BoE urged to fast-track licensing of European banks
Bankers and financial lobbyists have said that the Bank of England should fast-track licensing of European banks that want to continue doing business in London after Brexit to avoid cutting off customers and disrupting markets. Establishing fully-fledged subsidiaries can be a costly move for EU-headquartered branches, said a Brexit paper from TheCityUK. The Association for Financial Markets in Europe (AFME) urged the BoE to take a “pragmatic” approach. AFME said that any licence applications for branches already up and running should be “grandfathered” - that is, the existing licence is rolled over - or fast-tracked. AFME warned that the fate of EU bank branches could become a “cliff edge soon”, and especially by March next year, given that 12 months are typically needed to obtain a new licence from a regulator.
Rate shift yet to hit loans
Analysis by Moneyfacts shows that mortgage costs have barely moved following the Bank of England’s base rate rise, while interest costs remain at roughly the same rate they were a year ago. While November saw the base rate climb from 0.25% to 0.5%, the average two-year fixed mortgage has only risen from 2.31% before the shift to 2.34% since. On standard variable rate activity, Charlotte Nelson of Moneyfacts said: “Just 56% of providers have passed on a rise to their SVR, with seven of them choosing to increase their rates by less than the 0.25%, which has caused the average SVR to rise more modestly.” Separately, Labour could look to make mortgage lending more difficult so banks rethink their focus and invest more in smaller firms in industries starved of resources. The suggestion comes in the party’s Financing Investment report.
HSBC prosecution threat in US lifted
HSBC is no longer under threat of prosecution in the US over allegations of money laundering in Mexico. The bank had signed a deferred prosecution agreement (DPA) - a form of probation - with the US Department of Justice in 2012 to avoid facing criminal charges for allegedly laundering for Mexican drug barons. In a statement, HSBC said it had “lived up to all of its commitments” and that the DOJ would file a motion with the US court seeking dismissal of the charges.
ECB forecasts more M&A in bank sector
Danièle Nouy, chair of the supervisory board at the ECB, has said that merger activity in the eurozone bank sector is likely to accelerate given rapid economic growth and a reduction in soured debt. “I think that with growth returning and with the huge amount of work that is being done in relation to non-performing loans, we are going to see a number of mergers taking place within countries and across borders,” Ms Nouy said.
Steinhoff exposure could hit Investec
Investec has warned that its exposure to Poundland's South African owner, Steinhoff, could dent profits. It comes after shares in Steinhoff tanked last week with the firm's chief executive departing. Investec said its exposure represents a “small portion of the group's balance sheet” and it is not “expecting to suffer any losses”. However, it added: “Investec Bank Limited (South Africa) does have certain derivative exposures linked to the Steinhoff share price, where a trading loss could materialise.”
Big banks back cyber security start-up
HSBC, JP Morgan and American Express's venture arm are among investors in a $40m series C funding round for cyber-security start-up Menlo Security, which provides protection against malware. JP Morgan head of private investments Rick Smith said that “phishing has grown to be one of the most common threats to businesses across industries and geographies” while HSBC's head of cyber technology Tim Dawson said “cyber-security is a top priority for us”.
OTP eyes further Serbian acquisitions
Hungary's OTP Bank is ready to acquire another bank in Serbia if an opportunity emerges, OTP Group CEO Sandor Csanyi has revealed. In August, OTP bought the Serbian arm of National Bank of Greece, Vojvodjanska banka, raising its market share to 6%. “If there is appropriate bank in Serbian market we are ready to buy it,” Mr Csanyi said.
ING expands AI pricing tool to more traders
ING has launched its new artificial intelligence bond trading tool “Katana”, which will use data from hundreds of thousands of trades to help the bank's traders to get better bond prices faster.
Firms to deliver homes
Housing association Peabody has announced that it will partner with Berkeley Homes and Redrow to deliver almost 1,800 homes in London. The project with Berkeley will create 1,500 properties in west Thamesmead, while the Redrow tie-up will see 295 apartments built in Newham. Peabody also announced an intention to build 198 affordable homes in Wembley, having acquired former Brent Council land.
Bitcoin futures trading begins in Chicago
Bitcoin has launched on the CBOE futures exchange in Chicago, the first time it has been traded on a major exchange. The move is expected to be followed next week by a listing on the rival Chicago Mercantile Exchange. Meanwhile, Saxo Bank has predicted that bitcoin will peak above $60,000 in 2018 before crashing to its fundamental “production cost” of $1,000 the following year. Separately, South Korea is considering banning all kinds of cryptocurrency transactions, the top financial regulator said yesterday. Financial Services Commission chairman Choi Jong-ku said proposals to restrict buying and selling such currencies, including an all-out ban, were aimed at minimising side-effects of bitcoin transactions and reducing speculative investment.
Finance firms reshoring operations
Financial services companies in the UK are bringing their offshored operations home, according to Robert Half Financial Services. Rising costs and lacklustre service abroad were named as the prime reasons for returning jobs to the UK, a survey from the recruiter revealed. Some 59% of the UK's financial services executives said they had increased their transferring of offshore businesses back to the UK in the past two years, as opposed to just 4% who had decreased it.
Trafigura enjoys record trading
Commodities trader Trafigura said profits fell 9% to $887m (£662m) in the year to September 30. However, trading volumes jumped 19% to 69.9mn tonnes and the firm said it is eyeing further growth thanks to an anticipated surge in electric vehicles.
Cardtronics plans ATM cuts
Cardtronics, the UK's biggest independent cash machine operator, is planning to cut back its network, noted to be by almost 1,500, because of a shake-up in the industry. The company operates about 20,000 machines in the UK, mostly in pubs, local shops and garage forecourts, and the phase out could happen over a four-year period.
Chinese insurer Ping An looks overseas to boost technology
Chinese insurer Ping An has begun using facial recognition technology at its consumer finance unit to screen potential borrowers who may be lying about their intentions to repay their debt.
LEISURE & HOSPITALITY
Investors bowled over with dividend payment
Hollywood Bowl has announced a £4.7m special dividend. The ten-pin bowling group said it will be paying investors 3.33p per share and would raise its ordinary dividend from 0.19p to 3.95p - bringing the total amount of funds returned to shareholders to £13.6m. The firm made the announcement as it revealed full-year profits jumped 88% to £21.1m.
Deltic busy amid hefty pre-tax losses
Bar and club operator Deltic Group, which runs venues under the names Pryzm, Vinyl, Atik, Fiction, and Bar&Beyond, made a £1.48m loss before tax in the 52 weeks to February 2017. While admissions numbers grew 6.9% over the period, boosting revenues 1.4% to £102.2m, underlying earnings fell 2.3% to £13.3m.
Apollo cashes in bookmaker stake
Apollo has sold its 5.8% stake in Ladbrokes Coral via a bookbuilding organised by Morgan Stanley and Barclays. Shares of Britain's biggest bookmaker jumped by about 30% last week after it received a cash-and-shares bid worth up to £3.9bn from GVC Holdings.
OnTheMarket prepares for AIM float
Agents Mutual, the company behind OnTheMarket, is preparing to float on AIM. The firm hopes the move will raise £50m it will use to go after the market share enjoyed by rivals Rightmove and Zoopla, saying cash generated from the listing will be used to boost marketing, sales, customer relations and technology. OnTheMarket is currently Britain's third biggest online property site and Agent Mutual chief executive Ian Springett believes listing will enable it to “challenge the two leading incumbent portals.”