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Daily News Roundup: Tuesday, 16th February 2021

Posted: 16th February 2021


Digital banks lead customer league table

An Ipsos MORI survey commissioned by the Competition and Markets Authority (CMA) has found that customers believe fintech firms provide better service than traditional banks. The study gauged opinion of around 1,000 customers from each of the 19 biggest personal current account providers, with Monzo and First Direct coming out on top for overall service quality, with 85% and 83% of customers likely to recommend their services, respectively. Metro Bank led the way in regard to overdrafts and in-branch facilities. Tesco Bank and Royal Bank of Scotland shared bottom spot on the league table, with only 47% of customers willing to endorse their services. Adam Land, senior director at the Competition and Markets Authority, commented: “These league tables are an invaluable resource for customers to find the best service on offer to suit their needs. By being able to access data on the best and worst performing banks and building societies, people can easily compare providers, driving more competition to improve the overall quality of service.”

Loan debt agency plan scrapped

The banking industry is set to abandon plans to create an agency designed to collect overdue emergency coronavirus loans, with lenders likely to opt to recover money themselves. UK Finance last year launched a feasibility study into the creation of a vehicle that would oversee debt collection on behalf of lenders, with it suggested this would help ease pressure as banks looked to pull in taxpayer-backed debt. UK Finance said the “detailed design of a collective approach to debt recovery is still in development”. It added, however, that individual lenders “may want to take their own view to recoveries.” The Times notes that minsters have set out “recoveries protocols”, detailing expectations on how banks should behave while recovering loans, adding that the British Business Bank will monitor collection activities.


Green light for Credit Agricole's Creval bid

Italian officials have approved Credit Agricole Italia’s takeover plans for Credito Valtellinese (Creval). Credit Agricole Italia offered €10.50 euros a share to buy Creval for a total investment of €737 in November.

NAB cash earnings rise

National Australia Bank saw a 47% increase in cash earnings during its first quarter trading. Despite this, CEO Ross McEwan warned there were still uncertainties, pointing to the impact of ongoing health alerts and measures to contain the spread of COVID-19.


New Land Rover CEO outlines electric vision

New Jaguar Land Rover chief executive Thierry Bolloré has announced that the first electric Land Rover will go on sale in three years’ time, while the Jaguar range will be entirely electric by 2025.

Nissan declares it is not in talks with Apple

Nissan has announced that it is not in negotiations with Apple about producing autonomous vehicles. Hyundai and its affiliate Kia issued similar statements recently amid rumours of a collaboration with the technology firm.


Questions raised over Woodford return

Concerns have been expressed over investor Neil Woodford’s plans for a comeback following the collapse of Woodford Investment Management. Mr Woodford, who revealed his plans over the weekend, said he does not expect to be banned as he did not do anything outside the boundaries of Financial Conduct Authority (FCA) rules. Alan Miller, who runs SCM Direct, described Mr Woodford’s return as “astonishing”. Noting that the FCA has not completed an investigation into the fund’s failure and that Mr Woodford remains an authorised person, he urged the Treasury Select Committee to “put an end to this farce”, calling for independent investigation that covers the role of the regulator. Paul Resnik, chief ethics officer of the Suitable Advice Institute, said the results of FCA analysis and the outcomes of impending court cases and class actions need to be seen before Mr Woodford be allowed to open a new fund. Former Pensions Minister Baroness Altmann said she is “amazed” that Mr Woodford is able to start up another company before the FCA investigation has finished. MP Kevin Hollinrake commented: “I do think there's a good case for not being able to work in fund management while you're being investigated, but that provision doesn't currently seem to exist in the FCA rule book.”

European-focused SPAC launches

French investment firm Tikehau Capital is sponsoring a Special Purpose Acquisition Company (SPAC) to focus on the European financial services sector. Tikehau Capital is joined by former UniCredit chief Jean Pierre Mustier and former BoA Merrill Lynch and UniCredit banker Diego De Giorgi. The SPAC plans to focus on traditional and alternative asset management platforms, innovative financial technology firms, insurance and insurance related services and other diversified financial services firms.

Energy Minister announces green research hub

Energy Minister Anne-Marie Trevelyan has announced the launch of the UK Centre for Greening Finance and Investment in April, a project which aims to provide financial institutions and services with world-class data and analytics. Trevelyan stated: “The City of London has long been an international top spot for financial and professional services and with its competitive strengths, the UK’s capital has the potential to make serious waves around the world – including tackling climate change.”


AstraZeneca boss’ bonus hits £13m

AstraZeneca boss Pascal Soriot’s pay packet totalled £15.4m last year, with more than £13m of this in bonuses. The chief executive’s base salary was unchanged at £1.29m in 2020, while his annual bonus increased by a fifth to £2.32m. The pharmaceutical firm has announced plans to change its remuneration policy, saying executive directors will see their pension contributions fall in line with the wider workforce of 11% of base salary, while base pay for the CEO will increase by 3% this year, in line with the rest of the firm’s workers.


Pub chain’s investors tapped for £350m

Pub chain Mitchells & Butlers is to tap shareholders for £350m, having also secured a new £150m credit facility from lenders. The move will give its three largest shareholders, who together control 55% of its shares, effective control of the business. Peel Hunt analyst Douglas Jack suggested this “may trigger corporate governance red flags for other shareholders”.

Martin calls for reopening of pub industry

Tim Martin, Chairman of JD Wetherspoon, has urged the Government to allow pubs to reopen at the same time as non-essential retailers, suggesting the rollout of the coronavirus vaccine should make it possible for the hospitality industry to reopen. He cautioned that if the industry remains closed, “economic mayhem will inevitably follow.”


Rolls-Royce names new finance chief

Panos Kakoullis has been named as the new chief financial officer at Rolls-Royce. CEO Warren East said the engineering firm looks forward to benefitting from his expertise and experience as it delivers a fundamental reorganisation.


Vivendi to spin out Universal Music Group

Universal Music Group is to be spun out by French media group Vivendi, with shares in the parent firm up as much as 20% to €31.50 on the news.


100k buyers could miss out on stamp duty deadline

One in five home buyers who agreed a deal last July when a stamp duty holiday was announced have not completed their purchase yet – and Rightmove has estimated that around 100,000 buyers will fail to complete by March 31 cut-off for the relief. The analysis suggests that of those buyers who agreed a purchase last July, one in five remain stuck in the "logjam" more than six months later. Meanwhile, Rightmove says the average asking price has increased by 0.5%, or £1,522, this month. Property inquiries in the first week of February were up 18% on the same period last year, and agreed sales were up 7%. This marks a decline on a post lockdown peak seen last year, where agreed sales jumped 60% year-on-year in August.

London developer announces new £500m build-to-rent fund

A £500m fund to build new rental homes in London has been launched by developer Avanton. The firm plans to use the fund to buy land in areas including Islington, Southwark, Wandsworth, Wimbledon, Hammersmith, Lambeth, Camden and Brent, announcing that “despite the obvious challenges the property market has been extremely resilient and recovered rapidly last year after the lockdown.”


Vaccine optimism pushes up the pound

The pound has hit its highest level in almost three years amid increasing optimism about the UK’s coronavirus vaccine rollout. Sterling rose above $1.39 for the first time since April 2018 – reaching a high of $1.3918. Sterling was also up against the euro, reaching €1.1463 – a level not seen since April 2020. With the pound boosted by optimism that the UK economy could be one of the fastest to recover from the coronavirus pandemic, some forecasters say it could hit $1.45 this year. This would mark the highest point since before 2016’s Brexit vote. Despite the gains and optimism, Societe Generale strategist Kit Juckes warned that as the UK’s economy is global, it will only see a full economic recovery once the rest of the world is vaccinated.

Tech investment could boost the economy by £232bn

Analysis from Virgin Media Business and the Centre for Economics and Business Research (CEBR) think-tank suggests investment in digital technology could boost the economy by £232bn by 2040. The report sets out three factors that would be needed to deliver the biggest economic growth: a prolonged investment in connectivity; higher spending on collaboration technologies; and better enterprise resource planning systems. These, it says, will enhance productivity and output across the private and public sectors. It adds that in the medium term, making the sufficient investments could add £74bn to the economy by the middle of the decade.

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