BANKING
Regulators asked to stop Co-op takeover
The Financial Conduct Authority and the Bank of England's Prudential Regulation Authority are being urged to block the takeover of Co-op Bank by private equity firm Cerberus. The Mail notes that Cerberus has snapped up billions of pounds of UK loans in cut-price deals since the financial crisis, but since it does not have a banking licence and so cannot switch customers onto a better deal, borrowers are stuck paying interest rates of up to 10%. Rachel Neale, who runs the UK Mortgage Prisoners campaign group, said: “The regulators cannot allow a sale of the Co-op Bank to this company - it wrecks lives and is a cancer on our financial sector. The Co-op Bank should be running for the hills.” But the FT’s Patrick Jenkins says a “knee-jerk resistance to private equity would be short-sighted” - the long-term backing of a private equity buyer would be better than “the short-term interests of a posse of opportunist hedge funds”.
NS&I rate cuts fail to deter savers
Over 50% of National Savings & Investments customers plan to remain with the Treasury agency despite an announcement that drastic cuts will be made to its savings accounts this week. Laith Khalaf of AJ Bell remarked: “Millions of savers could be in for a nasty shock when they wake up and smell the swingeing rate cuts applied to their cash. While Premium Bonds still look competitive, around £25bn of savings will now attract virtually nil interest.”
INTERNATIONAL
Crédit Agricole/Creval: cross fit
The FT’s Lex says Crédit Agricole’s €737m all-cash offer for Italian lender Credito Valtellinese is a cautious move and not the sort of bold deal the European banking market was hoping for.
Pandemic gives French fintechs the chance to prove their worth
The COVID-19 pandemic has not slowed down funding for French fintechs, the FT reports, and many were used by the government to funnel rescue cash to other sectors.
AUTOMOTIVE
AA private equity takeover offer ‘acceptable’
Private equity groups Warburg Pincus and Towerbrook Capital Partners have been told by the AA that it would be willing to accept a proposed 35p-a-share offer, with the companies to invest an additional £380m to help reduce the roadside assistance group’s debt pile of £2.6bn. The AA made £107m in pre-tax profits in the year to 31 January.
Autonomous vehicle start-up announces new backing
Driverless car start-up Wayve Technologies has secured investment from Virgin Group, with chief executive Alex Kendall stating that the firm’s technology uses AI to teach vehicles to drive like a human.
AVIATION
Qantas chief executive outlines vaccine plans
Alan Joyce, chief executive of Australian airline Qantas, has said in an interview that "We are looking at changing our terms and conditions to say, for international travellers, we will ask people to have a vaccination before they can get on the aircraft. Whether you need that domestically, we will have to see what happens with COVID-19 and the market, but certainly for international passengers coming in and leaving the country, we think that's a necessity." This comes as shares in airlines around the world rise in recent weeks, with British Airways owner IAG’s share price up by almost 75%.
Airline shares soar as ministers prepare to slash quarantine
Airline and travel shares surged yesterday ahead of an expected announcement that the coronavirus quarantine period for UK arrivals will be cut from 14 days to just five, providing travellers test negative on day five. Transport Secretary Grant Shapps tells the Telegraph this could be the first step towards replacing quarantine entirely with rapid flow daily tests.
FINANCIAL SERVICES
Aviva sells holding in Italian insurer
Aviva is selling its 80% stake in Italian life insurance business Aviva Vita to UBI Banca for €400m as it moves to pare back its international operations. Amanda Blanc, who took over as chief executive in July, pledged to focus on the group's British, Irish and Canadian operations and to sell underperforming businesses.
Zilch secures licence from FCA
The Financial Conduct Authority (FCA) has approved Buy Now Pay Later (BNPL) firm Zilch. This comes as the sector sees considerable growth, with increased use of the internet for shopping and working amid the coronavirus pandemic believed to be responsible. Rival Swedish fintech Klarna was valued at $11bn earlier in the year.
Lloyds start-up Inigo raises $800m
Lloyd's of London insurer Inigo has raised $800m from investors including the Qatar Investment Authority and Caisse de dépôt et placement du Québec, the Canadian pension fund. The newly formed company, founded by three former Hiscox executives, has also hired Sir Howard Davies, chairman of NatWest, as its chairman.
Blackmore Bond investors warned legal action needed to recover funds
Investors in Blackmore Bond have been told they would receive no money back from the £46.8m total they put into the minibond firm, which collapsed into administration earlier this year after failing to make dividend payments.
Currency broker fined after posting fake trades
The Financial Conduct Authority has fined currency broker TFS-Icap £3.4m for posting fake trades in an attempt to drum up business. The watchdog said the firm had committed serious breaches of its business principles and had undermined market integrity by “printing” trades.
HEALTHCARE
AstraZeneca shares fall after vaccine’s efficacy ratings announced
Shares in AstraZeneca fell nearly 4% yesterday after the drugmaker announced that the COVID-19 vaccine it had developed with Oxford University had a lower efficacy rate than rival jabs from Pfizer and Moderna, which both confirmed their vaccines were 95% effective in the past week. Overall efficacy from the AstraZeneca trials in the UK and Brazil was 70%, but the vaccine worked better in people given a lower first dose. Those who got a half dose, followed four weeks later by a full dose, enjoyed 90% protection, while efficacy among those who had two full doses was 62%.
LEISURE & HOSPITALITY
Cineworld announces new investment
Cineworld has raised over £550m from investors and banks, securing a new debt facility of $450m and agreeing bank covenant waivers until June 2022. Analyst James Wheatcroft at Jefferies said: “With vaccines on the horizon and liquidity secured, we think Cineworld is now well placed in reopening.”
MEDIA & ENTERTAINMENT
Publishers report pandemic effects on results
Pre-tax profits at Daily Mail and General Trust (DMGT) were down to £72m for the year to September, with revenues falling 14% to £1.2bn, while revenue at i newspaper was down to £27m for the 10 months since the title was acquired from JPIMedia. DMGT chief executive Paul Zwillenberg commented: "The pandemic has brought significant disruption and change to our markets but the strategic and financial actions we have taken have ensured that we coped well and remained on the front foot.”
Video game developer reports first-half sales record
Video game developer Codemasters has reported first half sales of a record £80.5m, with the UK firm’s chief executive Frank Sagnier remarking: “The long-term structural growth drivers in our sector remain strong with the launch of the next generation consoles, the accelerated shift to digital sales and services, and the roll out of 5G all likely to drive more opportunity for greater engagement with our audiences.”
Vodafone to go carbon neutral sooner than planned
Vodafone has pledged to eliminate all carbon emissions from its business activities, with all the firm’s energy to be obtained from renewable sources within the next two decades.
PROFESSIONAL SERVICES
Recruitment firm improves yearly guidance
Recruitment firm SThree expects annual profit to be slightly above expectations, with shares up 2.8% in early trading following the announcement.
SPORT
Tottenham Hotspur annual loss confirmed
Tottenham Hotspur chairman Daniel Levy has announced losses of £63.9m for the year ending June 30, 2020, while welcoming the return of spectators to football grounds. The team’s revenue was down to £402.4m from £460.7m in the year-earlier period.
ECONOMY
Haldane: Vaccine success boosts UK economic outlook
In evidence to the House of Commons Treasury select committee on Monday, the Bank of England’s chief economist Andy Haldane said news of three successful coronavirus vaccine trials meant the UK’s economic outlook was brighter than the Bank’s forecast earlier this month. However, he warned against the public dropping its guard triggering a third wave of COVID-19. Also speaking with MPs on the Committee, the Bank’s governor Andrew Bailey said the economic cost of a no-deal Brexit would have a greater long-term impact than the damage caused by the pandemic. Models suggested the longer-term consequences were due to the time required to adjust to a new trading relationship, he added. Meanwhile, IHS Markit’s purchasing managers’ index fell to 45.8 in November from 51.4 the previous month, the lowest level since May.
Vaccine rollout promises boost to global economy
The global economy could be boosted to the tune of $800bn following the rollout of COVID-19 vaccines, according to analysts. Working on the assumption that 35% of the population gets vaccinated, UBS estimates global GDP growth could be 6.3% next year and 5.3% in 2022, an average increase of one percentage point per year. This would be equivalent to more than $800bn of additional GDP growth in 2021 alone, with the same again in 2022, compared with previous predictions. UK growth next year could rise to 5.8%, up from 5% previously forecast, predicts UBS economist Anna Titareva. “Predominantly the impact is going to come via sectors such as hospitality and accommodation,” she said, as well as retail, as these industries “involve a lot of social interactions”.