Peer-to-peer lender makes banking debut
Peer-to-peer lender Zopa is to make its first foray into banking, launching fixed-term savings accounts. The accounts will be closed in an early testing phase due to limits placed upon Zopa by the Financial Conduct Authority, with the lender’s restricted banking licence only allowing it to accept up to £50,000 in customer deposits.
FCA in bank scam warning
The Financial Conduct Authority (FCA) has published a warning advising savers to be vigilant after challenger bank Shawbrook was cloned by fraudsters. The criminals using the bank’s name do not operate a website, but have been contacting people from an email address using Shawbrook’s name, offering them “very attractive savings rates”. The matter came to light when a victim who sent money in response to the correspondence contacted Shawbrook asking for confirmation it had been received, with the bank then contacting the FCA over the scam.
The British Business Bank, the UK government's economic development bank, has announced the appointment of Neeta Atkar as senior independent director to its board. Ms Atkar, a former TSB chief risk officer, will continue to chair the British Business Bank's Risk Committee.
Monzo trademark attempt rejected
Monzo’s attempt to trademark its distinct “hot coral” colour has been rejected. The intellectual property office turned down the bank’s application to register the bright signature colour, a move the firm said was an attempt to protect its brand against a number of other global companies that have been using a similar shade.
Foreign PE firms target LSE
The Telegraph’s Oliver Gill and Vinjeru Mkandawire say that foreign investment firms are leading a $152bn (£118bn) “blitz” on the London Stock Exchange, snapping up British companies amidst a climate of weak sterling and City short-termism. They say Brexit “turmoil” and the threat of a Labour government have caused “despair” on the stock exchange, hitting the value of domestic firms. Blackstone’s European boss Lionel Assant said: “At this time of uncertainty we are a long-term believer in the UK and making a positive economic impact … We have invested meaningful capital and will continue to do so, despite current short term headwinds, while others perhaps won’t.” Mr Gill and Ms Mkandawire add that private equity firms are not the only beneficiaries of a summer of deals, with advisers such as investment bankers, lawyers and accounting firms seeing almost £430m in fees across deals for Greene King, Ei and Merlin.
Civil unrest hits Hong Kong bourse
Profits at the Hong Kong Exchanges and Clearing (HKEX) fell to HK$2.2bn ($217.8m) in the three months to September, down 9.5% on the same period last year. Trading fees had slumped 10%, while fees from stock listing fell 13.6% to HK$394m. The group said the ongoing political unrest, Brexit uncertainty and the US-China trade war have all driven the slowdown.
SocGen profit slumps amid major restructuring
Societe Generale has revealed a sharp fall in profit for the third quarter, missing analyst expectations amid a major restructuring effort. The bank posted net profit of €854m (£734m) for the three month period, down almost 35% on the same quarter last year, and revenue of €5.98bn compared with €6.53bn in the previous year. Equity trading revenue slumped 20%, with the bank citing “lower volumes and adverse market conditions, particularly in August”.
BoA and Raymond James to pay $12m over excessive fees
Bank of America and Raymond James Financial are to hand $12m compensation to clients who incurred excessive fees on investments, the Financial Industry Regulatory Authority has announced. The regulator said that Bank of America's Merrill Lynch unit will pay at least $4m and two Raymond James units will hand over $8.03m after failing to ensure that financial advisers properly took fees into account when recommending investments.
National Australia Bank’s profit slumps in ‘challenging’ year
National Australia Bank has posted full-year cash profits of A$5.09bn, a 10.6% dip on last year, with cash earnings at its business, consumer and institutional banking divisions falling.
Unicredit to sell Mediobanca stake
Unicredit has started the sale of its 8.4% stake in investment bank Mediobanca. Unicredit, Italy’s largest bank, is selling the stake at an average price of €10.53 per share.
BMW reveals racing profits
Racing ahead of analyst estimates, a rise in SUV sales has led to BMW recording a sharp rise in earnings. The German car giant posted earnings before interest and taxes (Ebit) of €2.29bn (£1.97bn) for the last quarter, up 33% on the same period last year, while group revenues rose 7.9% to €26.67bn, up from €24.72bn last year. Sales of BMW Group cars, which includes Mini and Rolls-Royce, rose 3.6%.
Norwegian Air slumps after third share sale
Norwegian Air shares dropped almost 10% on Wednesday morning after the airline launched its third share sale in two years and a bond issue. The company sold 27.25m new shares at 40 kr per share to raise 2.5bn kr (£211.5m) to meet its cash needs through 2020, along with raising $150m through a convertible bond issue.
Government urged to protect post-Brexit ties with the EU
The Investment Association has urged the Government to protect cross border investment arrangements and secure close alignment with EU rules post-Brexit. The group warned against a no-deal Brexit, calling it "the worst possible outcome for UK investment managers". The IA claimed the UK's future relationship with the EU should be "underpinned by regulatory cooperation" and must focus on preserving managers' ability to offer cross-border investment products. The IA said it was "particularly vital that plans already made are not changed", citing the loss of passporting arrangements covering the cross-border sale of funds and the need for the UK to retain equivalence in clearing houses.
Traders call for more family friendly hours
Trader associations have called on European markets to cut trading hours to encourage more diversity. Stock market trading still lags behind other areas of financial services in terms of attracting women into roles, one association said. April Day, head of equities at the Association for Financial Markets in Europe, said her organisation had been in contact with stock exchanges in London, Paris, Germany and the Nordic region, calling for a reduction in trading hours. The request is being made in conjunction with fellow trader body the Investment Association. Trading hours, the organisations said, would need to be harmonised across European exchanges. The London Stock Exchange said it would launch a consultation on the request.
WeWork woes punish SoftBank
Softbank’s Vision Fund has taken an $8.9bn hit, dragging its parent company to its first quarterly loss in 14 years. The Japanese investment giant's investment in WeWork dropped $3.4bn between July and September, the firm’s latest results show. A 9% boost in quarterly operating profit for Japanese telecoms arm Softbank Corp helped offset the Vision Fund’s troubles.
Jupiter hires Pease as chair
Jupiter Fund Management has hired former Northern Rock director Nichola Pease as its chairwoman. The Times says her appointment “slipped through the Financial Conduct Authority's vetting net” because Jupiter Fund Management is a holding company only and is not regulated. The paper, pointing to Ms Pease’s position at collapsed bank Northern Rock, notes she cannot be held liable under the senior managers and certification regime which brought in rules to ensure that the most senior figures in financial services companies are held personally accountable for big failings. Ms Pease yesterday resigned her non-executive director role at Schroders and her husband, the hedge fund manager Crispin Odey, closed his short position in Jupiter.
MEDIA AND ENTERTAINMENT
Virgin Media hangs up on BT
Virgin Media is ditching BT’s mobile network for Vodafone from late 2021. A five-year deal will give its customers access to new services including 5G.
CVAs hit Intu
Hit with a number of CVAs, shopping centre owner Intu has revealed a higher-than-anticipated volume of insolvencies from its occupants, prompting the firm to indicate that it may be pushed to make a cash call or even sell off assets. During the third quarter, the retail landlord agreed 47 long-term leases amounting to £5m in annual rent, compared with 84 leases equalling £15m in annual rent in the same period a year ago, and Intu has forecast like-for-like net rental income for 2019 to be down by around 9% on last year.
Saudi Arabia rubbishes Capco deal links
The Saudi Arabian Ambassador has brushed off reports his country’s sovereign wealth fund is backing property tycoon Nick Candy’s potential bid to buy developer Capco, which has a market value of £2.1bn. The ambassador said there was "no involvement" from Saudi’s Public Investment Fund in Candy Ventures.
Ikea and H&M step up venture capital investments
Ikea and H&M have ploughed hundreds of millions of euros into venture capital investments hoping to capitalise on technologies and products that can help them resist the massive disruption taking place in retail.
IFS: Government will break spending rules
The Institute for Fiscal Studies (IFS) expects the next government to break rules on spending due to levels of borrowing, saying the gap between what the Government spends and what it brings in is set to be higher than previously forecast. The IFS expects the deficit to be higher in each of the next five years, exceeding £55bn this year and £50bn next year. While the Office for Budgetary Responsibility in March suggested that the deficit would likely halve over five years, the IFS expects it to remain at around £50bn, meaning the Government would breach a rule which says borrowing should remain below 2% of national income, passing the figure in 2020/21.
Britain falls behind on growth, investment and exports
TUC analysis shows that growth, investment and exports in Britain are lagging behind those in other leading economies. Between Q2 2017 and Q2 2019, the UK has ranked 30th or worse among the Organisation for Economic Co-operation and Development's (OECD) 36 members in all three categories. In the period, quarterly growth in the UK averaged 1.3% compared to an OECD average of 2.7%, investment fell by 0.2% while it was typically up 3.4% across OECD nations, while UK exports contracted by 2.6% compared with an average of 3.4% growth across the 36 countries.