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Daily News Roundup: Tuesday 23rd October 2018

Posted: 23rd October 2018


Tribunals not the answer to bank disputes
An independent review has concluded that the Financial Ombudsman Service should be overhauled to give it stronger powers to help SMEs that are wronged by their banks. However, the report by Simon Walker, former head of the Institute of Directors, also warned the Government against adopting proposals for a new tribunal system to help small companies resolve disputes with lenders. Mr Walker said a tribunal system would be “expensive for government and for participants” and might do little to address an inherent imbalance in power between small businesses and banks.

SFO seeks charges against Barclays 
The Serious Fraud Office (SFO) has called for criminal charges against Barclays related to its capital raising arrangements to be reinstated. The bank and four former executives had been charged with conspiracy to commit fraud and the provision of unlawful financial assistance in relation to a deal with investors Qatar Holding and Challenger Universal in June and October 2008, with the case against the bank thrown out by the Crown Court in May this year. The SFO has made an application to the High Court in a bid to reinstate all dismissed charges, and arguments will be heard in the High Court this week. 

Natwest reveals new fintech accelerators
Natwest is to launch new fintech accelerators in London, Manchester, Bristol and Edinburgh in April, with the hope of supporting up to 80 fintech firms with a technology mentor and access to government contacts. As partners on the project Dell will offer IT advice, while law firm Pinsent Masons will offer participants legal advice.

Profits climb at BBI
British Business Investments, which invests in challenger banks, non-bank lenders and venture and growth capital funds, saw pre-tax profit hit £67.9m last year - a 23% increase on the previous tax year. The number of businesses it supported rose by 51% to 27,000 over the year to the end of March. Chairman Keith Morgan said: “As a wholly-owned subsidiary of the British Business Bank, British Business Investments plays a key role in helping achieve the group's overall objectives - increasing the size and diversity of finance markets and producing positive returns on UK taxpayers' investments."

HSBC gets back into US consumer lending
HSBC is to launch a digital lending platform for US customers, with the platform to be powered by online lender Avant and launched in the first half of 2019.

RBS diverts £2bn to help SMEs handle Brexit
RBS has set aside £2bn in funding to help around 2,000 small businesses that rely on EU labour markets or exposure to foreign exchange deal with Brexit. 

Diversity accreditation for Leeds BS
Leeds Building Society has been given a Leaders in Diversity accreditation from the National Centre for Diversity.

TSB apologies over outage
TSB has apologised after its online banking service suffered a temporary outage yesterday.


Cerberus accused over Northern Rock
Cerberus has been accused of misleading the Government on a deal to acquire £13bn worth of mortgages from Northern Rock. The BBC's Panorama says that while Cerberus said it would transform itself into a challenger bank and offer mortgage customers better deals, it has not been authorised by the Financial Conduct Authority to offer mortgages to customers almost three years on from the pitch. Cerberus said it “categorically rejects the false and misleading allegations.”

Private equity piles into Europe’s life insurers
The FT looks at private equity investment in life insurance, saying that the list of buyout groups looking to the sector “reads like a Who's Who of global private equity.”

Interactive Investor buys Alliance Trust Savings
Interactive Investor is to buy rival Alliance Trust Savings in a £40m deal that will create a platform with 400,000 customers that looks after £35bn.


Goldman pushes further onto Main Street with services plan
Goldman Sachs has announced that it will merge consumer bank Marcus with its investment management unit, with chief executive David Solomon and president John Waldron saying this would see a "broader wealth management offering.”

UBS calls time on past misdemeanours with push to lure rich American expats
UBS chief executive Sergio Ermotti will this week outline plans to revamp the bank, with it suggested this will include greater emphasis on attracting ultra-high net worth clients and family offices.

Monte dei Paschi gauges demand for expensive debt issue if regulators act
Banca Monte dei Paschi di Siena used meetings arranged by JPMorgan to sound out investors over possible buyers for new debt, the FT reports.

MEPs to grill frontrunner for top EU banking role
MEPs are set to question those looking to succeed Danièle Nouy as chief of the Single Supervisory Mechanism, including Ireland's central bank deputy Sharon Donnery.


Major car parts manufacturer to be created
Fiat is to sell its car parts business Magneti Marelli to US private equity firm KKR-backed Calsonic Kansei for €6.2bn, creating the world's seventh largest automotive components manufacturer. The deal will give KKR a business with almost 200 facilities and research and development centres in Europe, Japan, the Americas and Asia Pacific region.


Ryanair weathers recent turbulence
Ryanair's revenue rose 8% to €4.8bn over the six months to September 30, with passenger numbers up 6%. The low cost carrier reported a 7% fall in half-year profits, to €1.2bn (£1.1bn). Blaming higher fuel prices and the recent industrial action, which increased compensation costs, boss Michael O’Leary also highlighted the impact of significantly higher oil prices, unforeseen security events, air traffic control and other strikes, along with the impact of negative Brexit developments, as potential pitfalls ahead.


Shareholders warn Crest Nicholson is ‘takeover target’
A top investor of Crest Nicholson has said it was likely to find itself amidst a takeover bid, as the company’s share price fell to historic lows following a series of profit warnings and fears of how ongoing Brexit uncertainty could affect the housing market. Alistair Gunn of Jupiter Asset Management – a 2.6% stakeholder in Crest Nicholson has warned: “For anybody who is underweight in London and the south-east, Crest is a big opportunity”.


Banking heavyweights back robo-adviser Pia
Former finance heavyweights from Barclays, HSBC and Coutts are among those behind new robo-advisor start-up Pia, which seeks to help retail investors. Pia, an online "personal investment assistant", uses artificial intelligence to create a virtual assistant, which can help consumers understand and choose investment products and services - ranging from share trading platforms to online wealth managers and crowdfunders. The app is due to launch this autumn.

PayPal in fintech investment
PayPal has made an undisclosed strategic investment in financial technology start-up Tala, a firm which lends to consumers in emerging markets.

Lendy faces crunch as peer-to-peer lender asks regulator for help  
British peer-to-peer property lender Lendy has appealed to the Financial Conduct Authority for help after almost two-thirds of its investors failed to repay their loans on time.

HMRC changes to hit pensioners
Hundreds of thousands of pensioners could get less than they are due from the end of this month, according to financial consultancy Willis Towers Watson. The firm warned that after October 31 company pension schemes will not be able to easily check with HMRC that they have the correct information to pay pensioners the right income - affecting both state and final salary employer pensions.


Vue buys Cinestar 
Vue has entered into a deal to buy Event Hospitality & Entertainment's German cinema division Cinestar for up to €221.8m. The deal is Vue's largest ever acquisition and the cinema chain's third acquisition this year following deals to snap up Cinema3D in Poland and Showtime Cinemas in Ireland.


No-deal Brexit will 'wreck' British manufacturing
Frans van Houten, chief executive of Philips, has warned that a hard Brexit could "wreck" Britain’s future as a manufacturing hub. Quizzed on the increasing likelihood of a potential no-deal Brexit, he suggested that the firm would need to rethink its UK manufacturing footprint if that happened. Philips posted sales of €4.3bn (£3.8bn) for its third quarter, up 4% on the same period a year ago.


Court rejects Morrisons appeal
The Court of Appeal has ruled that Morrisons is legally liable for a former employee leaking the personal information of around 100,000 staff members. In the first data leak class action in the UK, over 5,000 Morrisons staff brought a claim against their employer for damages after auditor Andrew Skelton, who was jailed for eight years for the offence in 2015, leaked their personal data, including salary and bank details, online and to newspapers. The retailer may now face a compensation bill running into millions of pounds. 


Sluggish wage growth hits household confidence
Confidence among British households over their finances hit a three-month low as wages rose at their most sluggish rate since February. IHS Markit found that a “pessimistic tilt” helped to suppress confidence from 45.7 in September to 45.1 in October.


Dividends could hit £100bn 
Total dividends paid out by UK-listed firms rose 4.1% in the third quarter to hit a record £32.3bn, according to Link Asset Services, which also said underlying payouts, which don't include special dividends, increased by 6.9% to £31.6bn, and that UK dividends will come close to hitting the £100bn mark this year. Mining firms made up the largest share of dividends, with a 41% increase year on year. Justin Cooper, chief executive of Link Market Services, noted: “Banking dividends are moving up a gear, just as the roaring engine of mining dividends is getting set to slip back to neutral.”

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