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Daily News Roundup: Tuesday, 19th November 2019

Posted: 19th November 2019

BANKING

TSB 'meltdown' blamed on data centre test failures

The long-awaited report into the IT meltdown at TSB will be published today and is expected to outline a raft of failings at the bank - including a critical failure to properly test one of its data centres. The huge meltdown cost chief executive Paul Pester his job and the bank itself around £370m in compensation and expenses. Law firm Slaughter and May’s report will reportedly criticise Carlos Abarca, the bank’s head of IT, who is claimed to have failed to warn board members about “shortcomings” with the testing of the new system. People briefed on the report say it will say the bank’s board of directors failed to show “common sense” ahead of the IT upgrade, with another source saying the report concludes that the decision not to test both data centres was taken by Sabis, the tech division of TSB's Spanish owner Sabadell. The report is set to be followed by a joint investigation by the Financial Conduct Authority and Prudential Regulation Authority.

Bank appoints area director for Scotland

Cambridge & Counties Bank has appointed its first area director for Scotland, with Donna Kerr taking the position. Ms Kerr she would be helping to lead the lender's "expansion charge" in Scotland. Cambridge & Counties specialises in secured lending and deposit products for small and medium-sized businesses.

Bankers in HQ switch

Société Générale has started relocating staff to its new Canary Wharf office as it looks to consolidate its London business. The site will house a divisions including corporate and investment banking, securities services, asset management and back and middle office private banking activities.

PRIVATE EQUITY

Asset manager Russell Investments put up for sale

TA Associates has hired Goldman Sachs to explore a sale of Russell Investments, which has $293bn under management. Russell Investments was valued at $1.15bn when TA Associates acquired it in 2016.

INTERNATIONAL

German bank customers feel pinch as lenders grow less reluctant to impose negative rates

Data from Germany’s central bank shows almost 60% of the country’s banks are charging corporate clients negative interest rates on deposits, with over 20% doing so for retail customers.

Bank faces hit over ‘hawking’ insurance

Commonwealth Bank, Australia's largest bank, will be forced to refund more than A$12m to customers after unfairly selling life insurance over the phone. It has pleaded guilty to 87 criminal charges for 'hawking' life insurance in unsolicited phone calls and has been ordered to reimburse 30,000 people who were targeted by telemarketers between 2010 and 2014. Commonwealth Bank also faces fines of up to A$1.85m following the legal action by the Australian Securities and Investments Commission.

China cuts interest rate for first time in four years

The People's Bank of China has cut its short-term lending rate for the first time in four years, trimming the seven-day reverse repurchase rate from 2.55% to 2.5%.

AVIATION

Airbus announces orders worth more than $30bn

Airbus has announced orders for more than 170 planes in a set of deals valued at more than $30bn at list prices. Air Arabia, a low-cost Emirati carrier, has ordered 120 narrow-body planes including the A320neo and A321 XLR models, while Dubai government airline Emirates placed an order for 50 of the bigger A350 planes.

FINANCIAL SERVICES

Lloyd’s of London encourages workers to voice concerns over harassment

Lloyd’s of London has launched a new campaign to encourage employees to speak up about harassment after a report revealed that more than half said they would keep quiet. A survey by the insurance market found that 38% of workers were unsure how to raise a concern and 45% felt uncomfortable doing so. It has now responded by introducing an advice line. Employees are urged to use this if they are victims of or witness bullying or harassment. Lloyd’s will then provide trained counsellors to speak to the individuals and to help them with any further actions.

FCA probes pawnbroker’s lending practices

Lending practices at H&T, the largest pawnbroker in Britain, are being investigated by the Financial Conduct Authority. The watchdog is looking into how the firm judges whether customers who take out an unsecured loan can afford to pay the money back. The probe is focused on lending over the last six years, a period in which customers have paid £24m of interest.

Aviva opts to retain Asian businesses

Aviva has revealed that it plans to retain its arms in Singapore and China following media speculation over the future of its businesses in Asia. In a statement, the insurer said: “Aviva’s Singapore and China business units delivered double digit operating profit growth in 2018 and are earning attractive returns. Both countries are expected to pay dividends to group centre in 2019.” However, the company confirmed that it is continuing with a strategic review of its operations in Hong Kong, Vietnam and Indonesia, which could result in a sale.

Sage to offload payments arm

Pending regulatory approval, software firm Sage Group is to sell its payments arm Sage Pay for around £230m to Elavon, a payments firm and unit of US Bancorp. Sage said it expects to report a statutory profit of around £180m after the deal. For the year ended September 2018, Sage had operating profit of £15m and revenue of £41m.

MANUFACTURING

Diploma raises dividend

Diploma, which supplies technical products for the life science industries, is to increase its final dividend by 15% after posting double-digit growth in both earnings and revenue. Profit rose 14% to £97.2m from £84.9m in 2018, while revenue climbed 12% to £544.7m from £485.1m last year. Cash flow was down 7%, however, hitting £56.5m.

MEDIA AND ENTERTAINMENT

SoftBank to form internet giant

Japanese technology conglomerate SoftBank has signed a $30bn deal between Yahoo Japan and Line, a South Korean messaging app. The move, which is set to see a merger completed by October 2020, will see SoftBank take a 50% stake in the venture, while Naver, the majority owner of Line, will take the other half.

REAL ESTATE

Ban no-fault evictions to stem rising tide of homelessness

Campaigners say that homelessness could be cut by more than 10% if tenants were protected from no-fault evictions. Analysis of government data shows that more than 260,000 households faced homelessness over the past year. Of these, 27,450 were evicted from their private rental accommodation because their landlord was selling up or reletting the property. A further 800 households were evicted after complaining to their landlord, letting agent or council.

RETAIL

Retail closures reach nearly 6,000

High street chains have closed almost 6,000 stores so far this year, according to the Centre for Retail Research, which also revealed that retailers with 10 or more stores have already closed 5,834 shops in 2019 - up 77% on the whole of last year. Some 708 shops have been closed by large retailers falling into administration in the year to September 30, while a further 333 shops were closed through CVAs. In the first nine months of 2019, 2,531 more shops were closed by large retailers than the 3,303 closed during the whole of 2018, while a further 4,793 shops have been shuttered by large retailers through “rationalisation” as part of cost-cutting programmes.

SPORT

Man Utd revenue and debt rises

Manchester United has posted ​revenues of £135.4m for the first quarter of 2019/20, a £400,000 increase on the same period for the previous year. Commercial revenue was up 5.9% on a year ago, hitting £80.4m. The club’s net debt has risen by over £100m, with projected revenue for 2020 also dropping. It expects 2020 annual revenue to be between £560-580m - a drop compared to £627.1m for the year ending June 30, 2019.

ECONOMY

Brits are top Xmas spenders

Britons are set to be Europe’s top spenders this Christmas, with a new poll suggesting UK shoppers will spend an average of £567 each this Christmas. This total is 39% higher than the European average of £409 and includes £299 on presents and £143 on food and drink. The average spend is up 1.3% on last year’s figure. The survey found that a third of UK shoppers plan to buy most of their presents in November, while three in five said they preferred to shop for Christmas presents in stores.

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