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Daily News Roundup: Tuesday, 14th January 2020

Posted: 14th January 2020

BANKING

Starling refreshes small business accounts

Starling Bank has added a range of new features to its business and sole trader accounts including unsecured loans of up to £250,000, an increase in overdraft limits from £10,000 to £150,000, more competitive overdraft rates and a custom-built tax and financial management Toolkit. Founder Anne Boden said: "Life as a small business owner can be a balancing act and time is often in short supply. We've built new features in the Business Toolkit to help save time and money, while cutting down on paperwork and hassle."

Banks asked to help gambling addicts

Plans for betting companies to ban customers using credit cards does not go far enough, campaigners say. Adam Bradford, of the Safer Online Gambling Group, wants banks to introduce prompts and blocks to protect vulnerable gamblers.

Senior banker leaves Lazard

Amid increasing competition between boutique advisers and large banks, Lazard has been hit by the departure of managing director Giles Corner, who has been at the forefront of efforts to expand Lazard’s work on mid-cap private equity deals.

FCA expected to appoint temporary head

The Financial Conduct Authority (FCA) could shortly appoint an interim chief while a replacement is found for outgoing boss Andrew Bailey. A source told the Telegraph the caretaker boss will preferably be an insider. Mr Bailey replaces Bank of England Governor Mark Carney in March.

PRIVATE EQUITY

Goodlad joins Rede Partners

Independent private equity fundraiser Rede Partners has hired Magnus Goodlad as head of transactions. Previous roles for Mr Goodlad include chief of staff to Lord Rothschild and partner at Hermes GPE.

INTERNATIONAL

Goldman probes insider trading claims

Goldman Sachs is investigating claims by Swiss trader Marc Demane Debih that he gleaned information from his former girlfriend Zeynep Yenel, who continues to work in the London office, about companies she was working for. Demane Debih has pleaded guilty to insider trading charges and made the claims in a New York court last week. There is no suggestion that Ms Yenel was involved in the insider-trading ring.

Banks lobby Aramco for more cash

International banks are lobbying Saudi Aramco to try and extract more cash for their work on the Saudi oil giant’s IPO. Banks are hoping for the payment of the "incentive fee" – an extra sum which can be paid if the listing is successful. City AM says most banks involved in selling Aramco's shares will earn less than $5m each.

Japan’s regional banks face shake-up as regulator shifts strategy

Japan’s top financial regulator is planning a shake-up for the country’s struggling regional banks, including allowing them to enter new areas of business to help boost profitability.

AUTOMOTIVE

Carmakers under pressure over emissions

A report from PA Consulting predicts that Europe’s top carmakers will face €14.5bn (£12.4bn) in fines for missing their 2021 emissions targets. The continued popularity of SUVs and a shift to petrol over diesel combined with low take-up of electric vehicles means emissions have continued to climb. Meanwhile, tests by green campaigners have found some diesel cars are exceeding legal emissions limits by more than 100% during the process of clearing their diesel particulate filters.

Porsche reports record sales

German luxury manufacturer Porsche has defied an industry slowdown as it reported global deliveries up 10% to 280,000 cars in 2019, driven by demand for the Macan and Cayenne SUV models.

Aston Martin needs £500m in cash

Analysts says Aston Martin needs £500m in cash to put the business on a sound footing. The luxury carmaker has suffered falling sales and profits and has to contend with a £900m debt pile.

AVIATION

Flybe in last-ditch talks to avoid collapse

Flybe is in talks with the government to defer a multi-million pound air passenger duty bill amid reports the airline is attempting to secure a rescue deal. The company was rescued last year by a consortium led by Virgin Atlantic which paid £2.8m for the airline. More than 2,000 jobs are at risk if Flybe fails to strike a deal to secure funding. But its collapse would also be a blow to regional airports and the government’s hopes of improving regional connectivity.

FINANCIAL SERVICES

Link and FCA under fire over Woodford debacle

Link Fund Solutions, which supervised Neil Woodford's management of his flagship Equity Income fund and smaller Income Focus fund has come under fire from former City minister Lord Myners who said Link should have done more for investors’ interests before the funds hit crisis point. Lord Myners blamed the Financial Conduct Authority for putting in place weak rules, the Mail reports. He added: “I think the FCA is guilty of creating a real missed opportunity.” The paper’s Alex Brummer asserts that the FCA’s failure “to fully get to grips with the Woodford scandal and all of those who have profited at the expense of hapless investors is reprehensible.”

Schirp calls for special audit of Wirecard

German Law firm Schirp has called for a special audit of payments company Wirecard, which is facing allegations of fraud and false accounting, on behalf of a small group of shareholders. The FT previously reported that Wirecard’s Singapore office made fake book-keeping entries to pad its revenues. Its in-house auditor investigated those claims and gave Wirecard management a clean bill of health. The company denied the allegations and sued the FT, which stands by its reporting. "We want to clarify as quickly as possible what is happening at Wirecard," lawyer Wolfgang Schirp said.

Travelex services remain down

Banks that use Travelex to run their foreign exchange services, such as Barclays, Lloyds and RBS, are still unable to sell travel money two weeks after the firm was hit by a cyber-attack. Travelex said it had contained the virus and its investigations showed that no customer data had been breached to date but refused to say when services will be restored.

EU says fishing rights could be swapped for financial services access

The City of London’s access to the single market could be preserved in return for access to the UK’s fishing waters, Brussels trade commissioner Phil Hogan has said. Hogan, who is Irish and a fierce critic of Brexit, told the Irish Independent: "There certainly will be trade-offs, particularly at the end of the negotiations."

Visa acquires Plaid for $5.3bn

Visa is to buy US payments software giant Plaid for $5.3bn (£4.1bn). Plaid helps companies connect to users' bank accounts and was last valued at $2.65bn in a funding round in 2018.

Creativity will pay for the next generation of asset managers

Kempen & Co’s Anneka Treon argues that the asset management industry would benefit from “greater flexibility and a stronger sense of entrepreneurship.”

HEALTHCARE

Deutsche working on pharma sale

Cambridge-based pharmaceutical company Mundipharma has been put up for sale by the Sackler family with Deutsche Bank hired to find a buyer.

AstraZeneca pays for failed heart disease trial

AstraZeneca has decided to close a late-stage study of heart disease drug Epanova, costing the pharmaceuticals company $100m.

LEISURE & HOSPITALITY

William Hill raises outlook

William Hill said profits are expected to be higher than predicted at between £143m and £148m when it reports full-year results on Feb 26, buoyed by sporting results favouring the bookmaker.

The City Pub Group warns of lower profits

The City Pub Group has warned that a number of “one-off factors” in the fourth quarter were likely to lead to profits being lower than the predicted £9.9m.

MANUFACTURING

BofA guns for BAE Systems

BAE Systems climbed 21.2p to hit 614p on the FTSE 100 yesterday after Bank of America raised its outlook on the company, pointing specifically at the group's M109 howitzer project.

MEDIA & ENTERTAINMENT

Alphabet approaching $1tn valuation

Shares in Google-parent Alphabet edged to within 1% of the $1tn market capitalisation last week amid a raft of positive coverage by analysts excited over its advertising potential. Alphabet is due to announce its fourth-quarter earnings on February 3.

PROFESSIONAL SERVICES

Andrew Tyrie meets Big Four bosses as audit reform slows

The chairman of the Competition and Markets Authority has met with Big Four bosses recently amid concerns audit market reform is stalling. The FT’s Lombard says it is a year since Sir John Kingman called for the FRC to be replaced by ARGA, yet despite three reviews of the audit profession, the government is ducking out of giving a deadline on legislation to improve the sector.

REAL ESTATE

UK housing stock reaches record value

The UK’s housing stock has reached a record value of £7.39tn, after new housing in 2019 accounted for 40% (£41bn) of the value uplift as development accelerated and house price inflation slowed. Growth in the value of existing homes was £2.39tn over the last ten years, accounting for 87% of the increase, while new housing development added £35bn. Total gains last year were up 1.4% to £101.8bn, though the value of housing across the UK has increased by £2.74tn over the last decade.

RETAIL

Travis Perkins sells plumbing arm

Travis Perkins has sold off its plumbing and heating business to distribution group Newbury Investments for £46m. The sale comes just four months after the builders’ merchant halted the sale of the unit, called Primaflow, blaming “unprecedented uncertainty”.

SPORT

Barcelona tops football’s rich list for first time

Arsenal have fallen out of the world top ten for earnings for the first time in nearly 20 years, according to new analysis, while Manchester United are expected to be overtaken by either Liverpool or Manchester City at the end of the season for revenue. Barcelona were the biggest earners last season, topping the Money League for the first time, with Real Madrid second and United third.

Betting firms face ban on shirt deals

Ministers are considering a blanket ban on betting companies sponsoring football club shirts. The move would impact half the clubs in the Premier League and 15 of 24 in the Sky Bet Championship.

ECONOMY

UK economy contracted in November

Figures from the Office for National Statistics (ONS) show that the UK economy shrank 0.3% in November on the previous month, less than the 0% growth forecast by economists, while in the three months to November GDP grew by just 0.9% on the same period the year before - its weakest pace of annual growth since the spring of 2012. The ONS figures show that November’s manufacturing output was down 1.7% while services were also down 0.3%. However, construction grew by 1.9% compared with October. The UK’s trade balance hit a record high surplus of £4bn in November and the three months to November saw the surplus stand at £1.1bn - the second consecutive quarter in the black. The next two weeks will see the release of key survey data which will be crucial to Bank of England policymakers as they consider whether to cut rates.

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