Banks may have to replace old tech to be reliable – Mackinnon
Duncan Mackinnon, an executive director at the Bank of England, has said Britain's banks may have to re place legacy IT systems to meet tougher recovery requirements for critical services by March 2025. Banks including HSBC, Lloyds, NatWest and Barclays will have to show regulators that key services such as payments and online banking can recover from outages within an acceptable time to avoid undermining confidence in the financial system. "If a firm has a critical dependence on a particular IT system, and it's of a certain age and the number of people who understand it and the backup to those people and systems are becoming more limited over time, then there is a debate to be had on getting off that legacy system," Mackinnon said.
Hungary imposes windfall taxes on banks, companies
The Prime Minister of Hungary, Viktor Orban, said on Wednesday that banks, telecoms firms, large retail chains, insurers, energy companies and airlines will have to pay a large part of the extra profits they make from rising prices into the state budget to help pay for the strengthening of the Hungarian army, and financing caps on households' energy bills.
Sberbank's online banking operations independent from foreign systems
Sberbank has said its online banking systems have been deemed fully compatible with the Russian-made operating system Astra Linux, Sberbank's system, SberBusiness and SberPro, received a certificate confirming its compatibility, the bank said, removing dependency on foreign systems for online banking.
VW to pay out £193m in 'dieselgate' settlement
Volkswagen is to pay £193m to more than 90,000 drivers in England and Wales after it settled a High Court claim over the installation of emissions cheating devices in its vehicles. The group has already paid out more than €30bn (£26bn) worldwide. Ben Smyth of Therium Capital Management, which backed lawyers of Slater and Gordon that represented 70,000 of the claimants, said: “Taking legal action was the only way to ensure that VW would be held to account for allegedly misleading their customers and cheating emissions guidelines.”
Prudential names former Citi banker Anil Wadhwani as next chief executive
Former Citi banker Anil Wadhwani has been appointed chief executive of Prudential. Wadhwani will be the first Asia-based chief of the insurance group, which is deepening its focus in the region. Wadhwani has spent most of his career in Asia, most recently as leader of Canadian insurer Manulife's Asia business in Hong Kong. He also spent 25 years at Citi in consumer finance roles.
Asset managers brace for plunge after global AUM reaches $112trn
Asset managers are braced for a plunge in the value of assets this year after notching bumper returns in 2021 that pushed the total value of managed assets to $112trn globally, new data has revealed. A report from Boston Consulting Group found that buoyant equity markets and a surge in inflows bumped total assets under management up 12% in 2021, well ahead of the average 7% growth seen on average in the previous two decades. Analysts said the industry now faces a reckoning as equity markets plunge amid soaring inflation and turbulence sparked by war in Ukraine. Separately, Barclays has said that global mutual funds investors are set to sell equities worth a further $350bn unless fears of recession diminish.
Morses Club gives no reason for results delay
Sub-prime lender Morses Club has delayed its annual results without explanation sending shares down 31% yesterday. In February, the company warned that earnings would be between 20% and 30% below expectations. Morses Club is audited by Deloitte.
Vanguard refuses to end new fossil fuel investments
Vanguard has refused to stop new investments in fossil fuel projects, arguing that such a move was not required to safeguard its clients from climate risks.
UK car production falls 11% in April
The Society of Motor Manufacturers and Traders (SMMT) reveals that Britain's car production fell 11% in April due to persistent chip shortages and supply chain issues. The group said 60,554 vehicles left factory gates last month, compared with 68,306 units a year earlier. Electric cars made up more than a quarter of those vehicles, up about 2% year-over-year.
Banknote printer reveals falling profits
De La Rue has reported a 4.5% fall in underlying operating profits to £36.4m for the year to 26 March, sending shares in the banknote printer down as much as 10%. The company said mounting inflation pressures were expected to leave underlying earnings "broadly flat" in its current financial year.
MEDIA & ENTERTAINMENT
Twitter shareholders vote against Silver Lake’s Durban continuing in board role
Egon Durban, the co-CEO of Silver Lake, has resigned from the board of Twitter after shareholders voted against his re-election. Shareholder advisory groups ISS and Glass Lewis complained that Durban was on too many company boards. Several outlets note that Durban is a long-time business associate and backer of Elon Musk. Meanwhile, Jack Dorsey’s term has expired, meaning he will no longer have a presence on Twitter’s board for the first time since founding it in 2006.
Profits surge at TMG with subs at record high
Telegraph Media Group has reported a 25% jump in pre-exceptional operating profits while total subscriptions increased by 28% from 562,000 in December 2020 to 720,000 in December 2021. In the year ended December 2021 turnover was £245m, an increase of £9.8m, or 4%, versus 2020, the company said in its annual results. The increase was largely due to the growth in digital subscription revenues, which increased by £12.6m, or 40%, to £44.1m in 2021.
Peter Cowgill to leave JD Sports after governance review
Peter Cowgill is stepping down as executive chairman of JD Sports with immediate effect. JD Sports said that, as a consequence of an ongoing review of its internal governance and controls, it had decided to accelerate the separation of the roles of chair and chief executive. Helen Ashton, the Audit and Risk Committee Chair, will become interim chair, with Kath Smith becoming interim chief executive. A search for a permanent chief executive and chair is ongoing. In February, the CMA ordered JD Sports and Footasylum to pay fines totalling £4.3m and £380,000 respectively for failing to have safeguards in place, sharing commercially sensitive information and failing to alert the CMA about meetings between the bosses of the two companies in July and August 2021.
Sale of Chelsea FC sale to Todd Boehly cleared
The British government has cleared the sale of Chelsea Football Club to a consortium led by US financier Todd Boehly. Th e Culture Secretary, Nadine Dorries said the sale would help to secure “the long-term future” of the west London club and would not benefit former owner Roman Abramovich or other sanctioned individuals.
Oil and gas windfall tax to fund new cost of living support package
The Chancellor will on today announce a £10bn package of support for struggling households as energy prices soar. Rishi Sunak will reveal an increase to the £200 contribution to energy bills unveiled earlier in the year and scrap plans to make people pay back the amount over the coming years. Sources said that the value of the discount could be increased to as much as £400, which would cost more than £10bn. The package is also expected to include new “targeted” support for the poorest households, possibly through Universal Credit or extra help for pensioners. The Chancellor will fund the move with an oil and gas windfall tax that will see the amount companies pay linked to how much they invest. “The more you invest, the less you contribute,” said one source familiar with the proposal. The support comes as Ofgem predicts the energy price cap will increase to £2,800 in October, up from just over £1,000 in October 2019.
Rate rises are needed but risky, warns Pill
The Bank of England’s chief economist has warned that monetary policy needs to be tightened despite the risk that raising rates too much could push the economy into a recession. Huw Pill voted with the majority to raise rates by 0.25 points to a 13-year high of 1% at the last meeting. But he said: “I personally think there is more that needs to be done... and we need to go not necessarily to a super restrictive stance but to a stance that takes some of that support away.”
UK plans investment summit to rival Davos
The UK Government is planning a rival summit to the World Economic Forum’s annual meeting in Davos with ministers concluding the gathering in Switzerland has become too distant from real business issues. Government insiders say the UK event would be a more serious gathering designed to lure the biggest names in business rather serve as an annual bash for the global elite. One FTSE 100 chief executive, previously a regular Davos attendee, said: “It’s a great idea… A regular event that brings only the real movers and shakers to London could have a massive impact.”