JPMorgan ventures into UK retail banking with digital-only launch
JP Morgan has confirmed it plans to launch a digital-only bank in the UK making it the second Wall Street bank to target UK households after Goldman Sachs launched savings bank Marcus in 2018. JP Morgan’s attack on the consumer banking market will pile pressure on challenger banks such as Monzo and Revolut. But one London-based bank boss pointed out to the Telegraph that the US giants would now be competing against their UK banking clients and this could hit their investment banking business. The FT notes that Sir Win Bischoff, the former chair of Lloyds Bank, has joined the board of JP Morgan’s new project.
Square Mile ‘not dependent on EU’ - McGuinness
Catherine McGuinness, the head of the City of London Corporation, has said that Brexit’s impact on London’s loss of financial business has not been catastrophic and she insisted that the City will thrive even if the EU “irrationally” blocks access. She said: “It’s disappointing to lose business but it’s not at all catastrophic. We are very confident in London’s basic strengths and that we will make up business elsewhere.” McGuinness added that she did not want the Government to light “a bonfire of regulations”, affirming that the City is not looking for a move away from international standards. London’s Brexit job losses to the EU are estimated to be around 7,500, much lower than investment consultant Oliver Wyman’s 2016 prediction of up to 75,000.
Brussels invites in US to weaken UK clearing power
The European Commission has decided that the US financial regulator's rules around clearing houses were equivalent to the EU's and that US firms should now be able to operate throughout the EU. The US is being offered an open-ended equivalence deal, which is more favourable than the 18-month decision granted to the UK at the end of the Brexit transition. The move follows news that the UK and Switzerland plan to negotiate a mutual recognition agreement to reduce barriers between their financial markets. The Telegraph suggests the decision by Brussels is an attempt to lessen the dominance of London in Europe’s annual clearing market.
FCA considers raising contactless payments limit again
New proposals being considered by the Financial Conduct Authority could see the limit for contactless payments raised still further to £100. A consultation on the move is to be launched, forming part of a more general consumer credit update.
3i Infrastructure maintains dividend amid fall in annual income
Investment company 3i Infrastructure secured a total income of £24m between 1 October and 31 December, representing a 45% reduction from the £44m in the year-earlier period. Phil White, head of infrastructure and investment manager at the firm, remarked: “During the period we have been pleased by the resilient performance of our portfolio and have continued to progress a number of potential investment opportunities from our pipeline. Our markets remain very competitive despite the uncertainties caused by the pandemic, but we are maintaining our investment discipline and continue to focus on investments that we believe will enhance the company’s portfolio.”
Berenberg boosted by Deutsche Bank’s retreat from equities
Hamburg-based independent bank Berenberg posted a record annual profit on Wednesday as the firm revealed plans to further expand its market share.
UniCredit board votes unanimously for Andrea Orcel as CEO
Andrea Orcel has been confirmed as the new chief executive of UniCredit after the bank’s board voted unanimously to hire the high-profile dealmaker.
UK car production slumps to lowest level since 1984
Figures from the Society of Motor Manufacturers and Traders have revealed that output from UK car plants fell by 29% last year to 920,908, the first time the industry has dropped below the 1m mark since 2009. Mike Hawes, chief executive of the SMMT, said the drop in car output meant the industry lost about £10.5bn in revenues compared with 2019. The drop also had a major effect on workers, with at least 10,000 car industry jobs lost during the year. Hawes added that the headline total may be an “iceberg”, with a significant number of redundancies hidden from view in supply chains where smaller companies have had little choice but to cut back. He also said that since Brexit, sourcing parts from outside the EU, moving staff across the Channel, and gaining safety approvals for different models have all become more difficult.
Tesla reports first ever annual profit
Tesla has reported profit of $721m in 2020, with $270m generated in the last three months of the year thanks to “substantial growth” in deliveries. It is the company’s first ever year-long run of profitability.
Boeing books record losses for 2020
Boeing has booked a record $12.7bn of losses for 2020. The company has been hit by the 737 Max scandal and the delayed launch of the Boeing 777X. Boeing also took another $275m charge on its ill-starred KC-46 Pegasus military in-flight refuelling plane. Meanwhile, British and European regulators have cleared the 737 Max to fly again.
Brewin Dolphin sees increase in funds under management
Brewin Dolphin has reported funds under management in excess of £50bn, as wealth managers and investment platforms including rival Hargreaves Lansdown benefit from a healthy stock market. Brewin Dolphin announced that funds increased 8% to £51.4bn in the last three months alone, with chief executive Robin Beer commenting: “With a Brexit trade deal behind us and the rollout of vaccinations in the UK, market sentiment is starting to improve and we look forward to benefitting from this recovery over the coming year.”
Branson backs $4bn float of genetics firm
Sir Richard Branson’s special purpose acquisition company (SPAC) VG Acquisition Corp will be used to launch 23andMe’s $4bn stock market debut. 23andMe is a genetics firm run by Anne Wojcicki, the former wife of Google co-founder Sergey Brin, which collects genetic information from customers. The company has launched a new tool that is based on data from Covid sufferers to predict whether customers are susceptible to developing a severe case of the virus.
LEISURE & HOSPITALITY
Wetherspoon founder sells £50m of shares
Over £50m worth of shares in Wetherspoon’s have been sold by founder Tim Martin, “in response to significant buying interest following the company placing last week.”
Covid curbs drain £200m a day from hospitality
The latest UKHospitality and CGA Quarterly Tracker reveals sales in the hospitality sector plunged from £133bn in 2019 to just under £62bn a year later - equivalent to £8m an hour in lost sales.
Aim-listed Scapa bought by US peer for £400m
Manchester-based maker of industrial tape and bandages Scapa is to be acquired by US-listed firm Schweitzer-Mauduit International for £402.9m.
MEDIA & ENTERTAINMENT
Masts deal agreed by mobile firms
Mobile coverage in remote areas could be improved with over 200 masts across the UK to be built and shared under an agreement between Vodafone, O2 and Three. Mark Warman, minister for digital infrastructure, noted that the deal would "unlock the potential of rural communities in all four nations and offer greater choice of fast and reliable 4G services." This comes as the UK government begins a consultation into laws around building and maintaining digital infrastructure.
Most rent owed to Warehouse Reit collected
AIM-listed firm Warehouse Reit has reported that 95% of the total rent due on the December quarter date had been collected as of January 25, as warehouse landlords see more demand from retailers seeking more space as online shopping continues to grow in popularity. Warehouse Reit completed 19 new lettings and 24 lease renewals since October, across a total of 238,900 square feet.
Reddit pressure sees Melvin Capital close Gamestop short position
Gabe Plotkin, manager of Melvin Capital, the fund targeted by investors on website Reddit, has said the firm has closed out its short position on Gamestop after suffering a huge loss, with shares in Gamestop closing 93% higher on Tuesday. Neil Wilson, chief market analyst at Markets.com, remarked: “I would hardly class this as the smooth functioning of financial markets and the SEC will be starting to pay attention,” with traders artificially increasing Gamestop’s price and concerns being raised about potential securities fraud and market manipulation.
Number of empty shops soars
The Royal Institution of Chartered Surveyors' quarterly survey reveals that the number of empty shops and offices in Britain increased at the fastest pace since the survey began 30 years ago during Q4 last year. Industrial property, which has been boosted by the demand for storage space from online retailers, was the only sector to record positive results.
Sunak prepares Tory MPs for tax rises
The Chancellor has told Conservative MPs that if taxes are raised in the near future then the Government will be in a better position to reduce them ahead of the next election. Speaking with the 1922 committee of backbench Conservatives on Wednesday, Rishi Sunak signalled that difficult decisions lie ahead on raising revenue and reducing the deficit. MPs told the Telegraph they now expect Mr Sunak to set out a detailed roadmap on his strategy for spending, tax rises, the deficit and other economic levers at the budget.