.5% for the month - down from 1.7% in February, according to the ONS. Robert Alster, head of investment services at Close Brothers Asset Management, noted: "A collapse in consumer demand combined with plummeting oil prices meant that declining inflation in March was inevitable, and is likely to continue through the duration of the COVID-19 crisis.”
Confidence evaporates among Europe’s crisis-hit consumers
Consumer confidence has dropped to its lowest level since the financial crisis in the eurozone with the European Commission’s measure of household morale plummeting to -22.7 for April, from -11.6 in March. Melanie Debono, Europe economist at Capital Economics, predicts consumer spending to fall by 12% over the whole year - compared with a drop of only 1% in 2009.