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Daily News Roundup: Tuesday, 21st July 2020

Posted: 21st July 2020

BANKING

RBS tells 50k staff to work from home until 2021

Royal Bank of Scotland has told almost 50,000 staff to work from home until next year, with a memo telling the “vast majority” of employees who are working remotely that they will continue to do so until 2021. RBS had previously said staff could expect to work from home until the end of September at least, with the decision to extend the measures rolled out amid the coronavirus lockdown set to affect 49,000 staff in the UK. The banking group, which will rebrand as NatWest this week, told staff it will adopt a “cautious” approach to returning to work and plans to provide further guidance later this year.

Big banks look to the cloud to accelerate digital shift

The FT says the COVID-19 pandemic has prompted a “tech awakening” among banks, looking at recent deals that will provide HSBC, Goldman Sachs and Deutsche Bank with cloud-based services.

INTERNATIONAL

SoftBank pulls investment from Credit Suisse funds

Softbank has reportedly pulled an investment from Credit Suisse’s supply chain finance funds. This came after the Swiss bank reviewed the Japanese firm’s role in the funds amid reports that Softbank had injected $500m into some of Credit Suisse $7.5bn range of funds, which in turn invested in assets chosen by Softbank-backed lender Greensill Capital. Some of the funds' investments were in notes backed by loans Greensill made to other companies backed by SoftBank's Vision Fund.

UBS to pay to resolve municipal bond offering charges

UBS Financial Services is to pay more than $10m to resolve charges it circumvented the priority given to retail investors in certain municipal bond offerings. The US Securities and Exchange Commission said the firm improperly allocated bonds intended for retail customers to parties who immediately resold the bonds to other broker-dealers at a profit.

Julius Baer profits soar as turbulent markets lift trading activity

Swiss private bank Julius Baer has announced SFr491m ($523m) of net profits, up 43% year on year, citing heavy trading by ultra-wealthy clients as earnings per share reached SFr2.28.

Hong Kong bank branches close as infections rise

Hong Kong banks have closed branches as the number of COVID-19 cases increases, with HSBC temporarily closing two business centres for commercial banking and three mobile branches and shortening opening hours at all branches, while Standard Chartered also scaled back opening times. UBS reported that some 60% of staff were working from home, compared with a figure of 20% earlier in July.

Morgan Stanley to detail climate impact

Morgan Stanley is joining the Partnership for Carbon Accounting Financials and will report on the carbon emissions resulting from its lending and investments. This makes it the first major US bank to publicly disclose contributions to climate change.

AVIATION

Airlines urge 12-month waiver for passenger tax

A new survey from Airlines UK has found that without a 12-month waiver from paying air passenger duty (APD), 600 air routes will be lost in the short-term, alongside 8,000 jobs. Chief executive Tim Alderslade noted that “UK airports are in danger of losing many valuable routes over the coming months unless the Government steps in with a support package for our sector – starting with an emergency APD waiver to get us through the winter and into the recovery.”

Rival buyout bid submitted by Virgin Australia bondholders

Virgin Australia bondholders are seeking to buy the airline out of administration after submitting a deal challenging US investment fund Bain Capital’s offer. The bondholder pitch is believed to be “substantially the same” as its original offer made in June. The carrier’s debt pile had reached AU$5bn before administrators were appointed.

FINANCIAL SERVICES

FCA hits out at insurers

The Financial Conduct Authority’s (FCA) test case against eight insurance firms over their business interruption policies was launched yesterday, with the watchdog seeking a ruling as the firms say many policies do not cover pandemic-related losses, meaning policyholders cannot make claims linked to the coronavirus outbreak. FCA lawyer Colin Edelman QC criticised insurers for comparing stay at home guidance to advice around eating five portions of fruit and vegetables a day, while Leigh-Ann Mulcahy QC noted that by staying open many businesses would have broken the law by contravening coronavirus regulations or breached duties to employees, customers and visitors. The court was told yesterday that as many as 370,000 businesses and more than 60 insurers could be affected by the outcome of the case, which is due to last eight days.

Amigo Loans warns over ‘material uncertainty’

Subprime lender Amigo Loans has cautioned that “material uncertainty” over its ability to continue operating could lead it to seek additional financing, citing an increase in customer complaints, a regulatory investigation and the coronavirus crisis. Roger Lovering, acting chairman, said that while “the last 12 months have been a challenging and difficult period… with the general meeting now behind us and Glen Crawford reappointed as CEO, Amigo will move forward with more clarity and a determination to resolve the challenges we face.”

Pension firms failing to contact savers

More than two-thirds of savers have not been contacted by their pension firms during the coronavirus pandemic, according to PensionBee. The consultancy found only one in 10 people have received support when making any decisions about their pension in recent months. Others said the only information they had received was a warning there would be an increased delay to enquires during the lockdown period. PensionBee also found members received minimal communication from their pension providers even under normal circumstances. During lockdown around seven million people have taken action regarding their pension, according to Aviva.

Travelport suing Wex after withdrawal from $1.7bn deal

US-based firm Wex is being sued by Travelport after withdrawing from a $1.7bn deal to buy the latter’s payments businesses eNett and Optal, citing the coronavirus pandemic. Wex had triggered a material adverse change (MAC) clause, which is being challenged by UK-headquartered Travelport, co-owned by Wall Street hedge fund Elliott Management.

HEALTHCARE

GSK and CureVac in £130m deal

GSK is to pay £130m for a 10% stake in German biotech firm CureVac, with the two companies to focus on developing as many as five so-called mRNA-based vaccines and monoclonal antibodies (mAbs) for infectious diseases. Meanwhile, Synairgen has announced that its treatment helped reduce the risk of developing severe disease in hospitalised COVID-19 patients.

LEISURE AND HOSPITALITY

Cruise ship firm ceases trading

Cruise firm Cruise & Maritime Voyages is to shut down, administrators have confirmed. The company had been looking to secure additional finance, having been hit by the coronavirus crisis, and was in discussions with investor VGO Capital Management. However, it was unable to conclude the funding within the timescales required and has ceased trading.

PROFESSIONAL SERVICES

SThree profits fall

Recruiter SThree has seen its finances hit by the coronavirus outbreak, with pre-tax profit down 43% to £13m in the first half of the financial year and down 48% on an adjusted basis. Revenue slipped 8% to £602.6m.

REAL ESTATE

Grosvenor’s Mayfair plans submitted

Property developer Grosvenor has lodged proposals for 204,000 sq ft of offices and 67,500 sq ft of shops, restaurants and cafes in an area known as the ‘South Molton Triangle’ in London’s Mayfair. The new buildings are designed to produce 35% less carbon than those built to current standards.

RETAIL

Growth in shopper numbers tails off

Shopper numbers in Britain have failed to sustain the immediate growth that followed the reopening of hospitality and leisure industries, according to new data from Springboard. Footfall across all retail destinations increased 4.5% in the week to July 18 from the week before, compared to the 10.6% growth seen in the seven days to July 11. All of the rise was driven by high streets and shopping centres, where footfall rose by 6.8% and 4.7% respectively, while it declined by 0.7% in retail parks.

SPORT

Private equity firms look to score WSL deal

BBC News reports that several private equity firms have expressed interest in buying a stake in the Women’s Super League, with Bridgepoint said to have made an approach in regard to snapping up a large minority share of England’s top flight women’s football league.

ECONOMY

BoE economist sees V-shaped recovery

Andy Haldane, the Bank of England's chief economist, says the UK economy has seen a V-shaped “bounceback" following the coronavirus crisis. He told MPs on the Treasury Select Committee: “Roughly half of the roughly 25% fall in activity during March and April has been clawed back over the period since,” adding that the economy had grown by about 1% per week since hitting its floor in mid-April. Mr Haldane noted, however, that while there is evidence of a V-shaped bounceback so far, “that of course doesn't tell us about where we might go next.” He also told MPs that unemployment was rising and probably stands at about 6%, compared with the 3.9% recorded in the most recent official figures.

OTHER

Pandemic hits incomes

The Resolution Foundation says working-age households have suffered the worst income shock since mid-1970s, with the coronavirus crisis delivering a 4.5% decline in typical household incomes in May. The decline is the steepest since the 5.1% recorded in 1974 and exceeds the 2.7% fall in incomes seen in the wake of 2008’s financial crash. The think-tank’s Living Standards Audit says Government support has softened the impact for many people, calculating that without Government intervention the incomes of the poorest fifth of households could have fallen by as much as 8%. Adam Corlett, the Resolution Foundation’s senior economist, said: "This initial phase of the crisis has shown the importance of bold job support and a stronger social security safety net."

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