BANKING
Gilbert says fintech can boost financial inclusion
Martin Gilbert has backed calls at Davos for a greater commitment to fintech, arguing that it will have an increasingly disruptive effect on all industries, including financial services. "It's also going to help us tackle climate change,” he added, "But I am equally passionate about financial inclusion, particularly when there are about 20 million people in the UK who don't even have a bank account.” Gilbert joined Revolut in January and is due to step down from the board of Standard Life Aberdeen in May.
Close Brothers shares fall
Close Brothers saw its shares fall 4.8% yesterday after a trading update showed the lender’s loan book remained flat, while modest growth in its commercial arm was offset by a decline in the property business. The London-listed merchant bank said that “costs are expected to continue to grow” in the coming year as it invests in “strategic initiatives to protect and grow our business”.
Staley declares victory over Bramson
Jes Staley told an audience at Davos that activist investor Edward Bramson had “pulled back” from his quest for radical change at Barclays and that the investment bank was “here to stay”. Mr Staley also warned that the "effectiveness of even looser monetary policy is losing its grip" and that low interest rates are putting pressure on retail banking profit margins, which could hurt lenders and their ability to support the economy.
Metro could be leaderless until probes end
City analysts have warned that Metro Bank could be left without a permanent chief executive or chairman until the probes by the BoE and the FCA into its loan miscalculation are complete. Ian Gordon at Investec commented: "Given an absence of certainty, Metro has little option but to manage 'business as usual' in the intervening period."
Lloyds to charge 50% for overdrafts
Lloyds Banking Group is to start charging customers a 39.9% rate for overdrafts from April. However, some customers will be charged 49.9%, according to reports. New rules brought in by the FCA mean banks have to stop charging higher prices for unauthorised overdrafts than for authorised ones.
Banks urged to join Visa cashback scheme
Visa is trying to encourage more banks to join a scheme, which it piloted with Lloyds Banking Group last year, to encourage shops and businesses to offer cashback to customers using their debit cards.
Tesco Bank to create 120 tech jobs
Tesco Bank is to hire 120 more software and systems engineers for its Edinburgh and Newcastle operations as the company seeks to “better meet the needs” of its customers.
PRIVATE EQUITY
Liberis raises £32m to finance growth
Liberis has raised £32m in a funding round led by investment firm FTV Capital. The London-based fintech lends to small businesses against their future debit and credit card sales. Liberis will use the cash to help fund its growth and expansion in the US and Europe.
INTERNATIONAL
European Banking Authority plans overhaul of EU bank stress tests
A planned overhaul of stress tests carried out by the EBA will give lenders more control over how they model results, on condition that they explain why they have deviated from existing frameworks.
Singapore’s new digital banks face uphill struggle
Singapore’s virtual lenders face an uphill struggle converting customers in “one of the best-served and heavily banked markets in the region” but could use the city-state as a springboard for other Asian markets.
McFarlane joins Westpac
Former Barclays chairman, John McFarlane, who stepped down from the bank's board last year, will be appointed today to the same position at Australian lender Westpac.
AUTOMOTIVE
JLR cuts 500 jobs from its Halewood factory
Jaguar Land Rover is to cut 500 jobs at its Halewood factory, near Liverpool, as part of moves designed to “optimise performance, enable sustainable growth and safeguard the long-term success of our business”. The Halewood plant has 4,000 workers and makes the Range Rover Evoque and Land Rover Discovery Sport models.
Daimler sees full-year earnings fall by half
Daimler saw operating earnings fall by half in 2019 to €5.6bn from €11.1bn in 2018. Profit at the German company’s Mercedes-Benz unit halved and Daimler also announced additional charges of up to €1.5bn for regulatory and legal issues related to its diesel models.
Tesla’s market capitalisation passes $100bn
Tesla shares rose over 8% yesterday to hit an intra-day high of $594.48, taking the electric carmaker’s market value to $106bn. Strong car delivery numbers and the opening of its first giga-factory in China have seen Tesla shares double in value over the past three months.
CONSTRUCTION
Berkeley to double investor returns
Housebuilder Berkeley has announced plans to almost double investor returns to £1bn via share buybacks or dividends - £500m in March and the same amount a year later. The move represents an increase of £455m on previous arrangements. Berkeley also said it plans to boost production of new homes significantly over the next six years. The FT's Lex suggests that the cautious move is "as damning a sell signal as you could get".
FINANCIAL SERVICES
City watchdog pledges tougher line with asset managers
The Financial Conduct Authority has pledged to crack down on conflicts of interest and risk controls at asset management companies in the wake of the Neil Woodford scandal. In a letter to asset managers, the regulator highlighted governance, conflicts of interest and liquidity mismatches as areas in need of improvement. The FCA’s warning to asset managers comes a day after it addressed a similar warning to financial advisers.
Brussels to hold financial services hostage under equivalence regime
The Telegraph reports that the European Commission has drawn up a list of UK financial services that could have access to the EU market removed as Brussels seeks to leverage equivalence rules in negotiations with Britain. The paper suggests that by “pinpointing specific industries and sparing others, the EU would be able to ensure its continued access to vital clearing services and global capital markets”.
Financial regulators will need more scrutiny after Brexit, report claims
A report from the International Regulatory Strategy Group (IRSG) and Linklaters says the Government should ensure financial regulators are adequately scrutinised after Brexit to ensure UK rules take into account international finance standards. Giving parliament more oversight would make up for the loss of "peer review from other EU financial regulators" the report said.
Rolet exits as CQS chief
Xavier Rolet has given up his role at Sir Michael Hintze's hedge fund CQS after just a year in charge. The former boss of the London Stock Exchange will remain as a strategic adviser.
Hedge fund Monterone buys out early-stage investor
London-based hedge fund Monterone Partners has triggered a clause allowing it to buy back the right to a share of its revenues from Stride Capital Group.
LEISURE & HOSPITALITY
Wetherspoon reports rise in both sales and debt
JD Wetherspoon has reported a 4.7% increase in like-for-like sales in the three months to 19 January, with a 4.2% increase in total sales. However, the pub chain also announced that net debt will rise to between £780m and £820m as a result of a rise in capital expenditure on share buybacks and property.
MANUFACTURING
UK manufacturers upbeat amid poor figures, CBI says
New orders among UK manufacturers fell at their fastest pace since the financial crisis in the three months to January, according to the Confederation of British Industry's (CBI) latest survey. Its confidence gauge however, the difference between businesses reporting higher rather than lower optimism, recorded its biggest swing since the survey began in 1958 - taking confidence to its highest level for almost six years.
MEDIA & ENTERTAINMENT
Probe into takeover of i newspaper confirmed
The government has confirmed an investigation into the £50m takeover of the i newspaper by DMGT, with Culture Secretary Nicky Morgan stating that there may be pubic interest concerns over media plurality. The CMA and Ofcom will now conduct probes into the takeover.
REAL ESTATE
Jon Hunt's Albert Embankment development approved
Foxtons founder Jon Hunt has won planning approval for a new luxury venue on the Albert Embankment. His Ocubis property firm, which will now consider its options in relation to whether to build out the scheme or sell the site, plans to create a 600-bedroom hotel close to Vauxhall station.
RETAIL
Retail jobs fall by 57,000 last year
Some 57,000 retail jobs were cut during 2019, with a 1.8% year-on-year fall in the total number of retail sector employees during the fourth quarter last year. This equates to over 150 job losses every day, during the worst year for retailers on record.
Ted Baker warns of £58m writedown on inventory error
Ted Baker shares fell about 10% yesterday after the retailer revealed that an independent review found it had overstated its stock by £58m - more than double previous estimates. Ted Baker now expects to report full-year profits as low as £5m for 2019, down 90% on the year before.
ECONOMY
UK borrowing falls
UK government borrowing in December was lower than expected, at £4.8bn, and down £0.2bn compared to the same month a year earlier, according to the latest figures from the Office for National Statistics (ONS). As Chancellor Sajid Javid prepares to boost spending in his March Budget, for the financial year so far – March to December – UK government borrowing stood 8% higher than a year earlier at £54.6bn. Overall public debt was £1.82tn at the end of 2019, an increase of £35.5bn on December 2018, while corporate tax receipts dipped 3.4% year on year, the biggest drop since 2012/13.