RBS leads on branch closures
Analysis shows that RBS has closed a greater proportion of its branches than any of its rivals in the last eight years. The bank, which is owned by NatWest, has shuttered more than 80% of its locations since 2015. It has shut 451 branches since 2015 and is preparing to close two more this year, which will leave just 104 sites still open. Figures from consumer group Which? show that the Co-operative Bank has shut 77.3% of its network, with 170 sites closing over the last eight years. There are just 50 branches remaining. Barclays has shut 74.4% of its network since 2015 and by the end of 2023 it will have closed 1,140 sites –more than any other bank. HSBC has closed 68.3% of its branches over the past eight years, while TSB has closed 66.9%, Virgin Money has shut 64.7% and NatWest has closed 61.8%. Lloyds has reduced its network by 52.5%. Lloyds-owned Bank of Scotland and Halifax have lost 45.4% and 26.7% of their sites, respectively. Santander, meanwhile, has closed 51.8%. A spokesman for UK Finance said: “A decision to close a branch is never taken lightly and only after an extensive review of how much it is being used and the other options in the local area.”
Alba Bank appoints industry veterans for senior roles
Alba Bank, the UK's newest challenger bank, has appointed Robert Sharpe as chair of the board and Andrew Lewis as chief risk officer. Mr Sharpe, who also chairs Metro Bank, Hampshire Trust Bank, and Pollen Street, brings over 45 years of experience in retail banking. Mr Lewis, meanwhile, has over 25 years of experience in financial services and joins from Aldermore Bank, where he was chief risk officer.
DX Group targeted by private equity with £300m proposal
DX Group has received a non-binding and conditional proposal worth £300m from private equity firm HIG European Capital Partners. The board of DX Group, which specialises in next-day or scheduled delivery of high-value items, is prepared to recommend the offer if HIG tables a formal bid.
US SEC fines investment firms $850k
The US Securities and Exchange Commission (SEC) has ordered nine investment advisory firms to pay a total of $850,000 in civil penalties for advertising hypothetical performance without implementing new policies required by regulators. The SEC found that the firms had not met the requirements of a 2020 rule that bans advisers from touting hypothetical performance to investors unless they have policies designed to ensure that it is relevant to the intended audience. The charged companies - Banorte Asset Management, BTS Asset Management, Elm Partners Management, Hansen and Associates Financial Group, Linden Thomas Advisory Services, Macroclimate, McElhenny Sheffield Capital Management, MRA Advisory Group, and Trowbridge Capital Partners - did not admit or deny the SEC's allegations. They have been handed penalties ranging from $50,000 to $175,000.
Societe Generale and Brookfield create €10bn credit fund
Societe Generale has partnered with Canadian investment manager Brookfield to create a credit fund with a target of €10bn. The fund, which will launch with €2.5bn of seed funding, aims to raise the full amount over the next four years. Initial funding will be directed towards renewable energy, transport, and fund finance. Societe Generale and Brookfield plan to expand their presence in financing the global economy by providing large commitments with different forms of capital.
Investment banking fees down at BoA
Investment banking fees are down 30% to 35% in the third quarter compared to last year, but Bank of America's chief financial officer, Alastair Borthwick, believes the bank will perform better than the industry average. Mr Borthwick also noted that income at the bank's global markets business is expected to rise in the low, single-digit range. Bank of America reported strong gains in investment banking in the second quarter, with net income increasing by 76% to $2.7bn. The gains were attributed to higher interest payments and leasing revenue.
Finance hits back against US regulator’s rulemaking spree
Chairman Gary Gensler’s reforms of the Securities and Exchange Commission have been questioned by the financial industry, with some critics suggesting the watchdog is exceeding the limits of its authority.
Former Bank of Ireland chief leaves Credit Suisse
Former Bank of Ireland chief executive Francesca McDonagh is leaving her role as chief operations officer at Credit Suisse in one of the highest profile departures since its takeover by UBS.
BMW announces Mini factory investment
BMW has announced plans to invest in preparing its Mini factory near Oxford to build a new generation of electric cars. Production of two new electric models is due to begin at the plant in Cowley in 2026. BMW will spend £600m on updating the plant, developing the production lines, extending its body shop and building a new area for installing batteries. The investment will be backed by funding from the Government which is understood to be worth £75m. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the announcement represents a "vote of confidence" in the country's automotive manufacturing industry. He added: “Investments such as this improve productivity and help deliver jobs, growth and economic benefits for the country."
Housebuilder shifts focus to social and affordable housing
Vistry Group has announced that its housebuilding division is to merge with its "high return, capital light, resilient" partnerships division - which works with the public sector and housing associations - as part of a pivot to develop more affordable housing. Investec analyst Aynsley Lammin says that as "long as the registered providers, local authorities and public rental sector have the funding there is a great need and demand for new housing from them."
LSE appoints deputy chief
The London Stock Exchange has promoted Charlie Walker, its head of primary markets, to deputy chief executive. He will join the board while continuing to oversee the group’s private markets business. His appointment comes as the stock exchange looks to push ahead with reforms in an effort to keep pace with international peers. Welcoming the appointment of Mr Walker, chief executive Julia Hoggett said: “I look forward to delivering on our plans to enhance our financial ecosystem and the global competitiveness of the UK capital markets.”
Activist hedge fund builds stake in IG Group
Activist hedge fund Phase 2 Partners has acquired a stake in IG Group, Britain's oldest spread-betting company. This comes at a time of uncertainty for FTSE 250 company IG, which is seeking a new boss after June Felix stood down after five years in charge. Charlie Rozes, IG's finance chief, has stepped up to become its acting chief executive while the board decides on a permanent appointment.
LEISURE & HOSPITALITY
The Restaurant Group offloads Frankie & Benny’s
The Restaurant Group is to offload its Frankie and Benny’s and Chiquito sites to the owner of Cafe Rouge, The Big Table Group. As part of the deal, the buyer, owned by private equity firm Epiris, is paying a nominal £1 for the business but will receive a cash sum of £7.5m in recognition that it is taking on a business that made a loss last year of £65m. The deal will see Big Table acquire 75 restaurants, together with the central costs and 3,000 employees needed to run the sites.
Supermarkets cutting prices in battle for shoppers
Supermarkets have made 34 announcements on cutting prices since the start of May as part of efforts to attract shoppers. Aldi has announced its biggest round of cuts this year, reducing the cost of 55 items by an average of 11%. Waitrose has also announced cheaper roast dinner staples including whole chickens and roasting potatoes, as part of price cuts for 250 products. Those cuts will come into force tomorrow.
Jobs market ‘perfect storm' fuelling inflation
Research from the Centre for Economics and Business Research (CEBR) and recruitment agency Robert Half suggests that a “perfect storm” in the jobs market risks creating a “wage-price spiral” that would make it harder to bring down inflation. Rising wages have made workers more confident that they can receive higher pay, while staff shortages have encouraged workers to leave their jobs to secure a higher wage. The report notes that a shortage of candidates means companies are increasing wages. Matt Weston, senior managing director at Robert Half, said workers leaving jobs to seek better pay elsewhere is creating a “perfect storm” of pressures, adding: “Affected businesses consequently need to deal with such talent loss in a tight market, fuelling the wage spiral we are seeing today.”
Europe's economic outlook worsens
The EU has lowered its forecast for economic growth this year and next, with inflation hitting consumer spending and higher interest rates meaning credit is restricted. The European Commission says the 20 countries using the euro currency are expected to see growth of 0.8% this year – down from a previous estimate of 1.1%. For 2024, growth expectations have been lowered to 1.3% from 1.6%. For the EU as whole, the forecast has been lowered to 0.8% from 1% this year and to 1.4% from 1.7% next year.