Banks call for urgent Brexit transition deal
The Association for Financial Markets in Europe has called for politicians to “urgently” agree a Brexit transition deal to avoid a legal and regulatory "cliff edge". The lobby group for Europe’s biggest banks said that a failure to act will leave even the best-prepared firms vulnerable to huge disruption as data transfers become illegal and contracts with clients become void overnight. AFME also highlighted the potential requirement for EU27 banks to amend or reissue contracts governed by English law and issues with debt during bailouts, as key areas for concern. Meanwhile, Theresa May has been accused of leaving the City of London “in the dark” after the Government admitted that a long-expected paper setting out its trade goals for financial services after Brexit may never be published. Senior City figures say they were promised a detailed position paper last autumn but that, following a series of delays, the Department for Exiting the EU (Dexeu) is now considering not publishing it all.
More small businesses get access to FOS
The Financial Conduct Authority wants to widen access to the Financial Ombudsman Service, enabling more firms to act if they feel badly treated by banks. An additional 160,000 small firms would be able to use the service, the FCA says in a consultation document. Currently, only individuals or firms with fewer than 10 staff can use the Ombudsman to settle financial disputes. Under the FCA proposals, firms with up to 50 staff could use the service. Larger businesses will still have to use the courts to settle disputes. Launching a consultation into the idea, the FCA said there needed to be an effective dispute resolution mechanism for businesses. Separately, Megan Butler, the FCA’s head of supervision, has defended the regulator’s oversight of professional bodies as part of its efforts to crack down on money laundering.
Lloyds to separate workers to comply with ringfencing
Lloyds is to erect a barrier at its London HQ to physically separate two groups of workers. The partition is being put up to comply with new “ring-fencing” regulations and will physically isolate investment bankers from the majority of staff working on Lloyds’ other business lines. Around 120 staff at Lloyds’ corporate markets division will end up in a “glass box”, according to Bloomberg, which first reported the news.
AIB launches funds for large firms
Allied Irish Bank has launched four funds totalling £2bn to help medium to large sized businesses tap into finance for growth. The funds, each offering £500m of finance, are available to businesses in the manufacturing, healthcare, hotels and hospitality and professional practices sectors across the UK.
The slow death of the cash ISA...
Moneyfacts has revealed a steep fall in the popularity of Cash ISAs, with the number of such accounts down 1.64m from the prior year - the lowest level in 15 years. HMRC recorded 0.93% returns on Cash ISAs across 2017, marking their worst level of return ever recorded.
GP Bullhound launches tech fund
GP Bullhound has launched a £57m fund to plough cash into tech start-ups.
UBS to merge private banks
UBS is merging its two private banks to improve service and increase profits by bringing its international wealth management operations together. The Swiss bank also revealed that it had made a SFr2.9bn (£2.2bn) write-off as a result of US tax reforms, although the impact on its capital ratios would be "negligible". It plans to launch a SFr2bn share buyback programme and posted a 32% rise in pre-tax profits to SFr5.4bn for 2017. Meanwhile, UBS has said it will go ahead with Brexit contingency plans early this year threatening hundreds of City jobs. The bank said it would not wait for details of a possible transition deal before implementing the measures which could see 200 staff moved to Europe.
Credit Suisse names new heads of Asia investment banking, Greater China
Credit Suisse has named two senior executives of the bank to replace departing senior banker Mervyn Chow as its Greater China chief executive and co-head of Asia Pacific investment banking and capital markets. Zeth Hung will take over the responsibility of Asia Pacific co-head of investment banking and capital markets, while Carsten Stoehr will become the CEO for Greater China, which includes Hong Kong, Credit Suisse said.
JLR to cut production over Brexit uncertainty
Jaguar Land Rover will cut production of some vehicles amid uncertainty over Brexit and changes to taxes on diesel cars. JLR said the car industry continued to face a "range of challenges" that were hitting consumer confidence. "Ongoing uncertainty surrounding Brexit is being felt by customers at home - with demand for new cars down 5.7% in 2017 - and in Europe where collectively, we sell approximately 45% of total UK production,” a spokesman for JLR said.
No desire to close UK plants, PSA boss says
Unite boss Len McCluskey met with PSA chief executive Carlos Tavares on Monday for crunch talks over job losses at Vauxhall's Ellesmere Port plant. McCluskey said it was "a frank exchange" and that Tavares had "repeated his desire not to close UK plants".
Gatwick considering emergency runway use
As it waits for expansion approval, Gatwick Airport is considering the potential of using its emergency runway to boost capacity. Chief executive Stewart Wingate has said Gatwick will be looking at "the capability of Gatwick's main runway and the northern (maintenance/emergency) runway before looking at a new runway over the coming months".
Kier throws Carillion staff life line
Kier Group has offered to take on more than 200 Carillion workers. The construction and services firm confirmed it is now a 50/50 joint venture with Eiffage, and that all 51 Carillion employees, including apprentices, have been offered roles, and that it has also assumed "full responsibility" for the Highways England smart motorway schemes, with around 150 Carillion employees that had been working on the schemes also given the opportunity to join Kier.
Skills gap to hinder construction boom
The Federation of Master Builders has warned that the UK is running out of bricklayers, carpenters and electricians as it embarks on the biggest housebuilding push in a generation.
Deutsche Boerse boss eyes clearing business
Theodor Weimer, CEO of Deutsche Boerse, has said that Brexit will provide an "historic" opportunity for the German exchange to gain a chunk of London's euro clearing business. Mr Weimer, who became CEO of Deutsche Boerse at the beginning of the year, said in his first public appearance that he would be focusing on the growth and future of the German exchange by expanding its business.
IntegraFin to list in London
IntegraFin, a London-based financial services firm, unveiled an estimated £500m float yesterday, the LSE’s first this year. The firm is behind the Transact software platform which offers online support to 5,000 financial advisers. IntegraFin posted pre-tax profits of £37m last year and has been working on the IPO plans for a year.
Sanofi agrees Bioverativ deal
Sanofi is to buy US biotech outfit Bioverativ for $11.6bn (£8.3bn) to boost its rare diseases offering. Bioverativ, spun off from Biogen last year, is a specialist in haemophilia and other rare blood disorders, and is the company's first major takeover since buying Genzyme in 2011 for around $20bn. Separately, data from Thomson Reuters show that the total value of global healthcare deals announced so far this year has reached $27bn – the best start to a year for healthcare dealmaking since at least 2007
LEISURE AND HOSPITALITY
Bookmakers’ shares down over cut to FOBT stakes
Shares in the UK’s bookmakers fell sharply over reports suggesting that the maximum stake on fixed-odds betting terminals could be cut. It is understood that ministers are likely to cut the stake from £100 to £2 after a consultation closes. Shares in Britain's biggest bookmaker, Ladbrokes Coral, were down 9% in afternoon trade. William Hill fell 12%. Analysts at Davy estimated Ladbrokes Coral's earnings could fall by 28% and William Hill's by 24%.
Revolution toasts bumper Christmas sales
Revolution Bars posted a Christmas sales jump on Monday, revealing sales at sites open for a year or more increased 5.9% in the four weeks to December 31. Comparable sales rose 1.9% in the 27 weeks to January 6. The update is the first since Stonegate and nightclub operator Deltic's £101.5m takeover tussle collapsed at the end of last year.
Fitch: UK house prices to stay flat
Fitch has forecast that the UK will be one of only three housing markets in the developed world in which house prices are unlikely to rise this year. The credit ratings agency pointed to stretched affordability, low income growth and financial services jobs relocating to Europe.
Tesco to cut 1,700 jobs
Tesco is to cut 1,700 jobs from its branches and warehouses as part of its turnaround strategy. The supermarket chain also plans to create 900 jobs and says it will try to move staff affected by the cuts into the new roles. Matt Davies, Tesco’s UK CEO, said the changes were "necessary to ensure our business remains competitive and set up for the future".
Dixons Carphone narrows profit forecast
Dixons Carphone has cut the top end of its full-year profit guidance, and now sees pre-tax earnings coming in at £365m-£385m, down from a prior estimate of £360m-£400m, due in part to the impact of tight mobile phone margins. Yesterday’s trading update revealed that total sales in the 10 weeks to January 6th grew 4%, boosted by a 28% sales surge in the company’s Greek division and 9% growth in the Nordics. Like-for-like sales increased 6%.
UK economy can handle Brexit, says O'Neill
Former Goldman Sachs economist Jim O‘Neill, the former Treasury minister who backed staying in the EU before the 2016 referendum, has said Britain’s economy will improve upon many of 2018's forecasts. He said the benefits of global growth in the coming years will “dwarf” any hit from leaving the European Union.