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Daily News Roundup: Tuesday, 16th April 2019

Posted: 16th April 2019


Bramson steps up effort to woo Barclays shareholders

Ed Bramson has renewed his appeal to Barclays’ shareholders to give him a seat on its board in the run up to the bank’s 2 May annual general meeting. Mr Bramson’s Sherborne Investors vehicle has written to Barclays shareholders, warning that the bank’s low valuation “will continue until the board finally adopts a strategy that is more realistic and shareholder orientated”. Mr Bramson has also extended the duration of an arrangement with Bank of America that allowed him to build the majority of his stake in Barclays with a $1.4bn loan.

N26 seeking UK specialist team

Digital bank N26 intends to hire a team of dedicated employees for the UK market as it seeks to compete with rivals Monzo and Revolut. The German start-up is now signing up 1,000 customers every day in the UK following its launch in October. It has also raised more than $500m (£381m) in venture capital in recent years.

Corbyn as bad for banks as a no-deal Brexit, Citi warns

Citigroup has told clients that the election of Jeremy Corbyn as prime minister would be just as bad for UK banks as a no-deal Brexit. The US bank said that it has reviewed the Labour Party's pledges and come to the conclusion that the impact for UK banks "could potentially be similar in magnitude to a no-deal Brexit outcome". Meanwhile, Citi’s first quarter 2019 results have seen investment banking revenue rise 20%.

RBS censured for tough stance on leasehold mortgage holders

Peter Bottomley MP has called on Royal Bank of Scotland to stop penalising mortgage customers who fall into arrears owing to disputes with their freeholder or property management company.

One in five post offices could close

A survey of post office workers by the National Federation of SubPostmasters suggests more than one in five post offices may disappear over the next 12 months. Postmasters voiced concerns about falling incomes and higher costs, as well as low transaction rates for banking services and fewer people using a Post Office card account.

TSB pledge could pay off

The I’s James Moore welcomes TSB’s pledge to offer customers a fraud refund guarantee. He says that in “taking unilateral action, TSB might just have discovered a competitive advantage through doing the right thing.”


Quant funds train sights on private equity market

Parts of the quantitative investment industry are increasingly keen on private buyout funds, with Morgan Stanley estimating that revenues from private capital will reach nearly $70bn a year by 2023.


Pay cut at Goldman as profits fall

Bankers at Goldman Sachs have been hit with a pay cut following a slow start to the year. The Wall Street lender’s first-quarter results showed a 21% fall in profits in the first three months of the year to $2.3bn compared to $2.8bn in the same period last year. In response, Goldman said it was cutting its salaries and benefits pot by $798m (£609m) to $3.3bn, a move that will hit executives, senior managers and lower-level staff. However, chief executive David Solomon said he was pleased with the results "in the context of a muted start to the year". He also said he would wait until the first quarter of 2020 before providing a “comprehensive strategic update” for Goldman.

Bonus cap backfired

A report conducted by the Halle Institute for Economic Research suggests the EU's bank bonus cap pushed up executive salaries by an average of more than €1m (£863,000) but failed to cut risk-taking. With less chance to earn a bonus, bankers also worked less hard, according to the report presented to the Royal Economic Society.

UniCredit agrees to pay $1.3bn to settle US sanctions probes

UniCredit has agreed a $1.3bn settlement with US authorities over allegations that it violated multiple US sanctions programmes related to Iran, Libya, Sudan, Syria, Cuba and Burma.

Credit Suisse to take majority stake in Chinese joint venture

Credit Suisse has reached an agreement with Chinese securities venture Founder Securities to increase its stake in their joint venture to 51% from 33.3%.


Gunning takes on CFO role at IAG

British Airways' finance boss Steve Gunning is to replace Enrique Dupuy de Lôme as CFO at parent company IAG. Gunning has been CFO at British Airways since 2016 and acting director of IAG global business services since December 2017.


Kier Group boss embarks on strategic review

Kier Group chief executive Andrew Davies will seek to reallocate capital and generate more cash over the coming months as the firm continues to seek ways to address its hundreds of millions of pounds of debt. The firm’s share price has fallen by nearly 70% in the last year, while its net debt at the end of 2018 was £180.5m.

Hill founders gets dividend boost

The family behind privately-owned housebuilder Hill picked up dividends of more than £3m last year as growth soared. Founder Andy Hill said partnerships with local councils and the Government’s Help to Buy scheme helped boost revenues by about a fifth to £502m in 2018.


LGIM ups pressure over corporate governance

Legal & General Investment Management opposed proposals tabled by almost 400 UK companies last year, a sharp increase on the previous 12 months. Britain’s biggest fund manager voted against at least one resolution put to shareholders at 386 British companies in 2018, including one abstention, representing a 53% increase on the 252 companies where it rebelled in 2017. In total last year LGIM either opposed or abstained on resolutions at 2,438 companies worldwide, accounting for 73% of the businesses where the investment firm cast a vote, up from 59% in 2017.

Sub-prime merger facing further delay

The Takeover Panel has delayed the next steps of an attempted hostile takeover of Provident Financial by Non-Standard Finance while the Competition and Markets Authority considers the impact of combining the sub-prime lenders. The Panel said that tomorrow’s deadline for Provident to publish new information related to the bid would be delayed until two days after a decision by the CMA.

Bank warns investors to prepare for climate risks

The Bank of England has warned that the global financial system could be left holding $20tn of worthless assets as a result of environment-related risks if investors fail to prepare now. Sarah Breeden, head of international banks supervision at Threadneedle Street, said the shock could be so severe that it could trigger a "climate Minsky moment", where a plunge in asset prices derails global growth.

FCA flags 'guarantor' lender concerns

The Financial Conduct Authority has indicated it is preparing a crackdown on 'guarantor' lenders amid revelations Amigo targeted higher-risk borrowers before its £1.3bn stock market float. The watchdog said it is concerned about the number of guarantors who are having to step in and repay debts.

Coinbase rises on crypto bubble

Coinbase made €153m (£130m) in revenue last year from its UK business, up from €127m in 2017. The cryptocurrency trading start-up emerged as one of the major winners of the Bitcoin bubble, which saw the price of the digital coin soar to around $20,000 in late 2017.


Fees rise at recruiter

Recruiter Robert Walters has reported a 10% rise in fees for its UK operations. The increase in net fee income in Britain, which makes up about a quarter of the firm’s turnover, represents an improvement from the 2% growth reported in the final three months of 2018.


House prices up in April

Rightmove has said the average asking price for a home rose by £3,447, or 1.1%, in April - marking the biggest month-on-month uplift in over a year. The average asking price on a home is now £305,449.

IWG soaring after Japanese deal

IWG has said more deals are forthcoming after the firm agreed to sell its Japanese business to Tokyo-listed rival TKP Corporation for £320m, increasing its share value by more than a fifth.


New metrics reveal economy slowdown

New government economic indicators compiled by the ONS have suggested that the UK economy slowed in March, with more firms reporting a fall in turnover than an increase over the month. The ONS’s new ‘VAT diffusion index’ showed more firms in both the construction and wholesale and retail trade sectors reporting a fall in turnover than a rise in March, compared to the month prior. The findings are the first from an ONS project that aims to use ‘big data’ to give a faster assessment of the health of Britain’s economy than official statistics.


Dividend payouts at record high

Dividend payouts from British firms have reached a record high in the first three months of the year, according to Link Asset Services. The data provider found FTSE companies paid out a total of £19.7bn over the period.

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