New boss for NatWest
Royal Bank of Scotland, which is soon to be renamed NatWest Group, has confirmed its retail banking boss is stepping down. Les Matheson, who had held the role of chief executive for personal banking since 2014, is to be replaced by David Lindberg, the chief executive of the consumer division at Australian bank Westpac. Mr Lindberg will report directly to CEO Alison Rose, and will be a member of the executive committee of NatWest Holdings. Ms Rose said: "David's insight and expertise will be invaluable in helping us to bring our new purpose to life for our retail customers and help them to thrive."
Banks probe sales push linked to corporate loans
Banks including Barclays, Deutsche Bank, HSBC and Santander are investigating whether investment bankers pressured clients into giving them extra business in return for loans, with the FCA warning against the practice.
Lloyds minority expected to revolt
Lloyds Banking Group is braced for an investor revolt over pay, with Sky News reporting that a "substantial minority" of institutional shareholders could vote against its new three-year pay proposals. The policy, which is expected to be voted through despite the revolt, will see the maximum annual pay package of CEO António Horta-Osório reduced from £8.3m to nearly £6.3m.
TSB restarts valuations
TSB has restarted physical valuations of properties, saying it will work through valuations that have been paused over the next few weeks. It noted that surveyors will have protective equipment.
Start-up support on the way
The Treasury has released further details of the £500m Future Fund, a bailout package for fast-growing start-ups. As of Wednesday, start-ups which have previously received £250,000 in equity from third-party investors will be able to access convertible loans of up to £5m from the Government. Most of the loans will convert into equity on a company's next funding round. Applicants must be able to match the Government funding with outside investment. The package will allow Enterprise Capital Funds - partnerships between the British Business Bank and private venture capitalists - to be involved in the scheme, although backers that use the Enterprise Investment Scheme tax relief will not be eligible due to state aid restrictions in Europe.
NIBC to pay dividend to Blackstone
NIBC has agreed to pay its 2019 dividend to its proposed buyer, Blackstone, before the deal settles, in order to remove one hurdle to the proposed €1.36bn takeover. NIBC said in April it would delay payment of its 2019 final dividend amid the coronavirus outbreak, following guidance from the Dutch Central Bank, prompting Blackstone to warn that the special purpose company it had set up for the intended offer might not have sufficient funding to complete the acquisition. JC Flowers, which holds 60.6% of NIBC's stock, and Dutch investment firm Reggeborgh, which owns 14.6%, have agreed to Blackstone's proposed offer.
Citigroup hires Credit Suisse banker
Citigroup has hired Jawad Haider to lead its North America Insurance team within its financial institutions investment banking group. He joins from Credit Suisse and previously worked on insurance client coverage at Barclays and Lehman Brothers.
Carmakers open factories after coronavirus shutdown
Ford has restarted production in the UK after being mothballed during the coronavirus outbreak. Work resumed at the company’s engine plants in Dagenham, Essex and Bridgend in South Wales. Fellow car makers Jaguar Land Rover and Aston Martin are also kick-starting production in the UK, while Vauxhall has reopened production at its Luton plant, with the firm saying 800 out of 1,600 staff returned to the factory, which produces vans, on Monday.
Ryanair traffic target reduced as expected profit rises
Ryanair’s passenger traffic target has been reduced by a further 20% for 2021 even as the airline reported a 13% increase in profit after tax for its latest full-year. The firm’s Michael O’Leary remarked: “For the next 12 months it’s obviously impossible for us to today give you any guidance on either traffic numbers or on profits. We have no idea because it is entirely subject to passenger numbers, yields and the lifting of government restrictions.”
Pension savers unable to move their cash
The Telegraph reports that savers looking to transfer out of defined benefit (DB) pensions into riskier but more flexible defined contribution funds may find themselves trapped by trustees using emergency powers to halt transfers. The Pensions Regulator (TPR), voicing concern that transfer values may be inaccurate during the coronavirus-driven market turmoil, has adapted the rules to allow trustees to suspend transfers for up to three months to the end of June if it is in the "best interests" of their members. A TPR spokesperson said: “This isn’t a blanket pause and where trustees are able they should continue to provide transfer quotations as normal.”
City workers expect WFH increase
A Deutsche Bank poll suggests almost two thirds of fund managers and traders expect to work from home for at least one day a week after the COVID-19 pandemic. Its monthly survey of about 450 financial market professionals found that 57% thought they would work from home between one and three days a week once the crisis had receded, up from 39% in April. Where previously 47% had said they would work from home only when they needed to, the latest poll sees this drop to 31%.
Increase in profit warnings at financial services firms
Analysis reveals that more profit warnings have been issued this year by UK listed financial services firms than in all of 2019. UK-listed financial services firms have issued 31 COVID-19 related profit warnings so far this year, representing 17% of the FTSE financial services sector.
Auto enrolment ‘too successful’
The Institute for Fiscal Studies has said government reforms that pushed workers into saving for their retirement may have been “too successful”. The think tank said that pensions auto-enrolment had been so effective that even those who could not afford basic necessities were sacrificing gross earnings to save towards retirement.
GSK announces success of HIV treatment
GSK has announced a breakthrough with its Cabotegravir HIV treatment, which has been found to be 69% more effective than the daily pill, Truvada, currently available from US rival Gilead. Dr Kim Smith of GSK's ViiV Healthcare HIV division commented: “We had great hopes this could be very effective and this has delivered that in ways we'd barely dared expect." With the medicine now going to the US Food and Drug Administration for final approval.
LEISURE AND HOSPITALITY
Accor announces funding as revenues per available room increase
Hotel firm Accor has secured a new €560m banking credit facility underwritten by BNP Paribas, Crédit Agricole, Crédit Industriel et Commercial, Natixis and Societe Generale. The Ibis operator said it was seeing some “initial signs of business improvement”, with revenues per available room (RevPAR) up in China as more and more hotels re-open.
Casual Dining Group set to bring in administrators
The Casual Dining Group, owner of Bella Italia, Café Rouge and Las Iguanas, has filed a notice of intention to appoint administrators, giving it protection from creditors for 10 working days.
Giraffe owner eyes Carluccio’s
Boparan Restaurants, which owns the Giraffe, Fishworks and Ed’s Easy Diner chains, is set to confirm a deal to buy Carluccio's and take on about 30 of its outlets. About 43 further outlets will reportedly be shut permanently.
Intu seeks standstill with lenders until December 2021
Shopping mall operator Intu Properties warns it will likely breach its debt commitments at the end of June due to falling rental payments, and will seek standstill agreements with creditors to ride out the coronavirus crisis. Having disposed of some properties in Britain and Spain over the past year to prop up finances that were already under pressure, Intu said that given the current investment climate, it remains uncertain that it would be able to secure new funding or sell more properties to address its covenant issues.
Lockdown damages footfall figures at retail destinations
Analysis by the British Retail Consortium and retail data firm ShopperTrak shows footfall to stores in Britain fell by a record 84.7% in April, compared to the same month in 2019, as only essential retailers were allowed to remain open during lockdown measures. Visits to high street stores fell by 81.8%, while visits to shopping centres fell by 87.8%. Separate research by analysts Springboard found that footfall at the UK’s retail destinations was down 3.3% in the first week after lockdown restrictions were loosened.
Aldi teams up with Deliveroo
Aldi has announced a partnership with Deliveroo that will see it trial home delivery of groceries for the first time. The supermarket will offer a rapid delivery service from a store in Nottingham before extending the trial to a further seven stores across the East Midlands in June. If successful, the service could roll out to further Aldi stores by the end of 2020.
FTSE 100 surges
The FTSE 100 surged yesterday on the back of hopes that a coronavirus vaccine and more stimulus measures could be set to drive an economic recovery. The index rose 4.3% to hit the highest close this month, with the increase the biggest one-day percentage jump since late March. A report from US biotech company Moderna boosted trade, with the firm saying it has seen positive results from the first human trial of its potential COVID-19 vaccine. Markets were also buoyed by further easing of lockdowns in various countries. Elsewhere, the Dow Jones rose 3.71% and the Nasdaq added 2.6%, Across Europe, Germany’s DAX rose 5.7% to its highest level in over two weeks, while France's main index rose 5.2%. The pan-European STOXX 600 rose 4.1%, in its biggest one-day percentage gain since March 24. France and Germany jointly proposing a £450bn European Recovery Fund seemingly boosted markets.
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Survey reveals improvement in finance perceptions
IHS Markit’s UK household finance index has shown that overall perceptions of financial wellbeing in UK households recorded a score of 37.8 in May, representing a slight increase from the previous month’s eight-and-a-half year low of 34.9.