Competition Appeal Tribunal hears the case for legal claim against banks
Michael O’Higgins, a former senior official at the Treasury who is leading a multi-billion lawsuit against some of the UK’s biggest banks, insists bankers accused of rigging foreign exchange markets “need to be held to account”. He was addressing a Competition Appeal Tribunal, with a judge set to decide whether to allow the legal claim against Barclays, Citibank, Royal Bank of Scotland, JPMorgan and UBS to go ahead. Former Pensions Regulator chairman Mr O’Higgins and Phillip Evans, previously an executive at the Competition and Markets Authority, each want to lead a class action-style lawsuit after traders exchanged sensitive information and trading plans in online chatrooms between 2007 and 2013. The practice could have caused bank customers, including pension funds, asset managers, hedge funds and corporates, to lose vast sums. Mr O’Higgins said that while Treasury officials were “working tirelessly to save the banking system” amid the financial crisis and its aftermath, “little did I, or they, know that people in some of the major banks were actively engaging in anti-competitive cartel behaviour in the foreign exchange markets”. It is noted that banks have already been fined more than £900m for participating in cartels by the European Commission.
Tide valued at $650m
Fintech start-up Tide has raised over $100m in Series C funding, bringing its valuation to over $650m. It has raised a total of $200m to date including the latest funding, which was led by the growth arm of private equity firm Apax Partners. The firm said the cash injection will allow it to grow its market share and expand internationally. Tide, founded in 2015, provides mobile-first banking services for SMEs and saw its UK customer base more than double during 2020, with more than 350,000 customers now registered.
Sweet deal for Tate & Lyle
A break-up of Tate & Lyle is under way after US private equity firm KPS Capital Partners took a controlling stake in its sweetener division. The £940m deal will see Tate & Lyle retain a 50% stake but lose control of the company's operations and board. Chief executive Nick Hampton said the deal means “one strong company will become two stronger businesses, both in a position to pursue new and exciting growth opportunities in their respective markets”.
Private equity and the raid on corporate Britain
The FT looks at how depressed valuations of UK firms are driving interest from buyout firms, highlighting that the private equity industry is striking “larger and more frequent” deals.
Credit Suisse chief compliance officer leaves
Credit Suisse has announced that Swiss chief compliance officer Floriana Scarlato is to leave with immediate effect to explore opportunities elsewhere. Ms Scarlato’s departure follows the exit of another chief risk and compliance officer at the bank, Lara Warner, who left in April. Credit Suisse has separately named Markus Ruetimann, an ex-UBS manager, as the new global chief operating officer of Credit Suisse Asset Management.
Goldman Sachs considers paying graduates six figure salaries
Goldman Sachs may offer graduate workers a six-figure salary as it considers bumping up pay to keep pace with rivals. The firm may up the rate it offers investment bankers joining from university after rivals including Citigroup, JPMorgan and Barclays raised comparable fixed salaries for their US recruits to $100,000.
Admiral raises profit forecast
Insurance group Admiral has raised its half-year profit forecasts after pandemic-related lockdowns forced more customers to stay off the road, resulting in fewer car accident claims. The firm said pre-tax profits would probably total £450m-500m for the first six months of the financial year, almost double the £286m it reported for the same period in 2020. Deutsche Bank had forecast profits of about £270m, while UBS had pointed to a figure of around £250m. Admiral said in a trading update: “The stronger result is due to unusually positive development in the cost of UK motor bodily injury claims”.
Revenues rise at Charles Stanley
Charles Stanley has reported that its total funds under management and administration increased by almost 6% to £27bn as of June 30, up from £25.6bn on March 31. The company said its three divisions posted revenue increases, with financial planning and the newly-created central financial services divisions growing at double digits. Total revenue for the quarter was up by 8% to £45.6m.
ESG hiring on the rise
Research by headhunter New Street Consulting reveals that there has been a 50% increase in the number of jobs in the ESG space, with the number of people involved in ESG analysis in financial services companies up from 460 to 690 in 12 months. Consultant Jack Payne stated: “ESG is now simply considered as good corporate strategy,
good business and good economics."
J&J talking to US regulators about rare neurological side effect of vaccine
Johnson & Johnson has revealed that it has been in talks with US regulators about a rare neurological side effect of its Covid-19 vaccine.
Think-tank urges tax breaks for manufacturing sector
Conservative MPs in the so-called “red wall” are backing calls for Boris Johnson to offer tax breaks for manufacturing as part of levelling up plans. A report from think-tank Onward urges the Prime Minister to set out a national plan for manufacturing, including tax breaks for factories and extra investment into technology. Onward’s Making A Comeback report, which is backed by 65 Conservative MPs, has called on ministers to set out tax incentives for capital investment, among other proposals.
MEDIA & ENTERTAINMENT
DMGT receives approaches for insurance risk unit
Daily Mail & General Trust (DMGT) could be taken private, with owner Lord Rothermere confirming that he has received approaches for
its insurance risk business. The company announced that disposal of the unit “would mark a further significant milestone in the
transformation of DMGT.”
CVC buys stake in Aleph Holding
CVC Capital Partners has bought a stake in Aleph Holding worth $470m, valuing the digital media company at around $2bn. Aleph helps digital media firms, including social media companies such as Facebook, Twitter, LinkedIn and Snapchat, connect with advertisers across the globe.
House sales slip as stamp duty holiday winds down
Analysis shows that house sales were down 60% on the five year average in the first week of July, with this coinciding with the tapering of the stamp duty holiday. As of July 1, the tax-free rate fell from £500,000 to £250,00, with the rate set to return to the pre-pandemic £125,000 in October. The fall recorded in the opening week of July follows a bumper June, with the number of property transactions last month set to be the highest on record. The analysis also shows that demand remains strong, with the number of new prospective buyers registering in the first week of July 31% higher than the five-year average for that week.
Investors target shopping centres
Sam Chambers discusses how cash-rich buyers are targeting shopping centres, with a growing number of investors believing that the retail industry's darkest moments are behind them. Data shows that 38 shopping centres have sold at a total value of £550m in the first half of this year, yielding 12.8% on average. That compares with £575m in the first half of 2019, when yields averaged 8.5%.
Retail sector sees fastest quarterly growth on record
Analysis of consumer spending by the British Retail Consortium (BRC) shows that the retail sector has seen the fastest quarterly growth on record. Retail sales were 13.1% higher in June than in the same month two years ago, while the total for Q2 2021 was 10.4% up on the same three-month period of 2019. The analysis compares this year to 2019 as 2020’s figures were distorted by a downturn caused by the early stages of the pandemic. Helen Dickinson, chief executive of the BRC, said: “The second quarter of 2021 saw exceptional growth as the gradual unlocking of the UK economy encouraged a release of pent-up demand built up over previous lockdowns”.
Consumer spending climbs - Barclaycard
Consumer spending figures from Barclaycard show that activity in June was 11.1% higher than in the same month of 2019. Barclaycard said spending on fuel, hotels, resorts and accommodation all grew for the first time since the pandemic began. Spending at pubs and bars rose by 38.1% as customers opted to watch big sporting events, while spending on fuel increased by 3.6%. While the report shows that face-to-face retail grew 9.7%, there were signs that pent-up demand was easing off, with clothing and furniture stores recording smaller increases than in May. Raheel Ahmed, head of consumer products at Barclaycard, said: “June saw Brits flock back to pubs, bars and beer gardens to watch the football and tennis on the big screens, as the heatwave early in the month encouraged many of us to get out in the sunshine and socialise”.
England’s lockdown rules to end next week
England will remove many of its remaining lockdown restrictions on July 19, although some guidance will remain. There will no longer be any limits on how many people can meet and the 1m-plus distancing rule will be removed. Nightclubs will also be allowed to reopen and capacity limits will be removed for all venues and events. Confirming that the restrictions will be lifted, Prime Minister Boris Johnson stressed the importance of proceeding with caution, warning "this pandemic is not over". He told a Downing Street press conference: “We cannot simply revert instantly … to life as it was before Covid”. Health Secretary Sajid Javid said people should act with "personal responsibility", saying face coverings were still "expected and recommended" in crowded indoor areas and suggesting people should "try to meet people outside where possible". As part of the lifting of restrictions, the requirement to self-isolate if contacted by NHS Test and Trace will remain in place until August 16, when it will be relaxed for people who are fully vaccinated and for the under-18s.