BANKING
FCA overdraft changes could save £100m
The Financial Conduct Authority (FCA) plans to overhaul unarranged overdrafts so their costs are more in line with that of arranged overdrafts. FCA chief Andrew Bailey said unarranged overdrafts tended to fall "much more heavily on the most vulnerable in society" who could save around £100m a year.
Government urged to protect post offices
MPs are backing a campaign by the Daily Mail which calls on the government to guarantee the future of the UK’s post offices. It comes after warnings that up to 2,500 will shut or downsize in the next year. Mike Cherry, chairman of the Federation of Small Businesses, said: “With bank branches and cash points closing, a properly funded post office network is crucial to the success of small firms.”
Charity Bank lends £48m to social enterprises
Charity Bank lent £48.6m to charities and social enterprises in 2018 - up 43% on the previous year. Last year's loans included £21.2m to support housing and local facilities projects; £12.1m for the provision of arts, heritage, sports and faith, and £7.9m towards employment, training and education.
Fifth of free ATMs set to charge
The ATM Industry Association says nearly one fifth of free cash machines in Scotland are expected to start charging customers for use in the next 12 months.
INTERNATIONAL
Morgan Stanley fund acquires stake in French group Tikehau
Morgan Stanley is acquiring a 5.5% stake in Tikehau and plans to invest at least €300m of fresh equity into the French asset manager.
International banks to boost Czech fund’s coffers
The Czech units of Erste Bank, UniCredit, Société Générale and KBC are to pay a percentage of their profits into a new Czech national development fund, the country’s PM has said.
Trump defends his under-fire relationship with Deutsche Bank
Donald Trump has defended his relationship with Deutsche Bank amid claims that the bank failed to report suspicious transactions to justice department regulators.
Investors spooked by rise in commercial sour loans
Analysis by the FT shows non-performing loans at the 10 largest US commercial lenders rose 20%, or $1.6bn, in the first quarter.
AUTOMOTIVE
JLR posts hefty losses amid Chinese slowdown
Jaguar Land Rover has revealed a £3.6bn annual loss following a £3.1bn write down to cover falling demand for newer models and diesel-powered cars. Revenues at the carmaker were £7.1bn, down £421m year-on-year, while operating cash flow was £1.4m.
Ford announces 7,000 job cuts
Ford has announced it will cut 7,000 jobs globally by the end of August in an effort to save costs. Ford said the plan, which includes 2,300 cuts in the US, will save the company $600m (£471m) a year.
AVIATION
Ryanair profits plummet
Ryanair has reported a 41% slide in pre-tax profit for the year to March to €948m (£830m). Excluding a €182m loss made by Lauda, its new Austrian subsidiary, profits were down 30%, at the low end of downgraded guidance published by the company in January.
FINANCIAL SERVICES
Top graduates shun “uncool” financial services
Financial services lies outside the top ten destinations for graduates who are choosing instead careers with trendy businesses in fashionable industries such as technology. Dame Helena Morrissey, head of personal investing at LGIM, told the City Week conference: “We do need to better represent society, we need to make sure we are very joined up […] we need to be living and breathing what we are talking about when it comes to responsible investing.” Bruce Carnegie-Brown, chairman of Lloyd's of London, said the perception that financial services was “regulated to death” made fintech more attractive while John McFarlane, head of TheCityUK, believed young workers were targeting “tomorrow’s industries and tomorrow’s companies rather than today’s.”
City minister rules out Brexit dividend from looser regulation
City minister John Glen has claimed adopting a looser regulatory environment after Brexit will not deliver an "enormous economic dividend" and that the majority of Square Mile firms want instead a "reliable ecosystem" with clarity over the future relationship with the EU. Speaking at the Guildhall, underlining four key areas of activity for the financial sector - green finance, fintech, India and China - Glen said he recognised that people in the City are “frustrated and in despair” at the state of the Brexit talks, but stressed: “We want a fair settlement in terms of us leaving the EU but knowing what the dynamics of that future co-operation will look like.”
Cryptocurrency scams net £27m
The FCA has warned of the rise of fraudulent online trading platforms, after the number of crypto and forex fraud claims jumped from 530 to 1,834 in the last financial year. Action Fraud said victims of such scams lost £27m in 2018-19. The FCA said that celebrity endorsements and images of luxury items such as expensive watches and cars on social media posts were often used to promote the schemes.
Woodford fund downgraded
Ratings agency Morningstar has downgraded Neil Woodford’s flagship equity income fund to neutral, its second lowest rating, due to underperformance and "persistent redemptions".
LEISURE AND HOSPITALITY
Goldman Sachs in talks to buy budget hotel chain
Goldman Sachs is in talks to buy French budget hotelier B&B Hotels from PAI Partners in a €2bn deal. It is understood to be Goldman's second foray into the hotel industry, having joined forces with two US hedge funds to help save Travelodge from the brink of collapse in 2012.
REAL ESTATE
Foxtons appoints new finance chief
Foxtons has named Richard Harris as its new CFO, replacing Mark Berry. The announcement comes as Foxtons reported group revenue for the first quarter was down 2.9% from a year earlier at £23.8m.
ECONOMY
BoE deputy outlines Brexit impact
Ben Broadbent, the Bank of England’s deputy governor, has warned that Brexit is causing unnecessary damage to the UK economy because businesses have had unrealistic expectations of how quickly it would be resolved. He suggested rising uncertainty over Brexit was making businesses delay investments over fears they would be too costly to reverse if things went wrong. However, Mr Broadbent made clear he was not advocating a no-deal Brexit as preferable to continued uncertainty.
Pessimism surrounds family finances
An IHS Markit survey shows that although unemployment is at record lows and wages are increasing, Britons are feeling more pessimistic about their finances than at any time since September 2017. The indicator shows household sentiment fell to 42.5 this month, down from 43.8 in April. The index, which measures overall perceptions of financial wellbeing, has been struggling below the 50 mark that signals a positive outlook for several months.
OTHER
Nearly half of SMEs value tech more than people
A survey by CYBG has found 46% of SMEs believe that technology is more important to their businesses than people. The study also indicates that technology may be the winning factor for SMEs trying to secure funding, with 36% of tech-led businesses across the UK finding it "easy" to access funding for growth, while only 19% of all other business types feel the same. Birmingham, London and Edinburgh were found to be the three cities investing the most in technology.