Barclays boss to defend strategy
Barclays boss Jes Staley is set to defend the bank from an attack by activist investor Edward Bramson at meetings in Davos this week. Mr Bramson, who is attempting to secure a place on the board, is calling for an overhaul that would see Barclays pull back from its investment banking operations and shift greater focus to retail banking. It is reported that while Davos is primarily a chance to meet key customers, Mr Staley will take the opportunity to defend strategy at Barclays.
Banks have no security on Pat Val assets
The Telegraph reports that HSBC and Barclays have no security over Patisserie Valerie's assets, meaning that if the café chain collapses, loans of £9.7m will rank no higher than suppliers and other creditors. Meanwhile, Patisserie Valerie’s holding company has indicated that talks with creditors are ongoing. The chain, which has been trying to secure an extension of loan arrangements with the aforementioned banks that expired on Friday, had been expected to provide an update on Monday morning.
ICICI offers 1.55% easy access rate
ICICI Bank is offering an easy-access savings account with a 1.55% rate. This lifts the average top five easy-access rates to a three year high. Nottingham Building Society introduced the same rate in October 2018, with it proving so popular that the society withdrew it after 48 hours. Top rates have peaked at 1.5% in recent months, with banks including Cynergy Bank, Virgin Money and West Bromwich Building Society matching the rate offered through the Marcus account launched by Goldman Sachs in September last year.
Leeds expands HMO landlord mortgage range
Leeds Building Society has expanded its mortgage offering with deals targeting landlords managing houses in multiple occupation (HMOs). The range of loans is the first on the market which makes a distinction between small and large HMOs. Leeds' director of products Matt Bartle said the move comes in an effort to align with changes to licensing rules for such properties which were introduced last year.
Graduates can bank on big wages
Investment banking offers the highest graduate starting salary, with the £60,000 wage up £10,000 on last year’s best offering. The report published by High Flyers Research shows that the pay packet is twice the £30,000 average for graduates in their first jobs.
Banks encouraged to help abuse victims
The Home Office’s new Domestic Abuse Bill will introduce a focus on tackling economic abuse, where a victim’s economic freedom is restricted, with the Government set to work with UK Finance to encourage banks and financial authorities to do more to support victims of domestic abuse.
Apollo in talks over packaging maker
Apollo Management is set to acquire plastic packaging maker RPC in a £3bn deal. RPC last week extended a deadline for the company to make a firm offer or walk away to Wednesday. Apollo is well-placed to secure a deal after Bain Capital dropped out of the running last month.
Firms eye Nestle's skin health business
Cinven and Advent have teamed up to bid for Nestle's skin health business, with Blackstone, KKR, Carlyle, CVC, EQT and Partners Group also expected to bid. The joint bid could value the business at around $7bn, sources suggest. The sale, being run by Credit Suisse and Evercore, is expected to see first-round bids submitted in early March.
Investor frustrated over StanChart share performance
Standard Chartered’s share price performance has been questioned by its largest shareholder. Singapore-based sovereign wealth fund Temasek, which holds a 16% stake, told the bank's senior management team of its frustration over a near 40% decline in share values since 2015.
Receding tail risks give UBS’s Weber ‘more comfort’ on economic outlook
UBS chairman Axel Weber believes the tail risks hitting the global economy may be receding, with the possibility of a no-deal Brexit slimming and the US Federal Reserve becoming more cautious about tightening monetary policy.
Orcel affair illustrates the mess surrounding bankers’ rewards
Patrick Jenkins in the FT says Santander cancelling plans to hire UBS investment bank boss Andrea Orcel as chief executive highlights “an odd side-effect” of sector pay reforms.
Former banker convicted for selling tax data
A former UBS banker accused of selling information about wealthy tax evaders to German authorities has been convicted of economic espionage. The Swiss Federal Criminal Court sentenced the man to 40 months in prison on charges including money laundering, although he was acquitted of breaking banking secrecy laws. Prosecutors say that between 2002 and 2012 the banker illegally collected data about account holders and sold the information for €1.15m.
Self-driving car insurers must keep up with technology
George Swan, partner and insurance specialist at law firm Freshfields Bruckhaus Deringer, describes the future of automotive transport as "set to change immeasurably inside the next decade." Insurance products must be designed with shifting legislative and commercial developments constantly front of mind for years to come, he says, only then can self-driving cars flourish.
Positive forecast lifts airline shares
A positive note from Davy Research has seen share prices at airlines including Air France-KLM, Norwegian and Thomas Cook boosted. The note forecasts that “earnings momentum in the European airlines sector will inflect positively” while industry consolidation, reduced capacity growth and moderating fuel costs “should support earnings per share upgrades as the year progresses." Davys singled out Ryanair and Wizz Air as its "preferred names," upgrading their ratings.
Flybe subsidy boosted by £1m as it battled to survive
Flybe was given an increase of £1m in public subsidies, with the Government letting it switch a flight route from Gatwick to the more expensive Heathrow, increasing flight frequency.
No-deal could see UK staff moved to US
BlackRock and Goldman Sachs Asset Management are reportedly planning to move some British-based fund managers to New York in the event of a no-deal Brexit. The temporary relocation would see the portfolio managers later transferred to mainland Europe once Britain and the EU agreed a regulatory framework. The European Securities and Markets Authority and the Financial Conduct Authority are said to be in talks on agreements which would oversee cross-border asset activity and managers.
Fund managers could cut jobs
Kyle Sanders, an analyst at Edward Jones, believes pressure on financial markets could see job losses across fund management, saying: “When markets go down, the first place asset managers look to cut costs is with headcount." This comes after BlackRock and State Street this month announced job cuts, with hedge funds AQR Capital and Balyasny Capital also looking to trim staff numbers.
Collaboration will drive innovation
Deborah O’Neill and Martin Robinson in City AM look at the impact digitalisation will have on financial services, comparing how large firms and start-ups are driving and utilising innovation. They say that while large firms are “hampered by legacy IT systems and complex governance” they are “shielded to a degree” from disruption by their scale. Start-ups, on the other hand, are “churning out wave after wave” of digital products “with the potential to reshape banking,” but struggle to navigate financial regulation and win large numbers of clients. With this is mind, Ms O’Neill and Mr Robinson suggest collaboration is key, as “fintechs and big financial services companies hold the solution to each other’s problems.”
GSK chairman to give way
Sir Philip Hampton is stepping down as chairman of pharmaceuticals firm GSK to give way to a successor who will take the business, which recently announced a deal with Pfizer to combine their consumer health units, forward to become a separately listed company.
LEISURE AND HOSPITALITY
Easyhotel cautious amid sales rise
Low-budget hotel chain Easyhotel has revealed that total sales were up 31% in the three months to the end of December, while revenue soared 60%. The AIM-listed firm, which has seven franchised hotels under development across Europe and in Dubai, however warned that the 2019 financial year will be "more challenging" than 2018.
William Hill lowers profit guidance
As it moves towards its £242m takeover of Swedish gaming company Mr Green & Co, William Hill has confirmed a likely fall in profits for 2018. Despite underlying profit growing by 4%, the bookie highlighted more strenuous laws on customer due diligence online and a decline in high street sales. Operating profit of £234m is in line with adjusted guidance of between £225m and £245m, after William Hill made £290m in 2017.
Just Eat to deliver new boss
Just Eat chief executive Peter Plumb is to step down from his role. The takeaway ordering website is under increasing pressure to compete in a tightly-packed market, with shareholder Cat Rock Capital last month calling on the board to “address key issues” and sell off non-core assets.
Property price growth slowest in seven years
Asking prices for British property are rising at the slowest pace in seven years, according to Rightmove. The average asking price of new houses coming to the market rose by 0.4%, or just over £1,200, this month to £298,734, the lowest monthly rise at this time of the year since 2012. The national average was dragged down by London and the South East, where prices fell by 1.5% and 0.2% respectively.
No-deal Brexit amongst biggest threats to growth
The IMF has warned that a no-deal Brexit and a sharper slowdown in China are the biggest risks to growth in the global economy in 2019. In a new report on the world economic outlook, the organisation also warns escalating trade tensions could undermine global economic growth. For the world economy, the IMF is now predicting growth of 3.5% in 2019. In October, it forecast 3.7%. The report predicts the UK’s GDP will grow by 1.5% this year, should it secure an agreement to leave the EU, and 1.6% in 2020.
Investors see record dividends
Link Asset Services’ Dividend Monitor shows that investors in British companies saw almost £100bn in dividends in 2018, marking a new record. The quarterly report shows that dividend payments were up 5.1% to £99.8bn. With 40% of British dividends paid in dollars, income investors were boosted by the weaker pound in the second half of the year. The report shows that the yield on the overall market has increased to 4.8%, up from 3.6% a year ago. Justin Cooper, chief executive of Link Market Services said this was an “extraordinary height,” describing 2018 as “a terrific year for dividends but a terrible one for share prices.” The report expects modest growth for dividends in 2019, adding that they are likely to rise 4.2% to £104bn next year.