Barclays to replace Jes Staley
Jes Staley is set to leave Barclays by the end of next year and possibly at the bank’s AGM in May 2021, according to reports, with the bank now preparing to begin a search for his replacement. Sources at the lender denied there is a link between the investigation into Staley’s links to Jeffrey Epstein and its search for a new boss, but the probe is said to have focused minds on the bank’s board. The FT suggests Barclays’ commitment to full service investment banking may be harder after Staley leaves, adding that the regulator should have nudged him out after he twice tried to identify a whistleblower. The Telegraph’s Ben Marlow says having Staley hanging around for 15 months would be bad for morale and chairman Nigel Higgins should replace him swiftly.
UK retail banking rules will prove a challenge JPMorgan
Jim Armitage says in the Standard that JPMorgan’s move into the UK retail banking market will be good for consumers, but the US banking giant will find UK retail banking regulations make it difficult to challenge the incumbent Big Four – namely ringfencing rules, which Armitage suggests may be forcing well-funded challengers to be less competitive. Elsewhere, the Times’ Katherine Griffiths thinks JPMorgan’s entry into the UK market could be a decisive moment for competition in the sector.
Revolut raises $500m in long-awaited funding round
UK fintech Revolut has raised $500m in a funding round which values the company at around £5.5bn. Led by venture capital group TCV, the raise makes Revolut one of the most valuable fintech groups in Europe. Revolut said it increased customer growth by 169% in 2019, while the number of daily active users rose 380%. Its 2018 accounts showed revenue growth of 354% to £58.2m, and a loss of £32.8m.
Haldane urges governance rethink
Andy Haldane, the Bank of England’s chief economist, has suggested the UK expands its corporate governance rules to include not just shareholders but other stakeholders too. Speaking at a Centre for Policy Studies, Mr Haldane also put forward the idea that regional, development and infrastructure banks could help re-balance finance towards SMEs across Britain.
Tucker’s HSBC is turning from teaser of bankers to teased bank
The FT’s Lombard suggests HSBC is dragging out the decision over who should be its next chief executive for too long and subsequently is making the position look less attractive.
The UK should diverge on domestic financial services
Lloyds Banking Group chairman Norman Blackwell says in the FT that post-Brexit the UK should revisit inherited EU rules to help the financial services sector adapt to new technology.
Blackstone brings infrastructure fund to London
The US private equity giant Blackstone Group is setting up a 10-person team in London to focus on infrastructure investments in the UK and Europe. Its Blackstone Infrastructure Partners fund has a $14bn war chest with hopes to raise as much as $40bn. The firm yesterday said it had hired Jon Kelly, who was head of Europe at rival private equity giant Brookfield, to run the unit.
Goldman Sachs pleads not guilty to 1MDB charges
Goldman Sachs pleaded not guilty in a Malaysian court yesterday to charges of misleading investors in connection with $6.5bn (£5bn) in bond sales that the bank helped state fund 1MDB raise. Goldman Sachs has denied wrongdoing, saying that members of the former Malaysian government and 1MDB lied to it about how the money from the bond sales would be used.
Mid-market M&A gets smaller
The FT reports that more than a quarter of fees charged by Wall Street's biggest banks for M&A in 2019 came from transactions under $1bn.
Savers warned about retirement poverty
The Association of British Insurers (ABI) is warning that middle-aged savers risk poverty in retirement because they are drawing on their pensions too early. The pension freedoms introduced in April 2015 allow people to cash in their entire pension from the age of 55 or take it in regular instalments. The ABI says the number of savers cashing in their entire pension in 2018/19 was 355,000, the highest since the freedoms were introduced, while four in ten flexible income withdrawals were at an “unsustainable annual rate” of 8% and over. The ABI is also calling for a review of the Financial Conduct Authority’s rules on financial advice arguing that Brexit provides the UK with an opportunity to move away from the EU’s restrictive regulations.
Financial firms quarantine staff returning from China
Goldman Sachs and Standard Chartered have told London-based staff returning from China to stay at home as the City fights to prevent an outbreak of the coronavirus. Goldman has reportedly told staff to “self-isolate” and work from home for up to 14 days after returning from the worst-affected regions. Standard Chartered has instructed workers living with anyone who has recently returned from mainland China to stay away from the office. Firms have also stepped up disinfecting and deep cleaning in offices. Hand sanitisers have been made available in buildings across the City and Canary Wharf.
FMSB on alert for misconduct
Martin Pluves, chief executive of the FICC Markets Standards Board (FMSB), writes in City AM on the importance of “ensuring that markets are transparent, fair and effective for all participants”. In its latest annual report, the FMSB outlines the progress made to enhance standards of behaviour but Mr Pluves says the FMSB must be continuously alert to future risks, especially from “cryptocurrency, artificial intelligence, and more sophisticated use of algorithms and machine learning.”
Loeb calls for Prudential break-up
The activist investor Daniel Loeb has called for Prudential to separate its US and Asian business and dissolve the insurer's UK head office, claiming shares could triple in value if it followed the strategy. Loeb leads the US hedge fund Third Point and has built up a $2bn stake in Prudential.
Shetty pledged shares for $250m loan
NMC Health founder Bavaguthu Raghuram Shetty pledged seven million shares in the private hospitals company to Goldman Sachs in return for a $250m loan, NMC has disclosed following a review of Mr Shetty's holdings. Uncertainty over the firm’s controlling shareholders emerged after Muddy Waters raised concerns about NMC's accounting and governance. The Times’ Patrick Hosking says London does itself no favours by entertaining foreign companies from “immature or corrupt economies” seeking to tap the capital’s market. “Markets ultimately succeed by enforcing high standards, not lowering them.”
GlaxoSmithKline agrees to sell drug brands
GlaxoSmithKline has agreed to sell over a dozen medicine brands to German firm Stada in what was reportedly a €300m (£250m) deal.
Hong Kong firm backs Cambridge Satchels
The Cambridge Satchel Company has secured new investment from Hong Kong-based private equity firm Cassia Investments. Cassia founder Faris Ayoub, now a director at the bagmaker, says the brand has “an aspirational appeal to consumers globally.”
MEDIA & ENTERTAINMENT
Reach embarks on data push to counter falling sales
Reach, the publisher of the Daily Mirror and Daily Express, is looking to boost its number of registered readers to 7m by 2022, up from 1m at the end of last year, by persuading them to part with more data in exchange for access to aggregated material from across its range of titles. The group has 47m readers and gaining data from more of them will prove valuable as print advertising revenue falls.
Countrywide and LSL merger talks confirmed
Countrywide, which is behind High Street brands such as Bairstow Eves and Hamptons International, is in merger talks with smaller rival LSL Property Services, which has businesses such as Marsh & Parsons and Your Move, to create the UK’s largest estate agency business. The “possible all-share combination” would value the combined groups at around £470m. Noting that the big name estate agency group last turned a profit in 2016, Cat Rutter Pooley in the FT suggests that Countrywide needs more than a merger to recover its fortunes: "It needs to turn back time," she says.
Shopify joins Facebook’s Libra currency association
Shopify has announced it will join the Libra Association, the cryptocurrency collective launched by Facebook, and will contribute $10m to become part of the initiative to use blockchain technology to enable swift, low-cost international payments online.
Global stock markets plunge as coronavirus panic sets in
A rise in coronavirus cases in Iran, South Korea and Italy sparked a sell-off in the US and Europe yesterday with investors shifting from equities to safe havens such as gold and bonds. US stocks had their worst day in two years with the S&P 500 falling by 3.4%; the Nasdaq Composite by 3.7% while the Dow Jones Industrial Average closed the day 3.6% lower. Transport stocks were among the worst performers. UK stocks had their worst day for five years with the FTSE 100 ending the day 3.3% lower while the Stoxx 600 fell 3.8%. EasyJet shares fell 17% and Ryanair were down 13%. Italy’s MIB index dropped 5.4%. The price of oil slumped to just over $55 a barrel with traders concerned that a global pandemic will cripple travel and trade.
Financial transparency pays off for all
Thom Townsend, the executive director of OpenOwnership, writes in City AM on how anonymous companies are central to 70% of grand corruption cases – where politicians or their associations misappropriate and use public funds for their personal benefit. Mr Townsend says things are gradually changing with more countries now following the UK’s lead and disclosing beneficial ownership data online. But not only does greater transparency help fight corruption, says Townsend, but also “helps build business and market confidence, improves governance, and tackles corrupt and criminal activities.”