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Daily News Roundup: Tuesday 20th March 2018

Posted: 20th March 2018

BANKING

All change at Barclays

While Barclays Bank PLC will continue to own the group’s corporate and investment bank, international private banking and non-UK cards business, and remain the listed parent of the group, the bank is transferring its UK retail and small business operations to a new bank, Barclays Bank UK, as required by the UK’s ringfencing legislation. Sir Ian Cheshire will become chair of Barclays Bank UK, while Ashok Vaswani becomes chief executive. Separately, the Standard's Jim Armitage challenges activist investor Edward Bramson's Sherborne Investors acquiring 5.2% of the voting rights in the bank and suggests that the Bank of England should demand to know what the "notoriously secretive investor" is planning. "Leaving Jes Staley to carry on is the best thing for Barclays," he asserts.

Aldermore boss confident after South African deal

Phillip Monks, chief executive of Aldermore is positive over the “additional firepower” his new South African owners, FirstRand, will give him. Annual profit at Aldermore was up 20% to £160m, while its loan book grew 15% to £8.6bn. Underlying profit before tax increased from £133m to £160m, while, on a statutory basis, pre-tax profit rose 10% to £141m.

RBS to allow vote

Royal Bank of Scotland will allow shareholders to vote on whether to create a new committee focusing on their views at its annual meeting. The bank has agreed to put the proposal to a vote after the shareholder groups ShareSoc and the UK Shareholders' Association had asked for it for two years.

Sheffield Mutual grows assets

Sheffield Mutual Friendly Society saw its total assets increase by 22% last year to £138.4m while premium income increased by 13% to £19.7m. Traditional membership grew by 6% to 11,294 and new policies increased by 4% to 1,996.

Free ATMs an essential part of life for many

A new survey has found that more than three-quarters of people see free-to-use ATMs as an essential part of their life. Some 77% of people say it is either fairly or very essential for them to be able to access a cash machine free of charge, a survey of more than 2,000 people by campaign group Positive Money found.

INTERNATIONAL

Standard Chartered fined in Singapore

The Monetary Authority of Singapore (MAS) has fined Standard Chartered 6.4m Singaporean dollars (£3.5m) for breaking money laundering and terrorism financing rules. The MAS said breaches occurred when accounts were transferred from the bank's Guernsey arm to its Singaporean business in late 2015 and early 2016.

US lending squeeze raises global stress level

The closely watched "Libor-OIS spread" in dollar funding markets has doubled since January to 51.4 basis points, higher than during the Eurozone sovereign debt drama six years ago.

CONSTRUCTION

Housebuilders cut executive bonuses

Taylor Wimpey has cut its directors’ bonuses in response to the recent scandal over punitive leasehold terms. The housebuilder's annual report shows chief executive Pete Redfern received £827,757 through Taylor Wimpey’s executive incentive scheme (EIS), rather than almost £1.08m as originally planned. Ryan Mangold, finance director, and James Jordan, legal director and company secretary, also received a 23% cut in their bonuses for 2017. Separately, following criticism of a £110m payout for its chief executive Jeff Fairburn, several executives at Persimmon are to receive a cut to their bonuses.

Carillion finance directors to be probed

The Financial Reporting Council is to investigate the conduct of two former Carillion finance chiefs, Richard Adam and Zafar Khan, focusing on the firm's financial statements for the years 2014, 2015 and 2016, and the six months to June 2017. Carillion, which employed around 20,000 people in the UK, was the UK's second-largest construction company before collapsing with debts of £1.5bn on 15 January. The Financial Conduct Authority is already looking into the "timeliness and content" of market updates.

FINANCIAL SERVICES

Call for stricter rules on doorstep loans

People who borrow money from doorstep lenders should get the same protection as those with payday loans, according to Citizens Advice, which has said copying the rules that stop payday loans being rolled over time after time would stop others falling into a spiral of debt. As more than 1.6m people use home credit loans in the UK, the Financial Conduct Authority is reviewing the rules about high-cost credit, including the effect of building up these loans.

Insurance proves a honeypot for alternative asset managers

Sujeet Indap says the recent deal between Voya Financial, Apollo Global, and Athene Holding, demonstrates why private equity-rooted asset managers are pinning their futures on insurance.

LEISURE AND HOSPITALITY

Gambling Commission confirms wager curbs

The maximum stake for fixed odds betting terminals (FOBT) should be cut to £30 or less, according to the UK's Gambling Commission, after a consultation on FOBTs for the Department for Digital, Culture, Media and Sport, which has also suggested that the maximum stake on "slots games" should be £2. MPs on the FOBTs All Party Parliamentary Group have previously said, quoting the Centre for Economic and Business Research think tank, that the cost of problem gambling in the UK is £1.5bn a year "when its impact on wider social welfare is taken into account - including areas such as employment, mental health and financial stability".

MANUFACTURING

Melrose pledges to boost GKN pension fund

Melrose has offered to invest £1bn in engineering giant GKN's pension fund as it battles to secure a takeover deal. The offer comes after GKN rejected what Melrose said last week was its final offer of about £8.1bn, and could allay concerns from the pensions watchdog and MPs.

REAL ESTATE

Offices lift UK commercial property figures

Offices in the UK saw strong take-up in 2017, as the total return from commercial real estate in the year was 10.3%. Demand for offices increased by 19% on 2016, driven by the presence of the serviced office sector in London, according to UBS Asset Management's report. Returns for the logistics property sector, which UBS says has a growing role in the increased levels of home delivery, reached 21%. However, the performance of retail property was less positive, and UBS suggested that the spate of company voluntary agreements (CVAs) in recent months could shift the power balance away from property investors in the sector.

RETAIL

Carpetright shares slump on store closure reports

Carpetright shares fell 11% on Monday, following weekend reports it is considering closing stores as part of a turnaround plan. The firm could go down the route of a company voluntary arrangement; a spokesman for the firm said it was exploring “a range of options” to right the business, and a final decision has not been made.

OTHER

Brexit transition deal good for firms, BCC says

The British Chambers of Commerce has championed the newly-agreed 21-month Brexit transition period, stating it will allow British firms to progress with investment and hiring decisions. “While some companies would have liked to see copper-bottomed legal guarantees around the transition, the political agreement reached in Brussels is sufficient for most businesses to plan ahead with a greater degree of confidence,” said Adam Marshall, director general of the BCC. The CBI’s Carolyn Fairbairn described the progress made as a “breakthrough” and a “critical milestone that will provide many hundreds of businesses with the confidence to put their contingency planning on hold and keep investing in the UK.” Policy Chairman of the City of London Corporation, Catherine McGuinness, added that firms were now on “firmer ground” while Miles Celic, chief executive of TheCityUK, said: "Negotiators must seize on this progress and use it to press on towards agreeing an ambitious vision for the future.”

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