Metro Bank hires new directors
Metro Bank has announced that it has appointed a new chief information officer and chief transformation officer as the lender looks to revamp its reputation following a turbulent six months. Cheryl Newton, a technology specialist who has worked at JP Morgan, HSBC and Barclays, will be joining as chief information officer. Daniel Frumkin, who is leaving a Bermuda-based community bank called The Bank of N.T. Butterfield & Son, has been appointed as chief transformation officer. Meanwhile, Metro Bank has confirmed reports that it is preparing to sell a £500m portfolio of mortgages to help to restore investor confidence. The bank is expected to sell the portfolio, which is thought to be mainly made up of loans to landlords, to Cerberus Capital Management. Writing in the FT, Matthew Vincent says a takeover of Metro by a larger bank, or a merger with a challenger bank, might help it to solve its digital or capital challenges.
Lloyds agrees settlement with Standard Life Aberdeen
Lloyds Banking Group is to pay about £140m to Standard Life Aberdeen (SLA) to settle a legal fight over the future of a £100bn asset management mandate. The cash settlement is less than had been anticipated but it will allow the Edinburgh-based funds house to retain management of roughly £30bn of assets for three years. A further review of the stewardship of those funds would then take place in 2022. The settlement, which is expected to be finalised later this week, will come four months after an arbitral tribunal ruled that Lloyds had not been entitled to give notice in February last year to terminate its agreement with SLA.
Banks assess no-deal threat
Banks are assessing the risks a no-deal Brexit poses to small businesses, according to accountancy firms which have been advising banks on their preparations for Britain leaving the EU without a deal in place. The Telegraph notes that while the Bank of England believes the banking sector is well-prepared, a sudden downturn could hit SMEs and their access to credit. The BoE found that 80% of businesses believe they are prepared for a no-deal Brexit but around one in 10 have no contingency plan and did not expect to develop one. SMEs were also deemed more likely to have not prepared for a cliff-edge Brexit.
One Savings shares worth holding
Miles Costello in the Times Tempus examines the prospect for investors in One Savings. He concludes that a deal with Charter Court will make both lenders stronger but the economic outlook remains uncertain and thus he recommends a “hold” on the stock.
Bids received for Tesco Bank’s mortgage book
The Times reports that Lloyds Banking Group and RBS are among several banks that have tabled second-round bids for Tesco Bank’s £3.7bn book of mortgages.
Banks urged to push ahead with Brexit plans
Elke Koenig, head of the euro zone’s banks resolution board, has said that EU banks should continue with preparations for Britain’s departure from the EU despite Brexit having been postponed until October 31. Ms Koenig said: “It’s not a secret that with the postponement of Brexit, some of the activities banks had scheduled have been slowed down. There is no reason to postpone. Get prepared, be organised.” Koenig added that the EU should press ahead with building its own capital market so that banks can more easily issue such debt inside the bloc.
UniCredit could cut 10,000 jobs
UniCredit is considering cutting around 10,000 jobs, or 10% of its global workforce, as part of a new business plan which will be unveiled in December. According to a source close to the matter, the bank would announce at least 9,000 redundancies and the job cuts would be almost entirely in Italy.
Profit slide at Julius Baer
Julius Baer has reported a 19% slide in adjusted net profit in the first half of the year, with weak trading from wealthy clients continuing. The Swiss private bank posted a net profit of SFr 391m in the first six months of 2019, with assets under management at SFr 412bn, an increase of 8% on the end of 2018.
Ireland defends bank pay curbs despite industry blowback
Ireland’s finance minister Michael D’Arcy has insisted that a banking pay cap should remain in force despite pressure from lenders who want the policy scrapped after losing key staff.
Volvo recalls 70,000 cars over fire risk
Volvo is recalling almost 70,000 cars in the UK over concerns that they could catch fire. It is part of a global recall of more than 500,000 diesel vehicles that suffer from a fault. Volvo said that in extreme cases in models made since 2014 a plastic engine intake manifold, which takes in air, may melt and catch fire. The recall is likely to cost Volvo, which has built its reputation on safety, tens of millions of pounds.
BA pilots vote in favour of strike action
British Airways pilots have voted in favour of strike action in a dispute over pay, threatening a walkout over the key summer holiday period. The British Airline Pilots’ Association said that 93% of its members had voted in favour of industrial action. A strike would be likely to cause severe disruption, as Balpa represents about 90% of the airline’s pilots.
Regulator urges Treasury to expand credit unions
The Financial Conduct Authority has urged ministers to review credit union rules to give vulnerable consumers a viable alternative to payday lenders, saying looser laws would allow such entities to offer customers a wider range of products and services. In a report on alternatives to high-cost credit, the FCA said: “In the short-term at least, the capacity of credit unions to make credit available to a significant portion of high-cost credit users is limited,” adding that in the longer term, HMRC should consider if there is value in a review of credit union and society legislation, “to facilitate the growth of larger credit unions.” The Association of British Credit Unions Limited welcomed the FCA’s recommendations, saying credit unions “are the most active and sustainable providers of affordable credit to those underserved by the mainstream and who borrow from expensive alternatives,” adding that liberalising the Credit Unions Act could allow credit unions to expand “and play a bigger role in disrupting high-cost credit.”
Claim firms seek to extend PPI deadline
A group of claims firms is considering a legal move to try and extend the PPI deadline from August 29th. Simon Evans, CEO of the Alliance of Claims Companies, says the cut off set by the Financial Conduct Authority is “not fair”. His organisation believes that, once interest has been stripped out, redress has been less than half of £50bn of PPI that was estimated to have been underwritten. Research shows that many people are not aware they had PPI despite a high-profile advertising campaign from the FCA.
Bayer agrees to sell Dr Scholls
Bayer has agreed to sell its Dr Scholl's footcare brand to private equity group Yellow Wood Partners for $585m (£469m).
LEISURE AND HOSPITALITY
Travelodge plans 26 new seaside hotels
Travelodge is planning to open 26 hotels in seaside resorts under a multimillion pound investment plan that it predicts will lead to 650 new jobs. The new locations will include Lerwick on the Shetland Islands, Pwllheli in North Wales and others in Cornwall, Jersey and Guernsey. Tony O'Brien, the development director at Travelodge UK, said: “There are significant regeneration and modernisation projects taking place in seaside towns and cities across the UK, and we have identified 26 coastal areas that could benefit from a Travelodge hotel.”
Whitbread shareholders collect from Costa sale
Whitbread has said that it has completed a programme to return £2.5bn to its shareholders after it sold Costa Coffee to Coca-Cola last year. Whitbread's shares have risen by around 30% over the past 18 months after it was buoyed by cash generated by the sale of its high street coffee shop business.
Pay at London’s ‘magic circle’ lawyers hits new record
New figures have shown that pay at London’s “magic circle” law firms reached record levels last year, boosted by multinationals seeking advice on the regulatory fallout from Brexit.
Ending Help to Buy ‘will slow down housing market’
The next prime minister has been urged to extend the government’s Help to Buy scheme, following fears that its end will cause a slowdown in the housing market in parts of the country. The scheme has accounted for more than 80% of home sales in the past 18 months in 22 local authorities, according to research, with Oxford the most dependent, followed by Gravesham, Warrington and Waltham Forest.
Bathstore bought out of administration by Homebase
Bathstore has been bought out of administration by Homebase, confirming plans it will take control of 44 Bathstore shops, safeguarding around 150 jobs on the shop floor and another 25 at head office. However, a further 91 remaining stores employing 200 staff are at risk of closure.
Britain could already be in recession, economists warn
The National Institute of Economic and Social Research (NIESR) has warned that Britain may already be tipping into recession due to the effects of Brexit. It believes there is around a 25% chance that the economy will have shrunk from April to June and will continue to do so in the following quarter, while putting the likelihood of a no-deal exit from the EU at 40%. NIESR forecasts GDP fell by 0.1% in Q2, with a 25% chance that GDP declines again between July and September. However, the think-tank’s central forecast is for growth of 0.2% in Q3. NIESR has cut its forecasts for economic growth in 2019 and 2020 to 1.2% and 1.1%, down from 1.4% and 1.6% previously.