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Daily News Roundup: Tuesday, 21st November 2023

Posted: 21st November 2023


Coutts appoints Kleinwort's Fahad Kamal as CIO

Former Kleinwort Hambros chief investment officer Fahad Kamal has been appointed CIO at Coutts, the private bank owned by Britain's NatWest. The addition of Kamal comes alongside a number of staff changes at Coutts, including the addition of new chief financial officer Siobhan Boylan in September. Coutts has been working to move on from a damaging row with former Brexit party leader Nigel Farage over a decision by the bank to close his accounts, which ultimately led to the departure of both former NatWest CEO Alison Rose and former Coutts CEO Peter Flavel.

Banks' net interest margins fall as savings rates rise

Analysis of lenders’ third quarter results reveals that banks are experiencing a decline in net interest margins due to higher savings rates. NatWest Group reported a net interest margin of 2.94% in Q3, down from the previous year. Lloyds Banking Group and HSBC UK also saw decreases in their net interest margins. However, Barclays and Santander UK experienced slight increases. Nationwide Building Society bucked the trend with a net interest margin of 1.66%. Overall, banks are paying out more in savings interest, resulting in lower profits.


Private equity resorts to buying back companies after IPO flops

EQT, Cinven and Silver Lake are among the private equity firms taking portfolio firms private shortly after floating them in a bid to salvage investments that have struggled to perform on stock exchanges.  


Employees at two Wells Fargo branches plan to unionise

Employees at two Wells Fargo branches in Albuquerque, New Mexico, and Bethel, Alaska, are planning to unionise, a rare move in the financial services industry. The workers will notify the National Labour Relations Board of their intention to hold elections to decide on unionisation. This comes as labour action in the US has increased this year, with unions targeting companies across various industries.

Citigroup's Jane Fraser announces management changes

Citigroup CEO Jane Fraser has announced the next layer of management changes in a sweeping reorganisation. Fraser stated that the actions being taken to reorganize the firm involve difficult decisions, but they are believed to be the right steps to align the structure with the strategy.

Morgan Stanley names Jed Finn as head of wealth management

Morgan Stanley has named Jed Finn as the head of its wealth management unit. Finn, currently the chief operating officer of the division, joined the investment bank in 2011 and has held several leadership roles in the business.


Binance faces $4bn settlement to halt US criminal investigation

The US Department of Justice is seeking more than $4bn from Binance to settle a multiyear investigation into alleged bank fraud, sanctions violations and money laundering. A proposed settlement deal between the world’s biggest cryptocurrency exchange and prosecutors means Binance co-founder and chief executive Changpeng Zhao could return to the US to face criminal charges.

SEC accuses Kraken of operating unregistered trading platform

The US Securities and Exchange Commission (SEC) has accused crypto exchange Kraken of operating an unregistered trading platform, alleging that the company has made hundreds of millions of dollars unlawfully facilitating the buying and selling of crypto asset securities since at least September 2018. Kraken has not yet responded to the complaint. among the signatories.


Palantir wins £480m health service IT contract

The tech giant founded by a US billionaire Peter Thiel has won a £480m contract handling NHS patient data. Palantir, which is best known for its work with intelligence and military agencies in the US, put in a joint bid with professional services company Accenture for the so-called “federated data platform” to join up medical information across the health service. Health officials say the software will allow analysts to spot patterns in illness and use resources better, while ministers have said it will not be able to see individuals’ data.


Abu Dhabi-backed fund closes in on Telegraph

An Abu Dhabi-backed investment fund is poised to take control of the Telegraph newspaper and Spectator magazine. It comes five months after the publications were taken over by Lloyds Banking Group as it sought to recover debts owed by the Barclay brothers. RedBird IMI is a joint venture between US firm RedBird Capital and International Media Investments, which is owned by Abu Dhabi royalty. If the deal is successful, Redbird IMI would have the right to turn the loan into equity, handing it control of the titles. A spokesman said The Telegraph’s operations will be solely managed by RedBird Capital with IMI taking a passive role, distancing editorial matters from the Gulf state. More than half a dozen Conservative MPs have called for the deal to be probed on national security and press freedom grounds and MPs on the Commons culture committee are expected to hold private talks over the planned transaction today.


Property investor raises £147m for acquisitions

Sirius Real Estate has successfully raised £147m from investors to take advantage of attractive acquisition opportunities. A property industry insider told the Times that the move is seen as the first sign of the property market reopening after a year of little fundraising by major landlords and developers. Despite the company's share price trading below its net asset value, analysts believe that Sirius can appease shareholders by purchasing buildings at a similar or greater discount. The funds raised will be used for eight acquisition opportunities, four in the UK and four in Germany, with the aim of reducing the company's loan-to-value ratio to below 35%.


Lenders seize control of Cazoo

Bondholders have taken control of online motor retailer Cazoo as the company struggles under £649m of debt. Cazoo’s value has slumped more than 99% since it went public on the New York Stock Exchange in 2021. The debt for equity swap will dilute chairman and founder Alex Chesterman’s shareholding from 24% to less than 2%. Holders of $630m (£503m) of Cazoo debt will receive $200m of new bonds and shares “which will represent 92%” of stock in the company, the company said in a market statement. The company is currently valued at $14m.

BT in talks to buy second-hand smartphone seller musicMagpie

MusicMagpie is in talks with both BT and Aurelius, the private equity owner of The Body Shop, about a possible sale of the business, sending shares in the seller of refurbished electronics and gadgets sharply higher.


'Far too early' to talk about rate cuts – Bailey

The Bank of England governor warned on Monday that it was too early to declare victory over inflation asserting that there was more work to do to bring inflation back to its 2% target. Addressing an event in London, Andrew Bailey said policymakers needed to be alert to the threat that previous increases in the cost of food and energy would have knock-on effects on prices and wages. “Food prices tend to be very salient to consumers and closely linked to inflation expectations, so the evolution of food prices will matter for wage growth looking ahead,” Bailey said. “While the inflation data for October released last week were welcome news, it is much too early to declare victory. Inflation remains too high, and we need to make sure we get it all the way down to the 2% target.” Meanwhile, forecasters at Bank of America say the Bank of England will not be able to reduce interest rates from their 15-year highs of 5.25% until February 2025, with rates to come down by a full percentage point to 4.25% during the year. The view contrasts with money markets which have been betting on a cut to interest rates by June next year after inflation fell by more than expected to 4.6% in October.


Key firms advising Labour on private investment

HSBC, Santander, and Blackrock are among the companies advising the Labour Party on private sector investment through the newly launched British Infrastructure Council (BIC). The aim of the council is to address infrastructure challenges by partnering with the private sector to unlock capital.

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