Banks told to do more to help struggling companies
The Chancellor, the governor of the Bank of England and the CEO of the Financial Conduct Authority have written to banks in the UK urging them to do more to save struggling businesses from collapse. Rishi Sunak, Andrew Bailey and Chris Woolard also told lenders not to damage customers' credit ratings if they exceeded overdraft limits or missed loan repayments. The letter was an intervention welcomed by Mike Cherry, chairman of the Federation of Small Businesses, who said businesses had been reporting that banks had not been as cooperative as they should be. Banks are also under pressure to revisit the terms of emergency coronavirus loans after lenders including Barclays and HSBC were reportedly asking some directors to sign personal guarantees, as well as to pledge business assets as security. Royal Bank of Scotland has promised to not ask for personal guarantees to secure the loans. Separately, Labour MP Chris Bryant has suggested that UK banks were profiteering from the coronavirus pandemic by keeping borrowing rates high despite the base rate being cut to 0.1% and government guarantees on loans. Finally, Barclays and RBS are under pressure to cancel planned dividend payouts totalling £2bn, due in the next few months.
Barclays waives overdraft fees for all customers
Barclays has become the first major bank to waive all overdraft charges until the end of April, as it aims to help customers struggling financially through the coronavirus crisis. Account holders will have any interest charges automatically removed from their balance and they do not have to contact the bank. The new policy will apply to all customers, not just those diagnosed with coronavirus.
Lenders sound warning on mortgage holidays
Banks and mortgage lenders are reportedly looking to discourage customers from taking advantage of mortgage “holidays”, noting that unclear advice from the government risked pushing customers into more debt.
Cynergy seeks Scottish growth
Specialist lender Cynergy Bank has hired two senior leaders as it further expands into the Scottish market. The bank targets business owners, property entrepreneurs and family businesses.
Softbank fires back at Moody’s over downgrade
Softbank has demanded that Moody’s removes all of its bond ratings after the ratings agency downgraded the tech investment group’s debt by two notches. Softbank accused Moody’s of having based its decision on “its biased and mistaken views” and “excessively pessimistic assumptions”. City AM notes that the downgrade may increase borrowing costs for Softbank, which has a total of $55bn net debt (£46bn).
Blackstone’s refusal to waive rents comes under fire
Blackstone is refusing to waive rents for tenants forced to shut owing to the coronavirus lockdown, leading to accusations that the private equity giant is putting thousands of small businesses in the UK at risk.
Credit Suisse cuts ex-chief Tidjane Thiam’s bonus after spying scandal
Credit Suisse has slashed the bonus of its former chief executive Tidjane Thiam for his role in a corporate spying scandal that damaged the Swiss lender’s reputation. In its annual report, the Swiss bank confirmed it had slashed Thiam’s short-term bonus by a third, taking his total pay packet for 2019 down to SFr10.7m (£9.2m).
Coronavirus could wipe out US bank profits, says S&P
S&P Global Ratings has warned that a full year of US banking profits could be wiped out by the coronavirus and the sector could go into the red for the first time since 2009.
South Africa launches bond purchases after coronavirus roils markets
South Africa’s central bank began purchasing government bonds on Wednesday in an attempt to provide liquidity and promote the “smooth functioning of domestic financial markets”.
Investment bank revenues soar on back of hectic trading
Investment banking revenues rocketed by between 20% and 30% in Q1 on the back of frenzied trading around the coronavirus crisis, the FT reports.
Boeing to reboot 737 Max production
Boeing intends to restart production of the grounded 737 Max in May, five months after suspending work due to a lack of regulatory approvals and a 400 plane order backlog. “Priority number one is getting customers’ fleets back up. We don’t want to add to inventory”, said Boeing finance chief Greg Smith.
Bellway warns of ‘substantial disruption’ ahead
Bellway has cancelled its interim dividend to preserve its balance sheet, and has warned of a period of “substantial disruption” ahead. In its trading update for the half year ended January 31st, revenue increased 3.6% to £1.54bn while pre-tax profit fell 7.1% from £319.8m in 2019 to £297.2m. Housing completions rose 6.3% to a record 5,321 homes.
Persimmon cancels dividend and begins shutdown of sites
Persimmon has followed the lead of Taylor Wimpey and Barratt Homes in closing construction sites, despite health secretary Matt Hancock clarifying sites could remain open provided workers were adhering to social distancing advice. It has also cancelled its proposed 125p per share interim dividend payment and postponed the final dividend payment of 110p per share in July.
Bill Ackman makes $2.6bn in credit market rout
Pershing Square founder Bill Ackman told investors yesterday that he had cashed in $2.6bn from credit market hedges and was “redeploying the capital in companies we love at bargain prices” as he bets heavily on a US recovery. Pershing Square has also added a stake in private equity group Blackstone, which has lost 25% of its market value in the past month.
Tilney and Smith & Williamson merger in doubt
The merger between Smith & Williamson and Tilney, the wealth manager backed by Permira, has been thrown into doubt because of the disruption caused by the coronavirus outbreak. One insider said Tilney’s valuation had been hit hard by the fall in the dollar value of its AUM.
Fintech firm plans Scottish expansion
New Zealand-based fintech business FNZ has outlined plans to create as many as 200 jobs in Scotland over the next two years.
Millions of antibody tests available soon
Public Health England (PHE) has said millions of home coronavirus tests will soon be available for people to buy from Amazon or from high street pharmacies. The 15-minute fingerprick tests could complete their evaluation this week and be rolled out soon afterwards. The tests will reveal whether someone has had the virus and is therefore thought to have some immunity and can go back to work. Meanwhile, NHS staff could also get access within days to a separate, existing test that tells people if they currently have the virus. A testing centre has been established in Milton Keynes which can run 100,000 tests a day.
Dyson and Airbus consortium lead ventilator fight
UK vacuum cleaner manufacturer Dyson has received orders for 10,000 ventilators it aims to build from scratch and hopes the design is approved in the next few days so production can begin. Separately, an Airbus-led consortium is expecting the government to give it the green light to start making up to 30,000 medical ventilators from next week. Babcock International, Smiths Group, Ford and McLaren are among other companies involved in emergency ventilator production plans.
MEDIA & ENTERTAINMENT
UK towns lose local newspapers as impact of coronavirus deepens
Major towns including Milton Keynes have lost their only print newspaper, as the economic impact of the coronavirus starts to destroy parts of the struggling media industry. JPI Media told staff on Wednesday that all of its free newspapers delivered door-to-door would temporarily stop printing due to the logistical challenges of arranging delivery, alongside the catastrophic collapse in the local advertising market.
DMGT granted permission for the i newspaper takeover
Daily Mail and General Trust has been told it can go ahead with the £50m takeover of the i newspaper after ministers said the acquisition would not be referred to a further regulatory investigation.
City of London Corporation defers rent payments for tenants
The City of London Corporation has said it will defer this quarter’s rental payments for commercial tenants worst affected by the coronavirus pandemic. The corporation is deferring rent payments for the March quarter for all retail, hospitality, small office, and serviced office tenants. Supermarkets, banks, pharmacies and building societies will not be eligible for the rent relief. New figures revealed that footfall in the capital plunged by 63.3% last week as officer workers were advised to stay at home.
Hundreds of thousands of retail jobs under threat
The Centre for Retail Research (CRR) predicts that 20,620 shops will close permanently this year, with the loss of 235,714 jobs, as the coronavirus breaks the backs of already struggling retailers. Restructuring experts expect many big names to leave thousands of stores closed even after the COVID-19 disaster passes.
JPMorgan: F1 at risk of breaching loan covenants
JPMorgan has warned that Liberty Media-owned Formula One “could conceivably breach” the covenants on its $2.9bn debt facility, should races continue to be postponed or cancelled due to coronavirus.
Falling petrol prices push inflation down
The collapse in global oil prices, resulting in steep falls in the price of petrol and diesel at the pumps, combined with a 0.5% fall in costs for manufacturers, has seen inflation in the UK fall from 1.8% in January to 1.7% last month. Samuel Tombs, of Pantheon Macroeconomics, predicts a drop to well below 1% over the summer.
IMF and World Bank ask the West to suspend debt interest
The International Monetary Fund and the World Bank are calling on Western governments to suspend the collection of debt interest from developing nations to allow time for an assessment of the coronavirus outbreak.