BANKING
The Bank of London targets the ‘sleepy worlds of clearing and global transaction banking’
The Bank of London has launched, detailing ambitious plans to shake-up the clearing and cross-border payments business. The bank, which is led by former Barclays tech boss Anthony Watson, claims to have entered the market with a $1.1bn valuation. This makes it the first ever pre-revenue bank to attain unicorn status upon its debut. The Bank of London, which is only the second new clearing bank in London in 250 years, will offer services covering global cross-border money moves, cash management and compliance. It will also act as a portal via which other businesses can offer banking services or financial products. While Barclays, HSBC, Lloyds Banking Group and NatWest have dominated the City’s clearing market, The Bank of London joins ClearBank, which launched in 2017, as challengers to their dominance. Anthony Watson, founder and group chief executive of The Bank of London, said: “The world of global transaction and clearing banking needs disrupting. Fewer than 100 banks control the flow of money in, around, between and out of the UK the EU and the US.” Chairman Harvey Schwartz, a former chief operating officer at Goldman Sachs, said: “The Bank of London is going to address an arcane part of the global financial system – the sleepy worlds of clearing and global transaction banking.” The bank has said it is in “advanced talks” with regulators in the European Union and North America.
PRIVATE EQUITY
CVC drops Intertrust interest
CVC Capital Partners has pulled out of takeover talks with Dutch financial services company Intertrust. The private equity firm launched a bid for Intertrust which valued the firm at €1.63bn but said it is in no longer in talks over a deal. While the bid made on November 11 was worth €18 per share, Intertrust said on November 22 that it had received multiple non-binding takeover offers of up to €22 per share.
Crown rejects Blackstone bid
Casino operator Crown Resorts has told Blackstone to improve its takeover offer, rejecting a €8.46bn bid but offering access to more financial data which could prompt the private equity group to raise its bid.
INTERNATIONAL
UniCredit considers job cuts
Italy’s UniCredit is reportedly considering cutting around 3,000 jobs through voluntary exits under a new strategic plan. The lender employs 87,102 staff globally, of which around 36,000 are in Italy. The proposed cuts would amount to 3.4% of UniCredit's overall workforce.
FINANCIAL SERVICES
FOS chief apologises over delays
Nausicaa Delfas, chief executive of the Financial Ombudsman Service (FOS), has apologised for its performance, telling victims she was sorry that many have waited months before complaints were resolved. Ms Delfas, who joined the financial complaints body from the Financial Conduct Authority in May, vowed that the FOS is “changing and improving” following a review by management consultants Oaklin which identified issues with the service’s structure and technology, as well as its communication with the public, other regulators, and industry bodies. She said that upon joining the FOS, she “hit the ground running and initiated this review.” “I could see we needed to change, and this gave us an opportunity to have an impartial perspective,” she added. Noting that the FOS has halved the backlog of cases by trying to resolve some in groups, Ms Delfas said: “We want to reduce our backlogs, reduce our waiting times, and we're really sorry that some have had to wait a long time.”
Providers to nudge savers to pension guidance
New rules published by the Financial Conduct Authority (FCA) will see savers offered Pension Wise appointments if they want to access their defined contribution pensions as of June 2022. Currently, providers are required to point consumers to Pension Wise and encourage them to seek appropriate pension guidance or advice to help them understand their options. Under the new rules, providers must initially refer those who have decided how they wish to access their pension savings or transfer rights to Pension Wise. They must then explain the nature and purpose of Pension Wise guidance before offering to book a Pension Wise appointment. The FCA also said providers must book the appointment for those who accept the offer - or provide them with sufficient information to book an appointment themselves. Providers must also record whether the saver declined the offer, received guidance or went on to receive regulated advice. The rules apply to providers of pensions, including operators of self‑invested personal pensions.
MANUFACTURING
Manufacturers see prices rise at the fastest pace in three decades
Prices across Britain's manufacturing sector have increased at their fastest rate in three decades, according to the latest IHS Markit/CIPS manufacturing PMI, with the cost of raw materials and crucial components climbing. Rob Dobson, director at IHS Markit, said a shortage in the raw materials market is “exerting massive upwards pressure” on input prices and pushing firms’ costs “relentlessly” higher. The PMI shows growth in the manufacturing sector sped up for the second month in a row in November, despite squeezed supply chains. The manufacturing PMI reading for November came in at 58.1, against 57.8 in October and 57.1 in September. This remains lower than the 60.3 score seen in August on an index where anything above 50 signals growth.
MEDIA & ENTERTAINMENT
BT sets target for increase in non-white staff
BT aims to more than double the share of its workforce from non-white backgrounds to 25% by 2030. CEO Philip Jansen, the chief executive of BT, said the target was "very ambitious", adding: “All we are saying is, and it is a very simple assumption, is that BT should reflect the society in which we operate in and our customers." BT said its most recent survey of the diversity of its 100,000-strong workforce found that only 9% were from black, Asian, or other ethnic minority backgrounds. The new target includes international workers, including BT's operations in India and Africa.
Shareholders tell Microsoft to improve transparency
Microsoft investors are calling for greater transparency over sexual harassment claims, with 78% of attendees at the tech firm’s AGM voting in favour of a proposal put forward by activist investors Arjun Capital which has called for independent assessment of the company’s sexual harassment processes. It has urged Microsoft to publish a report on the effectiveness of its workplace sexual harassment policies. Microsoft’s board had urged shareholders to reject the proposal, arguing it was already putting more resources into tackling sexual harassment. Microsoft’s leadership has faced criticism over its handling of sexual harassment allegations brought by a former employee against former chief executive and founder Bill Gates.
Disney appoints first female chair
Walt Disney Co has named Susan Arnold as its chairman of the board, making her the first woman to be named to the role in the company's 98-year history. Arnold, who has been a board member for 14 years, will succeed Bob Iger on December 31. Ms Arnold was formerly an operating executive of equity investment firm The Carlyle Group and has also served in executive roles at Procter and Gamble and McDonald's.
REAL ESTATE
House prices climb 10% in a year
House prices have risen 10% in the past year, according to data from Nationwide. Analysis shows that the average house price rose 0.9% in November, climbing £2,367 from October’s average to hit £252,687. This means the typical home is now worth 10% more than in November 2020 and 15% more than at the start of the pandemic in March 2020. Robert Gardner, Nationwide’s chief economist, commented: “Activity has been extremely buoyant in 2021. The number of housing transactions so far this year has already exceeded the number recorded in 2020 with two months still to go.” He went on to note that the volume and value of sales is now similar to 2007, just before the financial crisis. Looking ahead, Mr Gardner said “the outlook remains uncertain”, saying it is unclear what impact the Omicron coronavirus variant will have on the wider economy and warning that a higher cost of living has left consumer confidence "well below" the levels seen in the summer.
SPORT
Debt reduction could score Derby a takeover
Prospective buyers believe Derby County could be liquidated unless HMRC agrees to write off more than £20m of debt. The club owes £29m but would-be investors feel that the tax office would need to reduce the bill to around £7.5m for a takeover to be viable from a business sense. The club's administrators are due to meet with the taxman this week.
ECONOMY
OECD: UK economy will grow faster than the EU in 2021 and 2022
The Organisation for Economic Co-operation and Development (OECD) has predicted the UK economy will grow at a faster rate than the EU's over the next two years. It expects the UK economy will grow by 6.9% in 2021 and then 4.7% in 2022, while across the eurozone, it expects growth of 5.2% in 2021 and 4.3% next year. The OECD forecast suggests the UK will outpace the growth of other G7 nations this year and next. While its forecast for 6.9% growth this year is an upgrade on the 6.7% it forecast in September, the projection for 2022 is down from a previous estimate of 5.2%. The OECD lowered its global growth outlook to 5.6% for 2021, with this down from 5.7%, while it kept its 2020 estimate unchanged at 4.5%. Presenting the report, OECD chief economist Laurence Boone warned that the Omicron strain of Covid “is further adding to the already high levels of uncertainty and risks, and that could be a threat to the recovery.” Focusing on the UK, he also warned that a “prolonged period of acute supply and labour shortages could slow down the recovery.”
Inflation could add £1,700 to family costs
Analysis by the Centre for Economics and Business Research (CEBR) suggests a typical UK family will spend £1,700 more per year on household costs in 2022. The forecast for the BBC’s Panorama says a family of two adults and two children is set to spend £33.60 more per week compared with December 2020 due to inflation, with the report projecting that the inflation rate will rise to 4.6% by Christmas from the current 4.2%. The forecast is based on the prices of commonly bought items including food and drink, clothing and household goods. It also includes spending on utility bills, transport costs, and recreational activities.