New capital rules for banks delayed
New capital rules for banks and investment firms will be implemented at the start of 2022, six months later than originally indicated and six months after the European Union’s June 2021 date for implementing its versions of the rules. A joint statement from the Bank of England, Financial Conduct Authority and the Treasury said changes will come into force on January 1, 2022. Officials said the delay will give the industry more time to prepare, noting feedback which had raised “concerns about the general volume of regulatory reform in 2021.” The rules comprise of the Investment Firms Prudential Regime, which covers capital requirements for investment firms, as well as changes to capital requirements agreed globally by the Basel Committee.
RBS launches 3% savings account
Royal Bank of Scotland has launched a new regular savings account which pays a 3% interest rate. The Digital Regular Saver account is exclusively reserved for RBS's current account customers. The account pays 3% on balances up to £1,000, with any savings above that total seeing a rate of 0.01% gross per annum (variable). No minimum deposit is required to open the account, but customers will need to set up a monthly standing order of between £1 and £50 from their RBS current account.
BBVA eyes Sabadell merger
Spain's BBVA has reportedly hired JP Morgan to advise it on the potential acquisition of Banco Sabadell. This follows reports earlier in the year that said Sabadell had hired Goldman Sachs to explore strategic options. John Cronin, a banks analyst at Goodbody, said that if the deal with BBVA goes ahead, Sabadell could look to sell TSB, which it bought for £1.7bn in 2015, with Mr Cronin saying it is “unlikely to be core to the enlarged group". Meanwhile, BBVA yesterday agreed to sell its US business to PNC Financial Services for $11.6bn.
Santander buys Wirecard’s European business
Banco Santander is snapping up Wirecard’s core business in Europe. The €100m deal will see the Spanish lender acquire several highly specialised technological assets from the merchant payments business of Wirecard in Europe. Banco Santander said the acquisition will accelerate its growth plans in Europe.
Goldman investment arm co-head joins Dell fund
Gregg Lemkau, Goldman Sachs' co-head of investment banking, is leaving the bank to run MSD Partners, an investment firm that manages entrepreneur Michael Dell’s wealth.
EU regulators seek solution to post-Brexit derivatives rule clash
European regulators are working on emergency rules to ensure that London branches of EU banks do not have to route derivatives trades through New York.
Nissan said to be considering Mitsubishi stake sale
Bloomberg has reported that Nissan is considering the sale of all or part of its stake in Mitsubishi, although spokespeople for both firms denied the reports. Nissan executives, meanwhile, are believed to be concerned about the long-term impact of the coronavirus pandemic.
Vaccine news boosts airline shares
With Moderna announcing that its coronavirus vaccine has proved successful in trials, listed airlines have seen share prices rise. British Airways-owner IAG, Tui, easyJet, Wizz Air and Ryanair all saw stock values climb on the news, with the prospect of a vaccine increasing hopes that travel will become less restricted and passenger numbers will climb.
Supreme Court to settle insurance dispute
Insurance companies have told the Supreme Court that a High Court judgment relating to business interruption insurance was based on fundamentally flawed arguments. A group of insurers are challenging the outcome of a test case brought by the Financial Conduct Authority (FCA) which argued the case for policyholders denied payouts linked to coronavirus-related losses, with insurers arguing that policies were not designed to cover a pandemic. Arch, Argenta, MS Amlin, Hiscox, RSA and QBE are contesting the High Court decision which backed policyholders, while Zurich and Ecclesiastical decided not to appeal against the ruling.
Clearing scrutiny urged by regulators
The Financial Stability Board (FSB) has recommended that scrutiny on clearing houses be increased, as banks and investors call for the houses to take on more of the financial burden involved in such regulation. The FSB noted that “the benefits that central clearing brings for global financial stability” had been highlighted by the coronavirus crisis, as it laid out new measures to help regulatory authorities in different countries assess current resources for clearing house resolutions.
Moderna vaccine 94% effective
Moderna has claimed 94.5% efficacy in clinical trials of its COVID-19 vaccine, with chief executive Stéphane Bancel commenting: “This positive interim analysis from our phase-3 study has given us the first clinical validation that our vaccine can prevent COVID-19 disease, including severe disease.”
LEISURE AND HOSPITALITY
Mitchells & Butlers confirms 20 closures
Pub and restaurant chain Mitchells & Butlers has announced that 20 sites it operates are to shut as a result of the coronavirus pandemic. The firm reopened approximately 95% of sites after the first lockdown and remaining sites have been under review on a case-by-case basis. A spokesperson said: “We have taken the difficult decision not to reopen some of these sites and are working with leaseholders on next steps.”
MEDIA AND ENTERTAINMENT
Vodafone posts first-half results
Vodafone has reported group revenue fell by 2.3% to €21.4bn in the first half, with profit of €1.6bn. The company increased its guidance to between €14.4bn and €14.6bn for the next financial year, compared to €14.5bn in the year-earlier period. Chief executive Nick Read said the results “underline increased confidence in our full year outlook”.
Private equity firm snaps up Taylor Swift’s master recordings
Shamrock Capital has reportedly acquired musician Taylor Swift’s back catalogue for more than $300m
G4S steps up defence against hostile takeover bid from rival
Security group G4S has published an online presentation on its “market-leading and extremely valuable” Retail Cash Solutions business as Canadian firm GardaWorld mounts a £3bn hostile takeover bid.
Asking prices down with duty holiday end in sight
Rightmove has revealed that with people looking to get sales in place before the stamp duty holiday comes to an end in March 2021, the average asking price in October was £1,505 less than in September, falling 0.5% to £322,025. Analysis shows that through October, demand and activity was strongest in price bands where buyers will make the biggest savings thanks to the stamp duty holiday, with the number of sales in the £400,000 to £500,000 price band up 106% year-on-year. Meanwhile, the property portal estimates that 650,000 homes in the UK are currently in the process of being sold, a 67% increase on the total recorded a year ago.
Clubs to score escape from winding-up orders
Ministers are set to announce that football clubs struggling due to the impact of the coronavirus outbreak will escape winding up orders during the remainder of the pandemic. Culture Secretary Oliver Dowden is reportedly planning to say HMRC will suspend any potential court action against clubs. Figures released in October showed that EFL clubs owed £77.6m in unpaid taxes excluding VAT, with the total now believed to be around £90m.
ECB: European debt not unsustainable
European Central Bank chief economist Philip Lane insists that although European governments are running up record deficits in a bid to support their economies amid the coronavirus crisis, the surge in public spending will not make debt levels unsustainable. Mr Lane said that while there will be more public debt, “in the context of very low interest rates, in the context of the macroeconomic environment, the assessment should be that this is something that is sustainable”.
Lockdown curbs less costly second time round
Current restrictions are seemingly having a less severe impact on the economy than the UK’s initial coronavirus lockdown, with high-frequency economic indicators largely unchanged since before the latest restrictions were imposed.
Experts call for Bank of England reform
The New Economics Foundation think-tank and campaign group Positive Money have called for urgent reforms of the Bank of England in order to help decarbonise the financial system and increase green investment in the wake of the coronavirus pandemic. In a letter to Chancellor Rishi Sunak, the group states: “The 2008 global financial crisis served as a wake-up call to the reality that financial markets left to their own devices are prone to excessive risk-taking.”