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Daily News Roundup: Thursday, 9th January 2020

Posted: 9th January 2020


Travelex hack hurts banks’ currency supply

The cyber-attack on forex giant Travelex has left high street banks including Barclays, Lloyds and Royal Bank of Scotland without foreign currency services. Supplies of foreign notes were running short after last week's attack, the banks said. HSBC and Virgin Money were also affected as were the banking arms of supermarkets such as Tesco and Sainsbury's. An RBS representative told the BBC: “We are currently unable to accept any travel money orders either online, in branch or by telephone due to issues with our travel money supplier, Travelex.” Separately, experts have warned that financial services firms could be the target of cyber-attacks by Iran in revenge for the killing of Qassem Soleimani.

Customers threaten Tandem Bank over fees

Tandem Bank customers have threatened to close their accounts after the start-up announced it would introduce a £5.99 monthly fee for its cashback card. Chief executive Ricky Knox said the move was made in order to offer a "sustainable" service. The challenger bank has signed up more than 500,000 customers.

Credit card rates rise to record high

Credit card providers increased rates on 21 different credit cards during 2019, as credit card borrowing in Britain rose by 40%. The average interest rate on purchases now stands at a record high of 25.1%.

GCA Altium open office in Midlands

GCA Altium has opened a new office in Birmingham. The investment bank’s new base will be the firm's fourth operation in the UK, joining sites in Leeds, London and Manchester.

Metro Bank to open its fourth West Midlands site

Metro Bank will open its fourth branch in the West Midlands on Friday with a site in Wolverhampton joining branches in Birmingham, Solihull and Merry Hill in Dudley.


Battle lines drawn for Thyssenkrupp’s lucrative lifts unit

German conglomerate Thyssenkrupp is set to sell or float its lifts business with the likes of Blackstone, Carlyle and Cinven all circling for what could be a $20bn deal.

BP makes AI investment in China

BP has invested $3.6m (£2.7m) in Chinese artificial intelligence business R&B Technology. BP Ventures, the company's venture capital arm, led the fundraising round.


Ignoring climate risk is more costly than grappling with it

Recent acquisitions of boutique firms focussing on climate risk analysis indicate a trend towards developing better metrics ahead of climate stress tests for banks and insurers, says UBS’s Huw van Steenis.

Mountain of risky corporate debt poses ‘stability concern’

New York Fed researchers have raised concerns over an increase in sales of riskier corporate debt, warning that the “possibility of a large volume of corporate bond downgrades poses a financial stability concern”.

Thailand’s central bank makes first move to weaken baht

Thailand’s central bank has successfully reduced the value of the baht after governor Veerathai Santiprabhob announced a relaxation of rules on capital outflows.


Ghosn accuses Nissan and Japan of collusion

Carlos Ghosn, the former chairman of Nissan-Renault, held an extraordinary press conference yesterday after fleeing Japan to Lebanon – a move he said was to escape politically motivated persecution orchestrated by “malevolent” Nissan executives with the backing of the Japanese government. At the heart of the conspiracy were concerns over control over Nissan, he claimed, and growing anger in Japan that Renault, backed by the French state, had greater voting rights in the alliance between the two carmakers.


Nearly a third of investment managers fail to consider ESG

According to LCP’s annual Responsible Investment survey, 30% of investment managers are failing to consider environmental, social and governance (ESG) factors as part of their investment process across all asset classes. The pensions advisory firm’s report adds that, despite this, 85% of managers say they integrate ESG factors to improve long-term investment outcomes for their clients. Claire Jones, principal and head of responsible investment at LCP, says the survey results around “climate change considerations are particularly worrying” as is the “lack of clear engagement policies when it comes to responding to the challenges and expectations of modern society.” Ms Jones added: “Stewardship is a vital element of that response, enabling investment managers to help create long-term value for our clients and their beneficiaries, whilst simultaneously providing sustainable benefits for the economy, the environment and society.”

Savings industry is morally bankrupt – Miller

Chris Cummings, the chief executive of the Investment Association (IA), has been criticised for failing to take action on the fees savers are charged by fund managers and the IA’s response to the scandal involving Neil Woodford. Alan Miller, co-founder of investment firm SCM Direct and a proponent of increased transparency in the industry, said: “The Investment Association is no more than a self-serving, intellectually and morally bankrupt mouthpiece for the industry. It has resolutely tried to defend the indefensible and is completely devoid of principles, ethics or integrity.” Miller added: “There are major problems regarding transparency of fees, transparency of holdings, liquidity management and conflicts of interest.” Mr Cummings, speaking on Radio 4’s Today programme, said that there had already been a lot of “innovation” by fund managers in the types of fee structures used.

Von der Leyen insists on level playing field

A new row has broken out over the future of the City’s relationship with the EU after Ursula von der Leyen, the new head of the European Commission, said the UK must follow the bloc’s rules if it wants access to its markets. Ms Von der Leyen said that talks would not be easy and that there would have to be a "number of trade-offs and choices" over financial services. Meanwhile, the former chancellor George Osborne has joined Mark Carney in suggesting “some freedom to be a globalised financial centre would not be a bad thing.”

Natural disasters/reinsurance: flooded with capital

The FT’s Lex suggests reinsurers will be disappointed with the continued influx of capital into the sector due to low interest rates, keeping down the price of reinsurance.


Investors dump NMC Health shares

NMC Health’s stock price tanked on Wednesday after news that Mohamed al-Qebaisi and Khalifa Butti al-Muhairi were looking to offload $490m (£373.53m) of shares.


Ofcom sets out plan for UK rural broadband investment

Ofcom has announced a number of measures intended to drive investment in new fibre infrastructure, particularly in rural areas. In a new five-year plan, the telecoms regulator proposed the introduction of different regulatory regimes for rural and urban areas, plus setting Openreach’s wholesale prices in urban areas in a way that encourages investment and competition. In rural areas, Ofcom plans to support investment by Openreach by allowing it to recover investment costs across the wholesale prices of a wider range of services.

Cicero set to be snapped up by Havas

Cicero is set to join AMO, a network of communications firms owned by or affiliated to Paris-based media giant Havas. The UK's largest public affairs agency will move into Havas' Kings Cross offices this weekend. Cicero will now rebrand to Cicero/AMO.


Halifax reports 4% rise in house prices for 2019

UK house prices rose 4% in 2019, according to Halifax, as a December bounce saw the average property's value jump 1.2%, or £4,000 – the largest monthly rise since February 2007. The Halifax index, based on the lender’s own mortgage approvals, showed the average house price climbed £9,136 last year to £238,963, but the bank said that it only expected “modest” rises in the year ahead. Halifax managing director Russell Galley said: “Looking ahead, longer-term issues such as the shortage of homes for sale and low levels of house-building will continue to limit supply, while the ongoing challenges faced by prospective buyers in raising deposits will serve to constrain demand.” The bank has forecast gains of 1 to 3% for house prices in 2020.


Retailers suffer worst year on record

Retail sales fell for the first time in 24 years last year, according to figures from the British Retail Consortium (BRC). Total retail sales in stores and online fell by 0.1% in 2019. Helen Dickinson, chief executive of the BRC, said sales had been driven down by the collapse of well-known high street brands, soaring costs and flagging consumer confidence.

Ted Baker’s lenders appoint advisers

Ted Baker’s banking syndicate, which includes Barclays and Royal Bank of Scotland, have appointed restructuring experts to undertake an independent business review which could result in the lenders further tightening the terms on which they provide debt to the fashion retailer.


UK productivity rises slightly after year of contraction

Official figures released yesterday by the Office for National Statistics (ONS) show output per hour worked - the standard measure of productivity - grew only marginally in the third quarter of 2019 following four successive quarters of contraction. In the services sector, which accounts for 80% of the economy, output per hour rose by 0.1%. Productivity in the construction sector was up by 5.7% while manufacturing productivity fell by 1.9%. “Although productivity grew on the year, the underlying picture is of sustained weakness since 2008, with growth over the past year being only a third of the average over the past 10 years or so,” said Katherine Kent, head of productivity at ONS.


World Bank warns of global debt crisis

The World Bank has warned that the latest wave of debt accumulation is the largest since the 1970s and that a small recovery in world output predicted for 2020 “is largely predicated on a rebound in a small group of large emerging market and developing economies, most of which are emerging from deep recessions or sharp slowdowns”. Total emerging and developing economy debt reached almost 170% of GDP in 2018 – or $55tn (£42tn) – an increase of 54 percentage points since 2010. The debt mountain leaves economies vulnerable to an unexpected spike in interest rates, the World Bank said, warning “the three previous waves of debt accumulation in debt have ended badly”.

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