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Daily News Roundup: Tuesday, 1st December 2020

Posted: 1st December 2020


Lloyds names HSBC’s Nunn CEO

Lloyds Bank has announced that Charlie Nunn, the current head of wealth and personal banking at HSBC, is to replace Antonio Horta-Osorio as chief executive. Mr Nunn will receive a pay packet worth about £5.6m, which is slightly lower than that of Mr Horta-Osorio, who has been chief executive at Lloyds since 2011. Mr Nunn has been selected by Robin Budenberg, Lloyds’ incoming chairman, who takes over from Lord Blackwell in January. It is noted that Mr Nunn is in talks with HSBC’s senior leadership about when he can join Lloyds, with Lloyds’ chief financial officer William Chalmers set to step in temporarily if there is a gap between Mr Horta-Osorio’s departure in June and Mr Nunn’s arrival. Commenting on the appointment, Citigroup analyst Andrew Coombs said it “comes as somewhat of a surprise”, with it having been anticipated that the role would go to someone internally or someone with past experience of working at Lloyds.

Mortgage approvals at highest level in 13 years

With Bank of England figures showing that 97,500 home loans were approved by lenders in October, UK mortgage approvals are now at the highest level since 2007. The Bank said approvals for home loans were more than 5,000 higher than in September and a third higher than in February, the month before the UK entered its initial coronavirus lockdown. October’s total marks a steep increase on the low of 9,400 recorded in May. The figures also show that mortgage borrowing hit £4.3bn last month, pointing to a recovery from the pandemic-driven downturn that saw borrowing slip to £200m in April. Pantheon economist Sam Tombs said the Chancellor’s decision to suspend stamp duty on properties worth up to £500,000 until March had “turbo-charged” the market. He added, however, that the housing market “remains set to weaken sharply” after the stamp duty holiday comes to an end.


Carlyle sells stake in PA Consulting

Carlyle has sold its stake in PA Consulting Group to US consultancy Jacobs Engineering Group in a deal valuing the UK-based advisory firm at £1.8bn.


Commonwealth Bank of Australia faces civil suit over interest

The Australian Securities and Investments Commission has filed a civil lawsuit against Commonwealth Bank of Australia for charging customers an interest rate higher than advised. A systems error saw the bank overcharge interest on business overdraft accounts to a total of more than A$2.9m between 2011 and 2018.

ABN Amro to cut 2,500 jobs as it seeks to ‘future proof’ bank

ABN Amro is to cut more than 2,500 jobs, reducing its headcount by 15%, and abandon its short-term profit target as it looks to cut €700m of costs by 2024.

Bank of America will not finance Arctic drilling

Bank of America says it will not finance oil and gas drilling projects in the Arctic. Goldman Sachs, Morgan Stanley, Chase, Wells Fargo and Citi have all announced similar policies this year.


FCA receives 47 coronavirus complaints in 6 months

The Financial Conduct Authority (FCA) has received 47 whistleblower reports on coronavirus-related conduct at financial services firms in the six months to the end September. This is equivalent to nearly two complaints per week. While most reports were related to a lack of personal protective equipment and non-compliance with government guidance on social distancing, concerns have been raised over miscategorising employees and a lack of business continuity planning.

IHS Markit acquired by S&P Global

IHS Markit is to be acquired by S&P Global for $44bn (£33bn) in an all-stock deal under which Douglas Peterson, S&P's chief executive, will lead the combined group. The deal has been approved by the boards of both companies and is expected to close in the second half of next year. Shareholders of S&P Global will own 67.75% of the new company and IHS Markit shareholders will own 32.25%.

Founders back London start-up

Google’s Eric Schmidt, Ocado’s Tim Steiner and Zalando’s Robert Gentz are among founders and executives at global tech firms that have invested in a fund being launched next year by Firstminute Capital. The fund, which will invest in start-ups in the UK, Europe and the US, has raised $111m in an initial round.


Moderna releases vaccine update

Pharmaceutical firm Moderna has released another tranche of data relating to the effectiveness of its COVID-19 vaccine, with introduction of the jab expected in the UK and US before the end of the year. Final analysis of data from a trial involving 30,000 participants showed the vaccine was more than 94% effective in preventing COVID-19 and 100% effective in preventing severe coronavirus.


BAE Systems agrees supply deal with UK armed forces

The UK’s armed forces are to be supplied with ammunition for the next 15 years under a new contract signed with BAE Systems. BAE chief executive Charles Woodburn commented: “This contract secures the future of a highly technical and critical industry which supports thousands of manufacturing jobs in several areas throughout the UK.”


GardaWorld bid for G4S extended

GardaWorld has extended its offer for G4S for a second time, with investors in the FTSE 250 security company given until December 16 to reconsider the offer, which values the company at £3bn. G4S has dismissed the approach and advised investors to do the same.


Arcadia collapses into administration

Arcadia, the retail group which owns Topshop, Topman, Miss Selfridge, Dorothy Perkins, Evans and Burton, has gone into administration, putting 13,000 jobs at risk. No redundancies were announced as an immediate result of the collapse of Sir Philip Green’s retail empire and Arcadia’s stores and websites will continue to trade for the time being. Arcadia CEO Ian Grabiner, who said the collapse into administration marked an "incredibly sad" day for the group, said that while Arcadia had hoped to “ride out the pandemic and come out fighting on the other side”, trading conditions were the worst the group has ever seen and “the obstacles we encountered were far too severe." Meanwhile, Sir Philip has been urged to protect the pensions of Arcadia's workforce amid reports of an estimated £350m deficit in its pension fund.

Black Friday boosts retail footfall

New figures reveal that Black Friday boosted retail footfall last week, with visitor numbers up 4.8% across all UK retail destinations compared to the previous week. UK high streets and retail parks benefited the most, with footfall up 6.6% and 4.9% respectively. On Black Friday itself, retail footfall across all UK shopping destinations rose 8.7%. However, footfall is down 56.9% compared to last year. Barclaycard Payments said this year’s Black Friday saw a 16.7% decrease in the volume of payments compared to last year. However, the company predicted a Black Wednesday when shops reopen this week.


£600m of debt repaid in October

Bank of England (BoE) data on lending shows that households repaid £600m of debt in October, the same as in September. This means the total repaid since the end of March now stands at £15.6bn. Credit card debt has fallen by 13% over the past year, with consumers having reined in borrowing amid ongoing uncertainty around the impact of COVID-19. The BoE report also reveals that borrowing using credit cards, overdrafts and personal loans fell by 5.6% annually in October. Thomas Pugh, a UK economist at Capital Economics, said that while consumers and businesses were paying back credit, “the good news on vaccines means that businesses and consumers’ purses could be pretty full when regulations are loosened early next year, leading to a sharp rebound in consumption and growth.”

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