Small businesses look to specialist lenders for loans
Keith Morgan, chief executive of the British Business Bank, has said SMEs are diversifying their sources of funding away from big banks, choosing instead to shop around for specialist lenders. There was a 79% leap in equity investment to £4.5bn, a 12% jump in asset finance to £18.6bn and a 51% rise in peer-to-peer lending to £1.8bn. The BBB’s latest annual report into the small business finance market revealed that seven out of 10 small companies would choose not to borrow from a bank, even if that meant they did not expand, with small firms' reluctance to borrow becoming “entrenched" over 2017.
Carney: We can’t stop future crashes
Mark Carney has admitted that the Bank of England is powerless to stop the next financial crisis. The BoE governor said something was bound to go wrong in future, and it was impossible to know exactly what. But he added that the UK banking system was strong enough to withstand the next shock - even what he called a “cliff-edge Brexit”. “We must remember that, although we can make financial crises less likely to happen and less severe when they do occur, we cannot abolish them,” Mr Carney said.
UK to move beyond peak cash
Data from UK Finance shows that debit cards will become the most popular way to pay this year. In 2006, 62% of all payments were made using cash; in 2016 that figure had fallen to 40%. By 2026, it is predicted cash will be used for just 21% of payments. ATM data shows that in 2016 there were 2.7bn withdrawals from the country's 70,000 cash machines - the lowest number of transactions since 2010.
Cash ISA rates on the increase
Interest rates on ISA accounts are beginning to tick up, according to Moneyfacts. Figures show that returns on average ISAs increased from 0.68% in December, to 0.78% in February. "The Isa market may have reached a turning point, with all average Isa rates increasing for a second month in a row," said Charlotte Nelson, finance expert at Moneyfacts.
Former First Direct boss joins Barclays
Barclays has appointed the former CEO of Yorkshire Building Society and First Direct to the board of its UK bank, as it adds retail experience to its new ringfenced arms. Chris Pilling has started as a nonexecutive director for Barclays Bank UK, ahead of the transfer of the British business in April.
Private equity chiefs face partnership dilemma
The FT looks at how private equity groups are deliberating over whether to become corporations or stay as partnerships in the wake of US tax reforms.
Deutsche Bank to cut 500 jobs
Deutsche Bank is looking to cut up to 500 jobs from its investment bank as it strives to keep on track with cost-cutting plans. Recently, the bank has axed some senior and mid-level investment positions, and more are set to follow. Deutsche Bank reported its third annual loss in a row, with a net loss of €500m in 2017, caused largely by US tax reforms. The bank declined to comment on the job cuts.
Ireland withdraws ECB candidate
Ireland is withdrawing its candidate for ECB vice president, making it almost certain that Spain's finance minister will get the job. Irish finance minister Paschal Donohoe said finance ministers from the eurozone should decide.
ECB blocks payments from Latvian bank
The ECB has stopped payments by Latvia's third biggest bank after ABLV was accused by the US authorities of breaching sanctions against North Korea, leading to a drying-up of liquidity.
Saga appoints ex-Goldman man to revive fortunes
Saga has appointed former Goldman Sachs man, Patrick O’Sullivan, in a bid to stem its financial woes. Mr O’Sullivan will start on a salary of £325,000 – compared to the £280,500 of his predecessor, Andrew Goodsell, who is retiring from the firm. “Saga is a household name and a brand that I admire. I am very pleased to be joining at a pivotal moment,” said Mr Sullivan.
Fidessa raises dividend
Fidessa, which makes software that allows financial institutions to deal in equities and other financial instruments, has raised its dividend by 5% to 29.7p and confirmed it would be paying its usual additional special dividend, this year of 50p per share, as it reported better-than-expected results.
Bitcoin heads up
Bitcoin rose above $11,000 yesterday after breaking through the price mark for the first time since January over the weekend. The virtual currency reached $11,101 against the US dollar on Saturday, according to Thomson Reuters data.
LSE to launch new Libor
The LSE is set to launch a contract to compete directly with rival InterContinental Exchange to wean markets off Libor by 2021. LSE's CurveGlobal derivatives arm is set to launch its three-month Sonia futures contract in the second quarter.
Ireland steps up plans to avoid market disruption from Brexit
Euroclear has announced that by next March it will create a securities depository for Irish equities that would ensure trades could still be settled after the UK left the EU.
Spectris to focus on services
Precision instrument manufacturer Spectris is to shift focus from supplying products for customers, to a model based more around providing testing services. The decision was made amidst a rise in demand for outsourced testing, as companies see in-house expertise drop. Spectris has made several acquisitions recently, and chief executive John O’Higgins has indicated there could be more soon.
LEISURE AND HOSPITALITY
Shares in Merlin Entertainment rise
Shares in Merlin Entertainments have risen more than 4% following news that activist hedge fund ValueAct has acquired a 5.4% stake in the company. “We maintain strong relationships with all of our major shareholders. As a matter of course, we do not comment on specific investor dialogue,” said a spokesperson for Merlin.
Palmer and Harvey insolvency hits McColl’s
McColl’s shares plunged yesterday after the company revealed that Palmer and Harvey going into administration had impacted upon its supply chain. The convenience retailer said it had suffered a 2.2% drop in like-for-like sales in the 11 weeks to 11 February, despite putting contingency plans in place.
Arsenal announce £200m sponsorship
Arsenal have announced a five-year extension to its shirt sponsorship agreement with Emirates, in a deal understood to be worth over £200m – the largest such deal ever signed by the club. Emirates have sponsored the club’s stadium since it opened in 2006.
Corbyn: Finance will be servant not master under Labour
Jeremy Corbyn will vow to tackle the “out of control financial wizardry and gambling” he claims is at the centre of the City of London. In a speech today at the annual conference of the EEF manufacturing lobby group, Mr Corbyn will say the next Labour government “will be the first in 40 years to stand up for the real economy”, taking “decisive action to make finance the servant of industry not the masters of us all”. The Labour leader will also promise that a future Labour government would "intervene to prevent hostile takeovers" such as the investment firm Melrose's £7.4bn bid for the British manufacturing company GKN. According to the City of London Corporation, financial services firms paid £72.1bn in taxes last year. Miles Celic, CEO of TheCityUK commented: “What too many politicians fail to grasp is that the industry is a national asset.”