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Daily News Roundup: Tuesday 17th April 2018

Posted: 17th April 2018

BANKING

Barclays unveils new venture capital arm

Barclays has established a new venture capital arm, Barclays UK Ventures, which will be headed by Ben Davey, who will also join Barclays UK's executive committee as part of the move. Ashok Vaswani, chief executive of Barclays UK, said: "We are a growth business and Ben’s appointment will put real weight behind this new unit to provide new lines of revenue growth in addition to the organic growth of our core business.” Separately, HSBC has said it would create a single regional structure for its private bank in Europe, which includes its businesses in the UK, Channel Islands, France, Germany, Switzerland and Luxembourg. The new structure, which will be called HSBC Global Private Banking, EMEA, will be led by Chris Allen, who has been appointed regional head of global private banking. "This will create a regional private banking business that is more integrated, strategically aligned and well positioned to deliver continued growth for HSBC Private Banking," the bank said in a statement.

Moody's warns British banks over blockchain disruption

The UK banking system is among the world's most exposed to disruption from blockchain technologies, according to Moody’s Investors Services, which noted that cross-border claims from banks in the UK to counterparts in others are equivalent to more than 90% of GDP. Colin Ellis, a Moody’s managing director, said: “Tech shocks nearly always involve winners and losers. There is a clear need for banks to be engaged with these technologies and how they’re going to use them,” he added. Meanwhile, IMF head Christine Lagarde, has warned that the blockchain technology threatens to cut a swathe through the financial infrastructure industries. "Self-executing and self-enforcing 'smart contracts' could eliminate the need for some intermediaries," she said. Ms Lagarde added that, despite the "inevitable" accidents waiting to happen, the advance of bitcoin and other digital currencies could make the global financial system safer.

Barclays chief wins shareholder support

Barclays CEO Jes Staley has received the support of an influential shareholder advisory group. Institutional Shareholder Services (ISS) recommended that investors vote in favour of Mr Staley's re-election at the AGM later this month, despite lingering concerns over a misconduct investigation.

PRIVATE EQUITY

Lysts backer Draper Esprit sees value double

Venture capital firm Draper Esprit has announced that the value of its portfolio has soared over the past year, to £244m. The firm put the increase down to £71m of new investments and a £75m boost in the "fair value" of its existing investments.

INTERNATIONAL

Bank of America reports first-quarter profits of $6.9bn

Bank of America’s shareholder return has surpassed a key level for the first time in seven years, beating analyst expectations, with higher interest rates and lower taxes helping to offset a decline in bond trading revenues. Pre-tax income was up 15% year-on-year to $8.4bn, with net income rising 30% to a record $6.9bn, the bank said. Earnings per share rose by 38% to $0.62, above the $0.59 predicted by experts.

Deutsche Bank told by ECB to tally cost of winding down trading assets

Deutsche Bank has been asked by the European Central Bank to calculate the costs of closing down trading assets on the €1.1trn balance sheet of its investment bank, in the first such request by the banking regulator. The news comes after Deutsche Bank signalled a change in direction by naming Christian Sewing, who was previously head of the retail banking division, as the replacement for John Cryan as chief executive.

Bank of England to unveil Africa partnership

The Bank of England is to unveil a new partnership with central banks in Ghana, Sierra Leone and South Africa in order to "share expertise" as part of a host of new efforts to strengthen financial links across the Commonwealth. The UK government will provide £2m for "tailored technical assistance", which will be be provided by BoE staff.

Botín calls for Brussels payments rules fix

Santander’s Ana Botin has called for the EU's flagship payments regulation to be reformed to avoid impeding banks' ability to compete with large technology groups.

Germany faces recession risk

Germany’s economic outlook is deteriorating with alarming speed and any policymaker mistakes may push the county into a full-blown slump, a leading economic institute has warned. "The danger of recession has increased markedly. It is a notably more critical picture than a month ago," said the Macroeconomic Policy Institute (IMK) in Düsseldorf.

Euronext glitch hits EU indices

A technical glitch at the Euronext exchange hit France's CAC 40, the Netherlands' AEX, Belgium's BEL 20 and Portugal's PSI 20 on Monday. Euronext trading in cash and derivatives instruments took place as normal but that the glitch was causing "issues" with calculating price limits for its derivative markets.

AUTOMOTIVE

JLR cuts could hit Lloyds car finance unit

Growth at Lloyds Bank's £14bn motor finance unit could be hit by Jaguar Land Rover's recent announcement of cuts. Loans by Lloyds last year swelled by more than £2bn to £13.7bn, according to the bank’s statements. Almost half of this growth was from a strategic tie-up with JLR to finance customer car sales.

FINANCIAL SERVICES

Sir John Kingman to lead FRC review

Sir John Kingman has been confirmed as the chairman of a new "root and branch" review into the Financial Reporting Council. Greg Clark, the business secretary, said the chairman of Legal & General and former second permanent secretary at the Treasury, will investigate the governance, impact and powers of the FRC.

HEALTHCARE

Servier to take Shire's oncology unit

Ireland-based biotech firm Shire is to sell its oncology business to France's Servier for £1.7bn, in a move which complicates Shire's prospective takeover by Japan's Takeda. Servier group president Olivier Laureau said: "As an essential step in the evolution of the group, this acquisition allows us to establish a direct commercial presence in the United States, the world's leading pharmaceuticals market, and to strengthen our portfolio of marketed products in the territories where Servier is already present".

LEISURE & HOSPITALITY

ETM Group scores millions for expansion

ETM Group is looking at more sites after landing £10m funding from HSBC. Its London operations already include The Botanist in Broadgate, rooftop bar Aviary, and pub and restaurant The Jugged Hare.

MEDIA & ENTERTAINMENT

Sorrell could make millions from WPP shares

Sir Martin Sorrell, who stepped down as chief executive of the world's largest advertising group on Saturday, could make almost £20m from WPP shares over the next five years. Some analysts believe WPP, which comprises about 400 separate businesses, including Ogilvy & Mather, Kantar Group, Hogarth Worldwide and Young & Rubicam, could now be broken up. Sir Martin, who has never signed a non-compete agreement, is also free to begin a new advertising venture. Meanwhile, shares in WPP were one of the biggest fallers on the stock market in the wake of Sir Martin’s resignation.

REAL ESTATE

London lettings soar despite Brexit concerns

Approximately 2.3m square feet of office space was let in London in the first quarter of 2018, as a flurry of big deals put pay to Brexit concerns. Deals included engineering giant WS Atkins taking 65,900 square feet at LandSec's Nova North building in Victoria.

ECONOMY

Services exports up, imports down

UK exports of services overall increased from £39.3bn to £43.2bn between October and December, according to the latest figures from the ONS, which said UK imports of services decreased from £20.3bn to £20bn over the same period. While trade with Ireland and the Netherlands jumped in the fourth quarter of last year, the European Union remained the UK’s largest trading partner for both exports and imports. Baihas Baghdadi, global head of trade and working capital at Barclays, said: “The picture continues to look positive for Britain’s exporters, with international consumers going out of their way to buy British.”

Pound closes at highest level against dollar since Brexit vote

The pound ended a seven-day winning streak by leaping to $1.4328 against the dollar – the highest since the EU referendum vote. The figure comes as traders await crucial UK wage growth figures.

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