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Daily News Roundup: Tuesday 1st May 2018

Posted: 1st May 2018


TSB IT woes drag into second week

TSB’s IT meltdown has entered its second week, with some customers still unable to access their accounts or make payments. The situation also led to TSB warning its customers to watch out for scams, as fraudsters have taken advantage of the system failure by sending messages urging customers to click on a link to access their accounts, which instead leads to the downloading of rogue software. Meanwhile, the Treasury Committee will quiz chief executive Paul Pester, chairman Richard Meddings and an as-yet un-named representative from TSB's Spanish owner Sabadell. “We will take evidence from TSB and Sabadell representatives to find out how they got into this mess, who is responsible, and how they are putting it right,” said committee chair Nicky Morgan. Separately, Lloyds Banking Group has noted intermittent online banking issues for some customers, and stated that it is looking to sort the trouble as soon as possible.

UK challenger banks braced for fresh wave of consolidation

Following the Aldermore and Shawbrook takeovers, Nicholas Megaw explores expectations of a pick-up in M&A activity among challenger banks facing "rising costs, competition and a sluggish economy". Meanwhile, the owner of Clydesdale and Yorkshire banks is looking to buy-out rivals at reduced rates, as lenders brace for a wave of dealmaking. CYBG hopes to expand through the acquisition of smaller competitors struggling to cope with slower growth. Sources said the lender has been seeking opportunities for some time, but valuations were too high.

Investors bet against Metro Bank on cash-call concerns

Investors have been betting against Metro Bank since the start of the year, amid rising expectations that the challenger bank may need another cash call within months. Billionaire hedge fund manager Crispin Odey and JP Morgan both took short positions in the lender, helping to push the firm's stock down 7.3% on gloomy first quarter results.

Banks face potential of more PPI payouts than expected

A further 10m customers could make PPI claims under the "Plevin rules", according to warnings from St John’s Buildings, a barristers’ chambers in Chester, at an estimated cost of £18bn.

Financial regulators turn their sights on banks’ use of cloud

Financial regulators are turning their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks.

Bank’s boost for first-timers

Halifax is offering first-time buyers and home movers £1,000 cashback for completions by June 24 - and £250 cashback for borrowers who move their mortgage to the bank.


Record dollar-based debts risk financial crunch

The potential for a global financial crunch is increasing as borrowing in dollars soars in the face of pending US interest rate rises. Emerging market economies increased borrowing in dollar-denominated bonds at the fastest rate on record last year, according to the Bank for International Settlements (BIS). "With more than $900bn of emerging market bonds due through end-2018, countries with high external financing needs such as Turkey, Poland, and Argentina remain particularly exposed to sudden shifts in global risk sentiment," the Institute for International Finance warned. Meanwhile, the US Federal Reserve has come under pressure to raise interest rates more aggressively this year after inflation edged closer towards its target rate of 2%.

Deutsche Bank investors urged to line up next chairman

A shareholder advisory group has put pressure on Paul Achleitner, the supervisory board chairman at Deutsche Bank, saying shareholders should “carefully consider” a proposal to remove him from his post. Glass Lewis's German subsidiary said Mr Achleitner may not have acted in its shareholders' best interests when John Cryan was ousted as the bank's chief executive.


Court of Appeal to hear BA pension case

A dispute between British Airways and its pension trustees is heading to the Court of Appeal. The case centres on the switch of public sector pension increases from the retail price index (RPI) to the consumer price index (CPI), which caused a wave of protest among staff. BA issued legal action against the trustees in 2013 after they voted to grant a discretionary increase of 0.2%, costing BA £12m.


Avant building towards £1bn turnover

With an average selling price for its homes currently at £257,000, Northern housebuilder Avant Homes expects to meet its target of reaching £500m turnover and building 2,000 homes this year, and hopes to hit £1bn of turnover by 2023. In the year to April 27, Avant increased its revenues by 21% to £447m, building 1,903 homes, while its pipeline of land currently stands at 7,492 plots. Chief executive Colin Lewis plans to meet the targets by expanding into new areas and focusing on low-cost homes, where demand is strongest.


CMC Markets launches pro platform

CMC Markets has launched a new account which it hopes will allow many of its customers to sidestep a clampdown by European regulators. The European Securities and Markets Authority (ESMA) is expected to implement restrictions in the coming days, including plans to cap leverage limits for retail clients. CMC Pro is a platform designed for professional clients to continue using their current leverage rates, but they must fulfil three key criteria: a portfolio of at least €500,000; at least 10 trades a quarter over the last 12 months; and, have worked in the financial sector for at least one year.

Aviva offers ‘goodwill payments’ after shareholder outcry

Around 2,000 Aviva investors have up to six months to claim around £14m of goodwill payments after some lost money by selling the firm's then low-priced shares in March.


Rank to focus online with digital guru

Rank Group has appointed online gaming star John O’Reilly as its new chief executive. He previously led Ladbrokes’ digital operations and worked to relaunch the Coral brand online.


WPP operating boss defends sales slip

WPP has announced better-than-expected quarterly results, with net sales down just 0.1%. Joint boss Mark Read, who became joint chief operating officer (COO) in the wake of founder Martin Sorrell's departure, said a full break-up of the group does not make sense and that he would instead be looking at restructuring.


Interserve hit by property consolidation effort

Shares in troubled outsourcer Interserve tanked on Monday after it was revealed that accountants and consultants are to net almost £40m in fees following an aborted property consolidation exercise. Interserve's total bill for professional fees, restructuring costs and write-downs was £158.2m, leaving an annual pre-tax loss of £244.4m. Operating losses increased to £224.8m, while net debt doubled to £502.6m.


Carpetright store closures approved

Carpetright shareholders have voted to approve its CVA, flagging 81 stores for closure, with rent on another 113 set to be cut by up to 50%.


Northern firms most confident over economy

London firms’ confidence in the UK economy fell 10 points during April to 41%, according to data from Lloyds Bank Commercial Banking, which also indicated that their own business prospects weakened to 45%, from 58% in March. While firms in the south west were least confident, with an overall score of 20%, positivity was highest among north west businesses, at 49%.

Real-time mapping of economic activity close, says BoE official

Mapping economic activity in real time, similar to the method for weather or traffic, is "closer than ever to being within our grasp", says Andy Haldane, the BoE's chief economist.

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