BTG Advisory
Moratorium on commercial evictions extended
BTG Advisory partner Andrew Dalton outlines how the Government’s move to extend a ban on commercial evictions until March 2022 will affect tenants and landlords, with the latter also having had the powers of recovery blocked for longer. However, with the moratorium on winding up petitions and statutory demands extended until September, landlords will from this point be able to exert pressure on those tenants who won’t pay, rather than can’t pay. Dalton goes on to explain how the Treasury hopes to establish a legally binding arbitration process to provide commercial tenants and landlords with assurance that COVID-19 related rent debts will be settled fairly, but in the meantime mutually beneficial agreements will need to be reached. Dalton concludes that although business owners may be relieved by the moratorium extension, it comes as a blow to commercial landlords scrambling to raise sufficient cash to survive the pandemic, and raises the prospect that “this is a ticking time bomb for unviable businesses in need of recovery.”
BANKING
Catherine McGuinness: City needs to nurture its small firms
The policy chair at the City of London Corporation, Catherine McGuinness, writes in City A.M. for the need for the Square Mile to build on its strengths - resilience, flexibility and innovation – but also ensure it nurtures the small businesses that make the City an attractive place to invest, work, live, learn and visit. “We know the decision last week by the Government to delay the end of Covid restrictions would have been deeply disappointing news for many City businesses and workers hoping to return to the office,” McGuinness says, adding: “While we must be guided by the data, we also urge policymakers to keep the decision under close review, based on the evidence, so that the capital can return to being a vibrant and thriving hub as soon as possible.”Meanwhile, both the head of the CBI and the chairman of Lloyd's of London have warned against giving workers the legal right to demand remote working.
Goldman Sachs payroll and payments services launch in UK
Goldman Sachs is to introduce transaction services in the UK this week, in a move representing the firm's second diversification following the launch of online retail savings bank Marcus three years ago. Hari Moorthy, transaction banking global head at the firm, stated: “The growth of this business has exceeded our estimates and we are very excited to bring transaction banking to the UK to expand our client reach and streamline banking for multinational corporations with a presence in the US and the UK.”
PRIVATE EQUITY
In defence of private equity
Patrick Hosking defends private equity in the Times, following outcries over the bid for Morrisons by US firm Clayton Dubilier & Rice. Many fear if the supermarket is taken over by a private equity house it will be asset stripped, thousands will lose their jobs and investment and service levels will dry up. Although there are some “horror stories” and sectors ill-suited to such takeovers, the image problem private equity has in Britain is not a fair one, Hosking contends, going on suggest that private equity can help improve its image by being more transparent, “especially if it hopes to start buying Britain’s biggest companies.”
INTERNATIONAL
China orders banks to intensify anti-crypto campaign
The People’s Bank of China on Monday told its largest state-owned banks as well as other payment platforms to “investigate and identify” bank accounts facilitating cryptocurrency trading and block all corresponding transactions. The order is part of a recent Chinese government crackdown on cryptocurrencies that began in May. The central bank said cryptocurrency trading "disrupts normal economic and financial order" and can facilitate money laundering and other crime.
Hong Kong ahead of London and NY in bid to get bankers back in the office
London and New York are falling behind Hong Kong in the race to get bankers back in the office, with Morgan Stanley already having 70% of its Hong Kong workers back at their desks and Credit Suisse around 70%. JP Morgan plans to reach that same office occupancy in the coming weeks, while Bank of America aims to reach full office capacity in Hong Kong by the end of this month.
Sabadell open to selling TSB, CEO says
Cesar Gonzalez-Bueno, the CEO of Banco Sabadell, said on Monday that the Spanish bank is open to selling its British unit TSB if the right offer came along, but a disposal is not currently on the cards.
Petty protectionism will not help European bank prospects
The FT’s Patrick Jenkins says the EU’s decision to freeze many large UK and US institutions out of EU Recovery Fund syndication could prove to be profoundly self-defeating for European banks.
HSBC: billionaire boom supports Asian wealth management drive
With the number of billionaires rising fast in Asia, HSBC is aggressively expanding its wealth management operations in the region, hoping to grow revenues at a compound annual growth rate of more than 10%.
BBVA to sell custodian unit
BBVA plans to sell its depositary unit for €400m. The Spanish bank is handling the sale itself and expects to close a deal in the second half of the year, according to reports.
AUTOMOTIVE
Aston Martin in legal dispute over payments for £2.5m Valkyrie ‘hypercar’
Aston Martin will take a £15m hit to profits this year, with £10m of that from missing customer deposits. The carmaker is suing two Swiss car dealers for the cash.
AVIATION
Lone Star sweetens offer for Senior
Lone Star Global has improved its takeover offer for aircraft parts supplier Senior Plc of £838.8m after the London-listed company rejected a previously undisclosed proposal last week.
Norwegian Air’s board fires chief executive Jacob Schram
Norwegian Air Shuttle chief executive Jacob Schram has been replaced with the firm's finance director Geir Karlsen, who has announced plans to increase the profitability of its low-cost operations.
UK airport expansion plans grounded by Covid and climate change
The FT reports on how the pandemic has meant airport projects have been put on hold and now face financing hurdles due to a sharpening focus on climate change.
CONSTRUCTION
Tinkler makes comeback with construction group rescue
Andrew Tinkler, the former boss of Stobart Group, has taken control of NMCN, a struggling construction company. Tinkler’s company, Svella, has led a £24m refinancing deal to become a controlling shareholder of the firm.
FINANCIAL SERVICES
Treasury looks beyond the EU for financial services ties
Economic secretary to the Treasury and City minister John Glen has said the UK is seeking deeper financial services ties with trading partners beyond the EU to help the Square Mile thrive post-Brexit. “When it comes to developing a more open industry, we've been working hard seeking new international financial services agreements,” said Mr Glen. “We've already signed a number and we're continuing the financial services dialogues with other countries, including the US, New Zealand, Australia, Japan, Switzerland, Singapore, China, India and Brazil.” Mr Glen told the City Week conference: “While openness means deepening international relations, we think it also means improving our own domestic competitiveness too so that we can take full advantage of our new position on the world stage. And that means creating the right conditions for industry to thrive outside the EU.”
Amber Group raises $100m for expansion
Hong Kong-based cryptocurrency start-up, Amber Group, founded by former Morgan Stanley traders, has raised $100m, scoring a pre-money valuation of $1bn. Amber Group serves over 500 institutional clients, trading over “$330bn across 100+ electronic exchanges” since its inception, expanding also to retail consumers with the launch of its mobile app in 2020.
Report backs Provident’s claim that consumer credit division has no value
Provident Financial's view that its doorstep lending unit will likely face insolvency if its £50m settlement plan is not endorsed by a UK court has been backed up by an independent assessment, the firm said on Monday.
Tesla investor warns of ‘deep sickness’ in UK capital markets
Baillie Gifford fund manager James Anderson has accused UK asset managers of being obsessed with short-term performance leading to the FTSE 100 being deprived of innovative and fast-growing companies.
LEISURE & HOSPITALITY
Hospitality sector still reeling as restrictions remain
The Lloyds Bank UK Recovery Tracker has shown that the delay in removing COVID-19 restrictions is putting hospitality firms under increased pressure. Graeme Smith, managing director of AlixPartners noted: “A further delay of four weeks is a devastating blow, creating
significant uncertainty and further financial strain,” while Michael Kill, chief executive of the Night Time Industries Association, said the
sector was “on the verge of breaking.” Meanwhile, the Times reports on how a hiring crisis in hospitality has pushed restaurants and bars to increase wages and take on younger workers.
Bridgepoint confirms Itsu deal
Bridgepoint has confirmed a deal to take a stake in fast-food chain Itsu which the private equity firm says will help create 2,000 UK jobs within the next five years.
MEDIA & ENTERTAINMENT
Murdoch explores tie-up with BT Sport
Rupert Murdoch is in talks about a partnership between his News UK business and the television arm of the BT. A deal would allow BT to focus on its broadband network while sharing the risk of securing broadcast rights for sport, while News UK is looking for fresh sources of revenue beyond newspaper publishing and to build on its digital broadcasting ventures. BT has already had detailed talks with international sports streaming business Dazn but is keen to expand talks with News UK and ITV.
REAL ESTATE
Bristol Temple Island £350m hotel and homes plan agreed
Legal and General is to invest £350m to build hundreds of homes in Bristol on land previously earmarked for an arena. The development, next to Bristol Temple Meads railway station, had originally included plans for an arena but L&G said it had "agreed terms" with Bristol City Council to build a hotel, conference centre and 550 new homes.
RETAIL
B&M hikes pay for bosses
B&M said in its annual report that it has reviewed its pay policy to reflect its "significant rate of growth" since it listed in 2014. Chief executive Simon Arora's maximum bonus will be increased to 200% of his salary, compared to 150% previously, and chief financial officer Alex Russo's maximum bonus will rise to 150% of his salary, from 125%. The change could mean that Mr Arora walks away with a £1.6m bonus for the year and a salary of £810,000.
ECONOMY
Double edged sword for business as hybrid working sticks
A survey by the London Chambers of Commerce and Industry (LCCI) has found that over three-quarters of office-based businesses expect their staff to spend at least one day a week working from home after the pandemic, with almost one in five predicting no return to the office at all. A separate study from LinkedIn reveals almost half of employees want hybrid working, 38% want to work remotely for good and just 12% want a full-time return to the office. The upshot is businesses serving commuters face permanently lower footfall. Andrew Goodacre, chief executive of the British Independent Retailers Association, said “there will be casualties” among city centre businesses. “It is going to be horrible, it means a loss of what were perfectly good businesses prior to the pandemic,” he said. However, independent retailers in towns and suburbs could benefit as home workers visit local shops more frequently, he added.