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Daily News Roundup: Tuesday, 24th April 2018

Posted: 24th April 2018


System outage could prove costly for TSB

TSB’s IT system upgrade over the weekend left many customers unable to access online and mobile banking services on Monday, with some claiming when they did log in they were able to access other people’s money. The Financial Conduct Authority and the Information Commissioner's Office (ICO) said they were monitoring the situation, and could fine TSB for a system failure or data breach. A TSB spokesman said the specific access issues related to seeing multiple accounts "lasted only about 20 minutes and impacted just a tiny fraction of our customer base and were fixed last night".

City regulators fail first SMR test

Patrick Hosking writes in the Times that regulators’ failure to find Barclays chief Jes Staley unfit to run one of Britain’s biggest banks following his pursuit of a whistleblower was a missed opportunity to demonstrate that breaking Senior Managers Regime rules would have serious consequences.

Libor transition urged for firms

The FT warns that firms should start to prepare for the transition of outstanding Libor contracts to a new benchmark rate, saying the reference rate is “on its last legs”.

Banks aim to secure London jobs with back-to-back trading

London-based investment banks are hoping the ECB will allow the use of "back-to-back" trades - allowing EU sales before the risk is transferred to the UK through an internal trade.

Concerns raised with MSPs over branch closures

The impact of bank branch closures was discussed at a private meeting of the Scottish Parliament's economy, jobs and fair work committee. Turriff councillor Alastair Forsyth, a former Royal Bank of Scotland banker, is protesting against proposed closure of the town’s branch.


Private equity concerns for UK economy

New research from Lloyds Banking Group has found that 57% of senior UK private equity professionals have concerns that economic growth in Britain will be weaker in 2018 than in any other G7 country. Lloyds' Stephen Quinn commented: “The UK's private equity community is finely tuned to the impact of the nation's economic prospects on their investments, so it's telling that fears over the uncertainty caused by Brexit is topping their list of concerns as we edge closer to March 2019”. However, some 82% thought Britain will remain Europe's most prominent financial centre even after it leaves the EU.


Wells Fargo employees unimpressed by CEO’s pay

Over a dozen Wells Fargo employees have posted criticism of CEO Tim Sloan’s pay on an internal site following reports he earned $17.6m for 2017. According to the bank’s proxy filing, Sloan took home an estimated 291 times the median of the annual total compensation of all the bank’s workers. Proxy advisers Institutional Shareholder Services and Glass Lewis recommend investors cast non-binding advisory votes in favour of the compensation of Sloan and other Wells Fargo executives. Meanwhile, Patrick Jenkins in the FT notes how pay for CEOs at top US banks is falling without the sort of pressure to reduce them their counterparts in the UK face.

HNA reduces Deutsche Bank stake further

HNA has reduced its stake in Deutsche Bank, raising doubts over whether the company will maintain its holding in the German bank.

Investment bank propels UBS to best quarterly result in 3 years

UBS has announced its highest quarterly profit in three years with a 17% rise in group pre-tax profits to SFr1.97bn ($2bn) for the first quarter of 2018.

AIB debt book revised

Allied Irish Bank has revised the size of its debt book, stripping back its biggest-ever loan sale. It is now likely to contain €1.6bn worth of debt rather than the €3.75bn previously reported.


Air France strikes to affect UK airports

British airports including Heathrow, Manchester, Birmingham and Edinburgh will all face disruption from ongoing Air France strikes, with just 28% of its pilots, 19.6% of cabin crew and 13% of ground staff at work today. The airline issued a statement saying: “Air France regrets this ongoing strike action at a time when company management has made several proposals to end the conflict and has announced the launch of a consultation with all staff on the agreement proposed on 16 April”.


Britain positive on financial services Brexit deal

Hopes that Europe will offer financial firms generous post-Brexit market access are rising among the British government and senior finance executives. City minister John Glen commented at the City Week conference in London’s Guildhall: “The fog is clearing... we are already seeing progress”, with the EU now acknowledging that some form of market access in financial services will exist. This follows a previous indication from EU states and the European Parliament that any deal must not allow financial firms to operate freely in each other’s markets. Former City minister Mark Hoban commented: “Some of the views from member states who are more economically liberal, more outward looking, who regret most our departure, are much more pragmatic about our future relationship. The sands are shifting over time”. International Trade Secretary Liam Fox claimed at the conference that a post-Brexit Britain will be in a position to lead a global drive for greater free trade in financial services, while Lord Blackwell, the chairman of Lloyds Banking Group, said access to EU markets is “not life and death” for Britain’s financial services sector.

Unsustainable firms to be named and shamed by L&G

Legal & General Investment Management will give up billions of pounds of investment in shares of firms which behave unsustainably, with a "climate change pledge". Helena Morrissey, the company's head of personal investing, told the City Week conference: “The reason we are shaming 'the worst performers' is that we gave them a number of years and they did not take any notice. There comes a time when we should vote with our feet. We will be divesting from those companies.”

Increase in City job vacancies

Financial services employers noted a strong increase in the number of positions available on offer, according to analysis of figures from recruiters by Staffing Industry Analysts. The number of permanent City job vacancies increased by 11% year-on-year in March, with pay levels falling by 1.8% in the same period.

Deadline announced for Fidessa bid

SS&C Technologies has been given until 5pm on May 4th by the Takeover Panel to make an offer for Fidessa.


Sportech scores Dutch monopoly sale

London-listed betting firm Sportech, former owner of the Football Pools, has agreed to sell its Dutch betting monopoly to RBP Luxembourg for €3.3m (£2.9m) later this year.


Capita to raise £700m as losses grow

Capita has said it will look to raise £701m through a rights issue after reporting an annual loss of £513m. Profits were derailed by £850m of one-off costs, mainly from writing down the value of acquisitions made under its previous management. Under its new strategy, Capita plans to raise about £300m disposals this year and is targeting cost savings of £175m by the end of 2020. Commenting on Capita's future, CEO Jonathan Lewis said the business was "fundamentally strong" but "needs to evolve". He added: "We need to simplify Capita by focusing on growth markets and to improve our cost competitiveness. We need to strengthen Capita and plan to invest up to £500m in our infrastructure, technology and people over the next three years."


KKR to make Mayfair new HQ

London landlord Great Portland Estates has lured KKR to Hanover Square, marking the biggest single deal in Mayfair for a decade. The private equity firm is taking 57,000 sq ft of space in GPE’s new offices, being built over the eastern entrance to Crossrail’s new Bond Street station.


Western Union tie-up with Debenhams

Global money transfers are to be offered by Debenhams via its existing travel money kiosks, in a new deal with Western Union, which already has a presence in retail rivals John Lewis, Sainsbury's and Ryman.

Carpetright stake increased by Meditor Capital Management

Meditor Capital Management has increased its stake in Carpetright from 16.47% to 29.99%. At 30% it would have to make a takeover offer. Carpetright shares decreased 6.8% to 34½p.


Brexit pressures increase on sterling

Yesterday saw the pound fall to a five-week low against the dollar. Rebecca O’Keeffe, head of investment at Interactive Investor, commented: “With UK economic growth lagging behind all other major economies, and the path of Brexit once more looking distinctly rocky, sterling’s recent strength is in danger of reversing sharply, particularly if Prime Minister May’s position comes under further pressure”.

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