Metro Bank chairman Hill to step down
Metro Bank has announced that chairman and co-founder Vernon Hill will leave the lender by the end of the year. The bank said in July that Mr Hill would be stepping down as chairman but had initially said he would stay on as a non-executive director and president. The Times suggests Mr Hill’s exit from the board is likely to make it easier for Metro to find a new chairman, saying that Mr Hill is “a strong personality and his continuing board presence may have deterred candidates for the job”. Mr Hill remains the bank’s ninth largest shareholder with a 3.6% stake, worth about £11m. The announcement of Mr Hill’s departure comes after the bank last week abandoned plans to raise £250m. However, Metro has confirmed it is now beginning the process of raising £350m in the bond markets and is offering better terms to attract investors.
Online banking climbs while branch numbers fall
Figure show that total number of UK bank and building society branches declined by 17% between 2012 and 2018, falling from 13,345 to 11,065, with a 20% contraction in banks' branch networks. Analysis from Moody's Investors Service says the ongoing dip has been driven by increasing take-up of digital banking. Figures suggest almost three-quarters of adults used online banking last year. Arif Bekiroglu, vice president and senior analyst at Moody's, said: “UK regulators have authorised 41 new lenders since 2013, including four digital-only banks, and there are also an estimated 1,600 fintechs operating in the country”. He added that the challengers have taken market share from incumbent banks in payment services, noting that the Open Banking initiative is likely to further boost challenger offerings. He added, however, that “digital banks and fintechs have made relatively few inroads so far into the market for core banking services such as deposit-taking".
Bank tightens rules ahead of tax clampdown
Barclays may no longer use off-payroll contractors as it prepares for a government clampdown on tax avoidance linked to the use of self-employed private sector workers, with a leaked internal email telling the bank’s line managers that they must no longer use freelancers "who provide their services via a personal services company, limited company or other intermediary". This comes ahead of reform of IR35 rules set to come into force in April, with ministers seeking to stop people working off-payroll in the private sector to address tax avoidance.
FRC calls for quarterly pricing reports for overdraft providers
The Financial Conduct Authority has set out new rules around overdrafts that will see providers required to publish details of overdraft pricing every quarter as of next summer. The move, which will see details of the interest rates and payment fees consumers are being charged for an overdraft published, will make charges simpler for customers to understand.
Notion Capital opens £125m fund
Notion Capital has announced its fourth and largest fund to date, which will target a final closing value of £125m. Notion IV will be aimed at start-ups around series A level with cheque sizes between €1m and €8m.
Chinese venture capital investment in US falls to four-year low
Chinese venture capital investment into the US has fallen to its lowest level since 2015, with Chinese funds investing $4bn in US companies in the first nine months of 2019.
RBA could resort to bond-buying scheme
Economists have warned that the Reserve Bank of Australia (RBA) may need to resort to unconventional policy measures to save the economy from stagnation if its latest round of interest rates cuts fail to stimulate growth. Goldman Sachs said that the RBA could launch a $200bn bond-buying scheme if rate cuts don’t lift inflation. Andrew Boak, Goldman Sachs’ chief economist in Australia and New Zealand, said: “We continue to see a material risk that the RBA will deliver even deeper rate cuts and be drawn into unconventional policies.” While the RBA this week cut rates to a record low of 0.75%, UBS economists have forecast the bank will go to 0.5% in November.
Credit Suisse looks to head off exodus
The Telegraph reports that Credit Suisse boss Tidjane Thiam is battling to prevent a mass exodus on the back of revelations that the bank hired private detectives to follow former wealth management chief Iqbal Khan, who moved to UBS. The paper says Mr Thiam is offering pay rises to its best-connected bankers, having seen a number of private bankers move to rivals such as Barclays and Julius Baer this year.
UBS is fined for tax reporting errors
The US’ Financial Industry Regulatory Authority has fined UBS Financial Securities $2m and ordered restitution for repeated failures in addressing short positions in municipal securities in a timely manner and inaccurately representing the tax status of a number of interest payments. UBS Financial Securities reported 2,853 positions in municipal securities as tax-exempt when they were actually taxable, and 950 positions as taxable when they were actually tax-exempt.
Trader sues Citi over ‘malicious’ prosecution
Former Citigroup currencies trader Rohan Ramchandani is suing the bank, alleging it “framed” him to protect itself during a market manipulation scandal, singling him out for intense scrutiny from regulators. A Citigroup spokesperson said the claims of malicious prosecution “are without merit and we will contest them vigorously".
National Australia Bank faces $792m charges
National Australia Bank expects to book an additional A$1.18bn ($792m) in charges due to additional customer remediation costs, dragging down cash earnings by A$1.12bn in H2 2019.
Goldman Sachs names new Asia M&A chiefs
Goldman Sachs has named new mergers and acquisitions heads in Asia ex-Japan. Raghav Maliah and Jung Min will replace John Kim, who is leaving to join Carlyle Group.
Renault chair interviews Nissan CEO shortlist
People familiar with the matter have revealed that Renault chairman Jean-Dominique Senard has narrowed a field of candidates to become CEO at Nissan down to Nissan’s acting CEO Yasuhiro Yamauchi and former Nissan China chief Jun Seki, with Ashwani Gupta - chief operating officer at Nissan’s alliance partner Mitsubishi Motors – also in the running, alongside an external candidate. Mr Senard reportedly interviewed the candidates ahead of a Renault-Nissan alliance meeting scheduled for today.
Construction activity slumps in September
UK construction activity fell at the second-fastest rate since the financial crisis in September, according to the latest purchasing managers’ index (PMI) from IHS Markit. The headline index fell to 43.3, down from 45 in August and the fifth consecutive month below 50 - the level that divides contraction from growth.
TPR cracks down on poor record-keeping
The Pensions Regulator (TPR) is cracking down on poor record-keeping, ordering pension schemes to urgently review their data to ensure savers get what they are entitled to. The pensions watchdog has asked the trustee boards of 400 pension schemes believed to have failed to review their data in the last three years to conduct a data review within six months. TPR’s executive director of regulatory policy David Fairs said without accurate records “trustees cannot ensure that savers will get accurate information or receive the pensions they are entitled to”. He added: “Requiring trustees to carry out reviews will force them to look closely at their data and administration and take appropriate action to bring their systems up to scratch.”
Gilbert to step down from SLA
Martin Gilbert has announced that he will not seek re-election as vice-chairman of Standard Life Aberdeen next year and will retire in September 2020. Mr Gilbert also confirmed that he was interested in joining the board, and possibly becoming chairman, of online bank Revolut, where he is already an adviser.
Johnson & Johnson agrees £16.6m opioid settlement
Johnson & Johnson has made a $20.4m (£16.6m) settlement with two American local authorities to avoid going to trial over the US opioid epidemic. The company said that the settlement with two Ohio counties is not an admission of guilt.
LEISURE AND HOSPITALITY
Betting firms eye merger
Flutter, the owner of Paddy Power and Betfair, is planning a £10bn merger with Sky Bet owner Stars Group. The mooted move would create the world's biggest online betting group. Based on last night's closing prices, the combined entity would be valued at £9.8bn, or £14.2bn including debt. Shareholders of Flutter, formerly Paddy Power Betfair, will own 54.6% of the merged business, which will be dual-listed on the London Stock Exchange and Euronext Dublin.
Tesco chief Lewis in surprise departure
Tesco chief executive Dave Lewis is to step down from the retailer next year after leading a turnaround of the company since 2014, and will be succeeded by Ken Murphy, currently chief commercial officer at Walgreens Boots Alliance. The departure, which took analysts by surprise, was announced as Tesco reported a 6.7% rise in first-half profits to £494m.
Premier League names Pemsel as new chief executive
The Premier League has announced the appointment of Guardian Media Group CEO David Pemsel as its new chief executive.
FTSE sees worst day since January 2016
The FTSE 100 saw its worst day since January 2016, with around £60bn wiped off stocks. This came as Brexit fears, poor economic data and concern over a global recession hit shares across the world. Factors contributing to the dip included Prime Minister Boris Johnson telling MPs that if Brussels does not accept his version of a Brexit deal, the alternative will be a no-deal Brexit, while poor performance on a measure of US manufacturing also contributed. The FTSE 100 closed 2.3% lower, the Stoxx 600 European index, which includes stocks from 17 countries, fell 2.7%, while in the US the Dow, Nasdaq and S&P were all nearly 2% lower.