Banks undertake record recruitment drive
Vacancies in the banking sector leapt 129% between 2020 and 2021, a new report reveals, driven by Wall Street banking giants JPMorgan and Citi which created over 9,000 roles between them. Commentators said the figures show Brexit did not usher in the dramatic movement of finance professionals away from the UK as many previously thought. UK Finance said: “The UK’s banking and finance sector is one of the country’s most important. The sector provides high-quality jobs, pays significant amounts of tax and drives investment across other parts of the economy. Firms are continuing to invest and expand their operations, both here in London as well as in other cities up and down the country.”
Tory minister resigns over Covid fraud debacle
Lord Agnew of Oulton has resigned as a minister to the Treasury and Cabinet Office citing the Government’s “lamentable” record on tackling COVID business loan fraud. Speaking in the House of Lords chamber on Monday, Lord Agnew said the Treasury "appears to have no knowledge or little interest in the consequences of fraud to our economy or our society", adding that a mix of "arrogance, indolence and ignorance freezes the government machine". More than £47bn was given to small businesses under the bounce back loan scheme and the Government has already written off £4.3bn of this. "Total fraud loss across government is estimated at £29bn a year,” Lord Agnew added before stating that if the Government took fraud seriously it could afford to cut income tax by 1p.
JPMorgan asset arm launches PE team for sustainable investments
JPMorgan Chase & Co's asset management arm has created a new private equity team to focus on sustainable investments. The team will target growth-stage private companies that build solutions related to climate adaptation and resource efficiency for various industries.
Private equity buys into Eden Mill
Private equity firm Inverleith has taken a majority stake in Scottish gin, beer and whisky maker Eden Mill St Andrews. Paul Skipworth, Inverleith’s managing partner and a former chief executive of Glenmorangie, said: “This is a fantastic addition to Inverleith’s portfolio of premium consumer brands.”
KKR snaps up Raleigh owner Accell
KKR has taken over European bicycle giant Accell in a £1.3bn deal. Accell owns Raleigh bicycles in the UK, Canada and US and enjoyed a 17% sales jump in 2020.
EU to disclose ESG data from 2024
The European Banking Authority (EBA) on Monday set out ESG templates for the top 150 banks to complete each year. Pilar Gutierrez, head of a disclosures unit at the EBA said that from 2024, investors will be able to compare each bank's exposure to polluting and environmentally-friendly companies and monitor how fast lenders shift to more sustainable business models.
Deutsche Bank expected to report loss in fourth quarter
Deutsche Bank’s fourth-quarter earnings are expected to show a net loss on Thursday, amid a slowdown in revenue at its investment bank. The bank is expected to report a net loss of around €130m, compared with a profit of €51m a year earlier.
Boeing pumps extra cash into self-flying air taxi start-up
Boeing has said it will invest an extra $450m in California-based Wisk Aero, its joint venture focused on developing self-flying air taxis.
Gilbert closes in on deal to acquire River and Mercantile
AssetCo, which is headed by Martin Gilbert, is closing in on a deal to take control of River and Mercantile Group (R&M). Mr Gilbert has been in talks to buy the business for about two months, and until recently was competing against Premier Miton, another listed fund manager. If completed, it would be the latest - and largest - in a string of swoops by AssetCo since Mr Gilbert agreed a deal to use it as a consolidation vehicle last year. R&M has more than £4bn under management in its asset management operation.
Gensler maps out potential overhaul to agency's cyber rules
The Securities and Exchange Commission is looking at ways to reduce the economic impact of cyberattacks and improve the resiliency of the financial sector. SEC chairman Gary Gensler said the agency is considering extending a rule known as Regulation Systems Compliance and Integrity, or Reg SCI, to large financial firms it doesn't currently cover, such as market makers and broker-dealers.
M&G launches new sustainable fund
M&G has launched a Diversity and Inclusion Fund, to be managed by Thembeka Stemela Dagbo. The new fund will focus on addressing social inequality, notably gender and ethnic diversity, as it expands its range of sustainable funds.
LEISURE & HOSPITALITY
Activist investor urges Peloton to fire chief
Blackwells Capital has demanded the resignation of Peloton founder and CEO John Foley following the collapse in the exercise bike maker's share price. The activist investor owns a stake of less than 5% in the company. In a letter to Peloton's directors, Blackwells' chief investment officer Jason Aintabi cited Foley’s “repeated failures” in leadership, including misleading investors that the company did not need additional capital, just weeks before issuing $1bn of equity; “vacillating on pricing strategy”; and failing to ensure that the firm had effective internal controls over financial reporting, leading to a warning from auditors.
Unilever announces job cuts after Peltz stake revealed
Unilever shares rose by 7% on reports that New York-based activist investor Nelson Peltz had built a stake in the company. Peltz recently oversaw a turnaround in fortunes at consumer goods giant Procter & Gamble. Following the news, Unilever announced plans to slash thousands of management positions across its operations, according to Bloomberg. Trian Partners is building an unspecified stake in the consumer goods giant whose strategy is under scrutiny after a short-lived pursuit of GSK's consumer healthcare arm.
Abrdn and Citi looking at real estate tokenisation
UK asset manager abrdn is working with Citigroup on how to widen access to investments in real assets using blockchain technology, known as tokenisation. Neil Meikle, the firm’s global head of real estate product strategy, said that there was an opportunity to “democratise” real estate investment and that abrdn has held informal talks with the Financial Conduct Authority about broadening the application of tokenisation.
Dividend payments rose by over 46% last year
UK dividend payouts rose by 46.1% in 2021 from the previous year to total of £94.1bn, the best in nearly five years. One-off special dividends boosted the headline total by a record £16.9bn, according to Link Group’s latest Dividend Monitor, three times their normal level. Link expects underlying growth in dividends of 5% for 2022, bringing total payouts to £81bn. However, headline dividends will fall 7% to £87.5bn as special payouts are forecast to be much lower. Ian Stokes, Link Group’s managing director, corporate markets UK and Europe, said: “The recovery in UK dividends is not complete but the easiest part of the catch-up is now behind us. 2022 faces a number of headwinds in the form of Omicron disruption, inflation and tax hikes and that adds uncertainty to our forecast.”
Omicron held back recovery in January
Economic growth slowed to an 11-month low in January as Omicron continued to weigh on demand. The IHS Markit/CIPS composite PMI fell to 53.4, down from 53.6 in December, marking the index’s third consecutive month of decline and its lowest level since February 2021. Hospitality, leisure and travel services all struggled to attract customers due to Covid restrictions, offsetting a rise in output among financial services firms. Manufacturing was less hard hit, with factories reporting a slowdown in input prices thanks to some easing of supply chain disruptions and a reduction in the cost of raw materials. Analysts indicate that the hangover from Omicron will be short-lived, and GDP will recover fairly rapidly over the rest of the first quarter.
UK ‘overstretched’ and ‘outgunned’ in economic crime fight, says report
Anti-graft charity Spotlight on Corruption says the UK Government is being “outgunned” by criminals with just £852m spent each year fighting economic crime compared with nearly £300bn lost to fraud and money laundering.