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Daily News Roundup: Tuesday, 20th August 2019

Posted: 20th August 2019


ECB: Tech race puts banks at cyber-attack risk

Korbinian Ibel, director general at the European Central Bank’s supervisory arm, has warned that large banks could be at risk of cyber-attacks as they look to offer services similar to those offered by digital challengers such Monzo and Revolut. Pointing to the possibility that expanding digital services could leave banks more prone to hacks, he commented: “There will be accidents, especially in the cloud,” adding: "It’s not that clouds are more vulnerable, they’re actually often better protected than in-house systems, but they’re seen as juicy targets.” Mr Ibel stressed the importance of identifying the responsibilities that enhanced digital offerings bring, saying: “The rule is that the banker is always responsible for their data and services. You need a common understanding at board level of the needs and risks of IT.”

Hampden & Co sees strong H1

Hampden & Co has announced its first-half results, with deposits up by £95m, marking a 39% year-on-year increase. Lending climbed by £47m, a rise of 44%. The figures show income growth of 48% compared to the first half of last year. Chief executive Graeme Hartop, said: "Despite the industry wide move towards automation and anonymity, the ongoing growth demonstrated in these figures shows a pent-up demand for our personalised private banking service.”

Founder’s wife buys £275k Metro shares

Shirley Hill, wife of Metro Bank founder Vernon Hill, has bought 100,000 shares in the bank, spending £275,206. The investment will be seen as a vote of confidence in Metro, which has seen its value dip 84% on the back of an accounting scandal

SBS appoints Hastings

The Scottish Building Society has appointed Andrew Hastings, who has previously held roles at Royal Bank of Scotland and BNP Paribas Ireland and served as CEO at Barclays Bank Ireland, as a non-executive director.

Alison Rose profiled

A career profile of Alison Rose, who is about to become Royal Bank of Scotland's first ever female chief executive and the first woman to run any of the big high street banks. Jayne-Anne Gadhia, the former boss of Virgin Money, who worked at RBS, asserts that this is an "important moment" for a bank which has previously faced criticism over its alleged "alpha-male" culture.

Children’s Bonds sit unclaimed in low-interest NS&I account

Around a third of National Savings & Investments Children’s Bonds remain unclaimed and earn almost no interest. When NS&I stopped selling the bonds in September 2017 it had £500m active, though now £150m worth sits in its low-interest account.


Woodford enjoys Ultrahaptics stake sale

Fund manager Neil Woodford has sold his 20% stake in Bristol-based hardware firm Ultrahaptics to private equity firm Mayfair Equity Partners. The company produces ultrasound-sensitive panels used in the automotive, advertising and gaming industries.


Germany likely to head into recession

Germany’s economy is heading into recession, the country’s central bank has warned. The Bundesbank said a downturn in exports in the second quarter of the year was likely to continue in the third quarter. It said a 0.1% drop in GDP in the three months to June that it attributed to Brexit and the trade war between the US and China was likely to be repeated in the three months to September. While the Bundesbank and the European commission are likely to downgrade annual growth forecasts from 0.5% to nearer 0.2% or 0.3%, analysts at Deutsche Bank suggest these figures are vulnerable to further downward revisions.

Saxo chief expects more fintech takeovers

Kim Fournais, Saxo Bank's chief executive, expects more fintech acquisitions as banks come under pressure from challengers. Saxo recently acquired Dutch online business BinckBank in a €424m takeover.

European funds steadying

Mutual funds in Europe saw estimated net inflows of €41.3bn (£38.1bn) for the first half of the year, according to Refinitiv, while total assets under management increased from €9.9tn to €11.4tn. Outflows of €41.3bn were recorded however. Exchange traded funds saw net sales of €36.1bn during the period.

CMA assesses deal

The Competition and Markets Authority is assessing if the planned acquisition of the aviation financing arm of Germany's DZ Bank by Japan's MUFG Bank would have a substantial impact on competition.


Norwegian Air sells stake in former bank subsidiary

Norwegian Air, which faces an imminent bumper bond repayment, has been pushed to sell its 17.5% stake in Norwegian Finans Holding, which owns Bank Norwegian, to Nordic Capital and Insurer Sampo for $245m.


Lobby groups propose cut to stock market trading hours

Lobby groups have suggested that stock market trading hours should be reduced in an effort to help make the investment management sector more accessible to women and working parents, with it suggested that greater flexibility will also help address concerns over mental health. The Investment Association (IA) and the Association for Financial Markets in Europe plan to consult members on options that include reducing trading hours from 8.5 to 6.5 hours. The London Stock Exchange operates from 8am until 4:30pm, with traders tending to start earlier and often staying later, while equities markets across Europe follow the same hours. The proposals being put forward could suggest a 9am start and 3:30pm close for stock markets. It is suggested that such a shift would make it easier for working parents to secure childcare. Recent analysis by the Financial Conduct Authority shows that just 13% of staff approved to take part in regulated activities at trading firms were women, with the percentage slightly higher at investment management firms, where it stood at 16%. The IA earlier this year named 94 companies which failed to increase the proportion of women on their boards to at least 25%.

Wealth managers confirm merger talks

Wealth management group Tilney has confirmed it is in talks with fund firm Smith & Williamson in a move that would result in a firm with a combined £45bn in assets under management. Tilney said the discussions are exclusive and ongoing, and there can be no certainty a deal will go ahead. The fund supermarket said a further announcement would be made “as and when appropriate”. Smith & Williamson said: "A merger has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm.”

Pictet overhauls Asia leadership in expansion push

While downplaying its previously acknowledged ambitions to challenge Julius Baer in Asia, wealth manager Pictet is revising its leadership in the region in a bid to improve performance.


Convatec names new chair

John McAdam, the former boss of British chemicals firm ICI, has been appointed new chairman at NHS supplier Convatec. The firm was pushed to assert a $150m (£124m) turnaround plan earlier this year.


Mitie to offload catering unit

Outsourcer Mitie is selling its catering and hospitality arm to the Queen’s caterers, CH&CO, for up to £85m. Chief executive Phil Bentley said the company is investing in areas such as security, clearing and engineering services where it believes its strengths are.


Lender approval needed for TSP sale

TSP Projects, the engineering arm of British Steel, is awaiting approval from a key lender – thought to be Citibank - to secure its sale to French rail firm Systra. The Official Receiver cannot sanction the sale to Systra without the release of a floating charge over the unit’s assets. Meanwhile, Business Secretary Andrea Leadsom has said that Turkish Oyak military pension fund Oyak, which has been lined up to buy British Steel, is not a short-term speculator and, unlike the manufacturer’s previous owner, Greybull Capital, has a long-term plan for the business.


Protests hitting UK recruiters in Hong Kong

Anti-China protests in Hong Kong have forced UK recruiters with offices in the city to let hundreds of staff work from home. Robert Walters Hong Kong managing director Ricky Mui said the unrest had caused a slowdown in hiring and hurt business confidence, while PageGroup has cancelled air travel for staff and temporarily shut offices on protest days.


Safestore goes Dutch

Self-storage outfit Safestore is investing €5m (£4.6m) into a partnership with European real estate fund Carlyle to expand into the Netherlands. Safestore, the largest self-storage group in the UK, with 119 sites, and a further 27 around Paris, is pursuing a "multi-country" expansion strategy.


‘Lazy’ shoppers skipping Click & Collect

A new report from Barclaycard has found that UK shoppers are leaving £228m worth of items uncollected each year from Click & Collect points, with many just too lazy to collect them. Some 71% of shoppers now use Click & Collect - selecting the option twice a month on average - yet 15% of shoppers admit to not collecting their purchases in-store. Barclaycard found that one in three of those who failed to pick up an item did so because the process was 'hassle'.


Financial optimism index points to fragility

IHS Markit’s monthly household finance index has dipped to a three-month low, falling from 44.3 in July to 43.7 in August, the second-sharpest drop in demand for major purchases since September 2017. The survey found that pessimism over job security increased to the highest level since March and also shows that almost a quarter of households expect interest rates to rise, the highest since October 2016. “Latest survey data continued to highlight a fragile state among UK households towards their financial wellbeing,” said IHS Markit economist Joe Hayes. “The Brexit haze, uncertainty over the political environment and the increased possibility of the UK entering recession appear to have dented expectations,” he added.

Eurozone inflation falls short of ECB target

Figures show that prices in the eurozone were up 1% in July, down from 1.3% in June. The rate fell short of an estimate of 1.1% growth and also came in under the European Central Bank’s (ECB) inflation target of around 2%, despite record-low interest rates. The data shows inflation of 0.3% in Italy and a decline of 0.7% in Portugal, while Germany saw inflation fall to 1.1% in July from 1.5% in June.


Carney: Negative rate a no-go for BoE

Bank of England (BoE) governor Mark Carney has said his institution will not pursue negative interest rates, opting against a measure being utilised by the European Central Bank and Bank of Japan. He said: “At this stage, we do not see negative rates as an option here. I am not criticising others that have used them, but we don't see it as an option,” telling Central Banking magazine that negative interest rates can be "counter-productive". The BoE’s view, Mr Carney added, "is that the effective lower bound is close to zero, but positive - just above zero."

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