BANKING
Banks and ministers on ‘collision course’ over lending gap
The Times’ James Hurley says ministers and the banking industry could be on a “collision course” over plans to level up economic performance after a report identified regional disparities in small business lending. UK Finance figures show that small business loans and overdraft balances from big banks fell by almost 16% in the North West between the end of 2014 and September last year, from £9.8bn to £8.2bn, while loans and overdraft balances in London fell by only 2.3%. Wales saw a 14.2% drop, while Yorkshire and the Humber posted a 10.9% decline. Mike Conroy, director of commercial finance at UK Finance, said some companies may be switching to forms of borrowing not covered by the figures, adding that regional differences were linked to the level of demand and economic activity in a region. However, Federation of Small Businesses chair Mike Cherry said finance was harder to come by outside of London and the South East, while also suggesting the closure of bank branches may have played a role in regional differences.
Lloyds halts small business lawsuit
Lloyds Banking Group has agreed to suspend its pursuit of a former customer through the courts pending the outcome of a complaint to the Business Banking Resolution Service after Andrew Bailey, the outgoing chief executive of the Financial Conduct Authority, and António Horta-Osório, the chief executive of Lloyds, stepped in. Banks have been urged to put legal action against small business owners on hold until the new redress scheme designed to give SMEs that have unresolved complaints against lenders a chance to consider their cases. Nikki Turner, director of small business group SME Alliance, has called on banks to freeze “unnecessary legal action” until the service has had a chance to consider whether cases are eligible for adjudication.
Open Banking starts to transform banking
Imran Gulamhuseinwala, a trustee of the Open Banking Implementation Entity, believes Open Banking has begun to transform the banking world. He says that although customers might not be aware of it, they are using the technology “that exists behind the scenes.” He notes that Open Banking has surpassed 1m customers, with the number of users more than doubling in under six months. Mr Gulamhuseinwala says getting Open Banking off the ground has required “unprecedented collaboration” among mainstream banks, fintech firms, regulators, and consumer representatives. Pointing to the future, he suggests Open Banking could give all customers access to the sort of bespoke financial advice “usually reserved for the very wealthy”.
SNIB must be ethical, say campaigners
Friends of the Earth has said Scotland's new national investment bank must be an "ethical lender", shunning fossil fuel projects. Campaigners insist the Scottish National Investment Bank should be forced to abide by minimum ethical standards by law. Finance Secretary Derek Mackay is set to propose amending new legislation to ensure the bank has "ethical investment standards".
Lloyds vows to halve emissions linked to loans
Lloyds Banking Group says the next decade will see it more than halve the carbon emissions linked to its loan book.
TSB increases face-to-face managers
TSB has more than doubled the number of business banking face-to-face relationship managers in Scotland from four to 10, saying the move comes in direct response to SME consumer demand.
Rabobank joins Trussle funding round
Rabo Frontier Ventures, Rabobank’s strategic investment arm, has contributed to a £7.5m funding round in online mortgage broker Trussle. It joined alongside existing investors Goldman Sachs Merchant Banking Division, Finch Capital and Propel Venture partners. The funding round took Trussle’s total to £26.7m.
Hampden & Co hires former SBS boss
Mark Thomson, the former boss of the Scottish Building Society and a former credit director at Scottish Widows Bank, has been named head of credit at private bank Hampden & Co.
PRIVATE EQUITY
Thyssenkrupp makes elevator sale shortlist
Thyssenkrupp has shortlisted three private equity consortia in the auction of its €15bn elevator business. These are a consortium of Advent, Cinven and the Abu Dhabi Investment Authority, which are working with RAG Stiftung; a team consisting of Blackstone, Carlyle and the Canada Pension Plan Investment Board; and a group led by Brookfield.
Warburg Pincus mulls Reiss sale
Warburg Pincus has appointed investment bank Rothschild to launch a review of strategic options for high street retailer Reiss, which could involve a sales process.
INTERNATIONAL
JPMorgan Chase buys second Paris site
JPMorgan Chase has bought a second Paris building as it continues the shift of its euro-related trading operations from London due to Brexit. It is buying the site from BNP Paribas to house up to 450 staff. JPMorgan Chase’s head of France, Kyril Courboin, said “London will still be number one because we are only transferring euro activities.” JPMorgan currently has about 10,000 people based in London and 260 employees in Paris.
NAB boss: Bank criticism ‘well-founded’
Incoming National Australia Bank director Simon McKeon says major banks must not become "paralysed" by compliance concerns after a period in which the industry faced "well-founded criticism".
AUTOMOTIVE
New-car purchases slip
Analysis of official data by Auto Trader shows people are holding onto their cars for longer, with the average time between car purchases rising to 3.4 years in 2018. This comes as figures show that last year saw 2.3m new vehicle registrations, marking a six-year low.
AVIATION
Boeing seeking $10bn
Boeing is reportedly in talks to borrow at least $10bn as costs linked to the grounding of the 737 jet climb. CNBC says it has already secured at least $6bn from lenders.
FINANCIAL SERVICES
Fraud reports from formation agents fall
The number of suspicious activity reports (SAR) filed by company formation agents to the National Crime Agency (NCA) has fallen by more than half. Figures reveal that there were 23 SARs from trust and company service providers in the year to March 2019, with the 56.5% decline coming despite Government attempts to improve the system. The number of reports from other industries, including banks, accountants and estate agents, rose 3.1% to 478,437. Rachel Davies Teka, of Transparency International UK, said that the low number was disappointing, while Ava Lee, senior campaigner at anti-corruption organisation Global Witness, said: “This extraordinarily low number should be a wake-up call. The Government must fix the supervisory regime”.
Michael Spencer backs UK fintech fund
ICAP founder Michael Spencer, via his IPGL vehicle, is to contribute at least £25m to the new Element Ventures fintech fund. The new fund hopes to raise £100m to back firms with scale-up potential and will focus on emerging firms that are developing technologies tackle challenges faced by the banking and financial services industries.
MANUFACTURING
BAE Systems to buy US companies
Defence company BAE Systems is buying Collins’s military GPS business for $1.9bn and Raytheon’s airborne radios arm for $275m, with these being offloaded as a condition of the $101bn merger between Raytheon and United Technologies.
MEDIA AND ENTERTAINMENT
Profit boom for podcast firm
Podcast company Audioboom has posted a sharp rise in revenue after increasing its share of advertising spend. It saw a 91% increase in revenue to $22.2m in 2019, with its loss before interest, tax, depreciation and amortisation at $3m, down from $4.7m in 2018.
PROFESSIONAL SERVICES
Capita targets £200m non-core sell-off
Outsourcer Capita is planning the sale of a clutch of businesses, with sources saying it has put a £200m-plus price tag on its “specialist services” division. While it is planning to offload the nine businesses in one deal, it is reportedly mulling a break-up.
UK recruiters warn of damage from freelance tax reforms
A group of leading recruitment companies have written to Chancellor Sajid Javid, warning that changes to tax rules for off-payroll workers will hit their industry and could increase tax avoidance.
REAL ESTATE
London house buyers return in force
The number of house hunters in London reached a 15-year high this month, with estate agents reporting more new buyers registered with them in the second week of January than at any time for over a decade and a half.
RETAIL
Beales falls into administration
Department store chain Beales entered administration yesterday, having failed to secure a buyer, leaving over 1,000 jobs at risk.
ECONOMY
IMF downgrades global growth forecast
A report from the International Monetary Fund (IMF) predicts that economic growth in Britain is set to be sluggish over the next two years, with a forecast that GDP will grow 1.4% in 2020 and 1.5% in 2021. The IMF says the forecast “assumes an orderly exit from the European Union at the end of January followed by a gradual transition.” The report suggests the eurozone will see a slightly lower rate of growth, with an increase of 1.3% this year and 1.4% next, while global growth is expected to be 3.3% in 2020 and 3.4% in 2021. Looking at 2019, the IMF expects global growth to come in at 2.9%, lower than its previous prediction of 3%. It predicts that UK GDP rose 1.3% over the last 12 months.
Household optimism hits 12-month high
An IHS Markit survey has found that UK households became more upbeat about their finances in January, with optimism hitting a one-year high. Households saw living-cost inflation dip in January, while incomes from employment continued to grow. The conclusive election result seen in December and the clarity it brings in regard to Brexit are among drivers of the optimism, with Joe Hayes, economist at IHS Markit, saying: “Latest survey data certainly show some post-election bounce for UK household.” The poll also reveals that 23% of people expect the Bank of England’s next move on interest rates will be a cut, up from 19% in December.
OTHER
MaPS plots saving scheme
The Government is set to rollout a financial wellbeing programme designed to turn Britain into a "nation of savers" by 2030. The Money and Pensions Service says that the initiative will see an extra 2m people saving regularly within a decade, while 2m fewer would be using credit cards for day-to-day spending. This comes as analysis shows that 11.5m British adults have less than £100 in savings.