BANKING
One in 10 banks preparing for climate change risk
A survey by the Bank of England (BoE) has found just one in 10 banks are managing climate risks for the long term. Mark Carney, the Bank’s governor, said lenders need to do more to ensure they are better prepared to mitigate environmental risks. The survey found that 70% of lenders were managing risks in some way, while 30% considered climate change a corporate social responsibility matter rather than a strategic issue. Stephen Jones, chief executive of UK Finance, commented: “Tacking climate change is a global priority and today’s report highlights the critical importance of the transition to a low carbon economy.” He added that UK Finance will “liaise closely” with the BoE and UK regulators on the subject.
Are banks a good bet for investors?
City AM carries a debate on whether British high street banks currently offer a good opportunity for investors. Richard Buxton, chief executive at Old Mutual Global Investors, says they do, offering that a “litany of conduct charges and regulatory changes” that have weighed on the sector are easing.” With focus returning to banking “the underlying profitability of the sector is becoming more obvious,” he adds. Offering counter argument, Jon Cunliffe, chief investment officer at Charles Stanley, says regulatory pressure and increasing competition from challenger banks will hit bigger banks. He adds that the most promising investments may be banks that are not entirely UK-focused, identifying HSBC as the preferred stock in the sector.
Barclays apologises over PPI error
Barclays has apologised after it told a number of customers using claims management firms that they did not hold PPI policies when they did. Barclays says a "very small" proportion of customers were given incorrect information. It added that it is "proactively contacting" affected customers to make amends. Meanwhile, Barclays boss Jes Staley has dismissed an attempt by Edward Bramson, an activist investor, to change the bank's strategy, saying a letter to investors in Sherborne Investors “had very little impact, if any.”
London office for Polish bank
Bank Pekao, Poland’s second-largest corporate and investment bank, has launched its first international office in London. CEO Michał Krupiński commented: “Regardless of the outcome of the ongoing Brexit negotiations, Britain will remain an important partner for Poland and Polish companies.”
Marcus looks to make a mark
Goldman Sachs has made its UK retail banking debut through its Marcus digital banking brand. Marcus – named after founder Marcus Goldman – offers an interest rate of 1.5%, which currently represents the best rate on the market, and has a minimum saving level of £1. Des McDaid, Marcus’ managing director, said there is a “real disillusionment about savings,” adding: “We want to reverse the trend – literally putting the interest back into savings.” Moneyfacts’ Charlotte Nelson says Marcus’ 1.5% offering is likely to see other providers think about upping their rates.
FairFX sees 100% profit rise
FairFX, a digital bank and currency exchange, has seen profit climb 100% to £9.7m for the six months to 30 June. The firm also saw turnover of £1.1bn – up 146% on H1 2017 - and reached the 1m customer landmark.
HSBC apologises over Welsh letter
Customer Geraint Lovgreen has complained to the Welsh Language Commissioner after HSBC told him they could not respond to a letter because it was written in Welsh. HSBC apologised for the fact the letter was not identified as being written in Welsh and dealt with by its Welsh speaking team.
PRIVATE EQUITY
Firms warn of ‘daunting’ Brexit
Business leaders have warned Theresa May over the “daunting” prospect of Brexit. “Things could really go off with a bad Brexit” Steve Schwarzman, CEO at Blackstone, warned the PM. “We believe in the good thing. But in terms of just thinking about it from a risk management perspective it’s a little daunting for those of us on the outside,” he added.
JP Morgan in talks to lead Lyfts IPO
JP Morgan Chase is in talks about leading Lyft's IPO, with Goldman Sachs and Morgan Stanley opting not to compete out of loyalty to competitor Uber, which is considering its own IPO.
Blackstone in Anbang real estate talks
Anbang Insurance Group is looking to sell $200m worth of Japanese real estate to help shore up its balance sheet, with Blackstone – which sold the buildings about two years ago – among those believed to be in line to snap them up. The residential assets are part of the portfolio of apartment buildings Anbang bought from Blackstone for around $2.3bn.
PAG launches $787m hostile takeover bid for Spring Reit
Private equity group PAG has made a HK$6.15bn bid for Spring Reit. PAG says its bid is the first voluntary general offer for a Hong Kong-listed Reit.
INTERNATIONAL
BBVA names new executive chairman
BBVA has announced that chief executive Carlos Torres will replace Francisco Gonzalez as the bank's executive chairman. He will take over as chairman on January 1, 2019, while BBVA says it will name a new CEO by the end of the year.
Former UBS bankers to set up regulated crypto-bank
Former UBS bankers Guido Buehler and Andreas Amschwand are hoping their SEBA Crypto becomes Switzerland’s first regulated cryptocurrency bank. They have raised £80m and plan to apply for a banking and securities dealer licence.
US rate rises
The US Federal Reserve lifted interest rates by 0.25% yesterday – the third increase this year. It expects to increase them once more this year and three times in 2019.
Deutsche rubbishes merger rumours
Deutsche Bank has dismissed rumours of a potential merger with UBS or Commerzbank as "fake news". While the German government, which owns a stake in Deutsche, may have indirectly fuelled speculation, the bank’s chief financial officer, James von Moltke, said: “We are constantly amazed at what passes through the editorial filters and gets into the press."
Danske Bank whistleblower revealed
Howard Wilkinson, the former Baltic head of Danske Markets, Danske Bank's investment arm, has been revealed as the whistleblower who drew attention to the bank’s Estonian money laundering scandal. He confirmed his role in helping expose the matter in an email to Danish newspaper Berlingske, after he was named by Estonian media.
AUTOMOTIVE
Beast from the East bites into AA's profits
The harsh winter led to a 15-year high in the number of breakdowns the AA attended. Pre-tax profits for the first half of 2018 at the roadside recovery firm fell 64% year-on-year to £28m, with revenue growing 2% to £480m on the back of its roadside and insurance businesses. The AA cut its pension deficit by £154m and asserted that its financial performance was in line with expectations towards a full-year capex guidance of £105m.
Daimler chief to step down
Swede Ola Kaellenius will become chief executive of Mercedes-Benz parent Daimler from next year, once Dieter Zetsche steps down after 13 years in charge of the firm.
FINANCIAL SERVICES
Few financial services jobs lost over Brexit
Just 630 UK finance jobs have moved abroad since the Brexit vote, according to a poll of 134 firms by Reuters. Banks, insurers, asset managers, private equity firms and exchanges all said they are moving the lowest number of employees possible, as they hold out for access to the Single Market. A total of 5,800 jobs appear set to be relocated abroad once the UK leaves the EU, way down from Reuters' first survey last September - which indicated that firms would move 10,000 jobs abroad.
Chinese currency transactions in London hit £70bn
Chinese currency transactions in London hit £70bn in the second quarter, according to a report by City of London Corporation and the People's Bank of China, with more than 30 Chinese financial services firms now established in the capital.
LEISURE & HOSPITALITY
Richmond buys Bestival
The Bestival and Camp Bestival music festivals have been snapped up for £1.1m by Richmond Group, just days after the business collapsed into administration.
Shepherd Neame tends rising profits
Underling pre-tax profit at Shepherd Neame, which owns and operates 321 pubs, climbed to £11.8m in the year to June 30, up 5.4% on the same period a year earlier. Turnover increased by 0.2%, to £156.6m, on the back of the firm acquiring a fleet of London pubs.
William Hill aiming for US sports betting bullseye
Following its 25-year deal with casino group Eldorado earlier this month, William Hill has agreed a partnership with US gaming giant IGT to secure sports betting deals and state lotteries.
MEDIA & ENTERTAINMENT
WPP combines agencies
WPP has announced that it is to merge two of its agencies, with VML and Y&R to be shaped into a new agency called VMLY&R. VMLY&R will employ around 7,000 staff and will be fully operational in early 2019.
PROFESSIONAL SERVICES
Mitie says competition to hit profits
Outsourcer Mitie, which provides engineering, security and cleaning services, has said profits would be flat to slightly down on the previous year amid heightening competition – but noted it has secured a number of significant contract wins.
PROPERTY
Remortgaging soars while mortgage approvals fall
Remortgaging rose 9.2% in August, according to UK Finance, while the number of mortgages approved for house purchases was almost 5% lower compared with the same time last year. Gross mortgage lending for the total market in August was £24.1bn, down 1.2% on a year earlier.
RETAIL
No-deal could see £9.3bn hit for food and drink retailers
A study commissioned by Barclays suggests a no-deal Brexit could see food retailers and suppliers lose £9.3bn. The report says food and drink entering the UK from the EU would be subject to a new average tariff of 27% - which far exceeds the 3-4% levy that would be applied to non-food products.
Halfords eyes Evans
Halfords has approached Evans Cycles, which is owned by ECI Partners, in regard to a takeover and is believed to be among a number of parties to have made indicative offers to the retailer’s advisers.
ECONOMY
Hammond calls early Budget to fit round Brexit talks
This year's Budget is to be earlier than usual to avoid clashing with the final stage of Brexit negotiations in November. The date of the Budget, 29 October, also fits in with ministers' availability and official data releases, a Treasury spokesman said.
Card lending up in August
UK Finance says credit card lending by high street banks rose by an annual 5.8% in August – the biggest increase since February.
OTHER
Third of UK adults unable to recover quickly from financial shock
Zurich’s “Cost of Resilience” report shows that 34% of UK adults would not be able to recover quickly from an unexpected financial shock or loss of income. Furthermore, 24% admit to having no savings to fall back on and 15% have no idea whether they would be able to cope or not.