Labour to launch ‘shadow banking’ inquiry
Labour is launching an inquiry into “shadow banking” as part of a wider crackdown on investment that fuels industries contributing to climate change. Shadow chancellor John McDonnell said the review would cover commercial banks, investment banks, pension funds, hedge funds, private equity, asset managers, derivatives and securities traders and exchanges. Mr McDonnell said: “I am setting up a review group to overview the financial system as it currently relates to the climate emergency, in terms of both where and how it is causing or exacerbating the problem of climate change and where and how it could be providing solutions to problems.” He also repeated his warning that firms listed on the London Stock Exchange that fail to meet environmental targets risked being denied access to the main equity market, forcing them to become private businesses or list in other jurisdictions.
Monzo banks £113m amid US expansion
Monzo has announced that it has raised £113m in additional funding, bringing the London-based digital bank’s valuation to £2bn as it looks to expand in America. The funding round was led by Y Combinator Continuity Fund, a renowned Silicon Valley investor. Monzo will use the funds for its imminent launch in the US and to develop its "marketplace" idea, which offers customers savings accounts from other providers and allows them to switch energy providers. CEO Tom Blomfield commented: “It's so exciting when amazing investors back our mission to transform banking and make money work for everyone. We'll keep working hard to deliver the products our customers need.”
HBOS probed second alleged fraud
It has been revealed that HBOS was investigating another alleged fraud at the same time as it probed a case at its Reading branch. The second fraud case only came to light when mentioned in the FCA’s report on HBOS's handling of the scandal in Reading. It was shown that the bank informed police and regulators about the second situation in 2007, with details of the investigation and resolution not currently known. It is understood the allegation related to part of HBOS's retail banking operation, rather than its business lending arm.
Lloyds will not reveal frozen account details
Lloyds Banking Group has refused to reveal how much money is in the Jersey accounts which it has frozen amid heightened fears about financial crime. It would not say how many of the 8,000 accounts were held by UK citizens. Lloyds emphasised that it had frozen the accounts because customers had not got back in touch, not because of any other specific concerns.
UniCredit cools Commerzbank ambitions
Italy's UniCredit has shelved a potential bid for Commerzbank, over concerns that it would be too soon after the collapse of merger talks with Deutsche Bank. UniCredit had stepped up preparations for a potential takeover by engaging Lazard and its banker Joerg Asmussen, a former German deputy finance minister, along with JP Morgan, raising the prospect of a deal.
Danske Bank sacks former interim CEO
Danske Bank has fired Jesper Nielsen from his role as head of banking and his membership of the bank’s executive board. Nielsen stepped in as interim chief executive last October after Danske sacked former boss Thomas Borgen over its €200bn (£177.8bn) money laundering scandal.
New digital banks challenge HSBC’s Hong Kong dominance
HSBC’s dominance in Hong Kong is set to be challenged after eight new digital-only upstarts were granted “virtual banking” licences by Hong Kong’s Monetary Authority.
Daimler issues another profit warning
German car maker Daimler has acknowledged that provisions for it manipulating car diesel emissions would again eat into its profits - the third such warning in a year. The Mercedes Benz owner now expects annual profits before interest and tax to be the same as last year’s €11.1bn - significantly below the €14.3bn reported for 2017.
FCA faces complaints deadline
The FCA has been given until October to respond to investors who lost money after following information on the watchdog’s register which later turned out to be incorrect. This comes after investors who followed the FCA’s official listing for peer-to-peer platform Collateral UK took a hit when the firm entered administration. Investors, who believed Collateral UK was approved by the FCA, had been told they would not receive a response until after the regulator's investigation into the collapse was complete. The Financial Complaints Commissioner has stepped in, saying the FCA has until October 8 to investigate the issue and deal with complaints over its role in the matter.
Wealth manager: Woodford illiquidity ‘breath-taking’
Analysis of Neil Woodford’s suspended Equity Income fund show that almost half of it was invested in “illiquid” stocks by the end of 2018 – with just 60% “level one securities”. While open-ended funds are allowed to own up to a maximum of 10% in unquoted stocks, accounts show that 20% of the fund's assets were invested in such companies, while a further 20% was invested in stocks that were less liquid. Alan Miller, of online wealth manager SCM Direct, said the figures were “breath-taking” and raised “so many alarm bells”. Meanwhile, the Mail claims that Woodford is in talks with private equity companies as he looks to free up cash by selling stakes in unlisted companies. Elsewhere, Seneca Investment Managers has approached other institutional shareholders to force changes to the board at Woodford Patient Capital, a listed trust headed by Woodford.
US-UK should lead on financial services
Catherine McGuinness, policy chair of the City of London Corporation, will say today that financial services should be at the heart of a future UK-US trade deal. McGuinness will say: “The UK and US enjoy a special relationship in many areas, and I am confident any future free trade agreement would only strengthen our relationship further. We look forward to any future framework having financial services at its heart. It must also lay the framework for greater cooperation on developing the international regulatory landscape.”
EU stock exchanges set for Swiss trading ban
Switzerland is set to ban EU stock exchanges from trading Swiss shares in retaliation for Brussels freezing its bourses out of the EU market. The European Commission has so far refused to grant Swiss stock exchanges access after negotiations over a long-delayed partnership treaty. In retaliation, Bern said it would withdraw recognition from trading venues in the EU from July 1 to “protect the Swiss stock exchange infrastructure in the event of non-extension”.
Global regulators vow to address ‘manufactured defaults’
The FCA will work with the US Securities and Exchange Commission and Commodity Futures Trading Commission to address concerns over intentional defaults designed to trigger credit default swaps payouts.
LEISURE AND HOSPITALITY
Ten Lifestyle agrees deal with Revolut
Ten Lifestyle Group has signed a three-year deal with Revolut to integrate its customer loyalty services directly into the bank's mobile app. The deal will allow Revolut Metal members to request travel and dining bookings.
MEDIA AND ENTERTAINMENT
EE fined for unlawful texts
The Information Commissioner has fined mobile network EE £100,000 for sending text messages to customers without their consent. The ICO says more than 2.5m messages were sent in 2018.
Executives leave De La Rue
Passport maker De La Rue has announced that chairman Philip Rogerson and senior independent director Andy Stevens are both planning to leave the firm this year. It comes weeks after the company revealed that profits had fallen and will continue to drop next year.
Civitas keen to keep splashing cash on social housing
Having built up an £830m property portfolio, for-profit social landlord Civitas is looking to spend more than £200m on boosting its housing stock in order to take advantage of strong demand from the NHS and local councils. The majority of the firm’s properties are targeted at elderly or disabled residents. Civitas claims to have saved the taxpayer £59m in the past year by reducing public bodies’ reliance on emergency housing.
Monsoon’s restructuring puts 36 stores at risk of closure
Monsoon Accessorize could shut 36 stores under its CVA proposals, despite reassurances that there would be no immediate closures, with stores at high-profile locations at risk including London’s Oxford Street.
Tigers up for sale
Leicester Tigers rugby union club are set to be put up for sale with a £60m price tag. The takeover offer is believed to have been sparked by CVC Capital Partners' £230m stake in Premiership Rugby, which will hand each of the league's 12 clubs around £13m.
Think-tank: Brexit vote negative for the economy
Academic think-tank The UK in a Changing Europe says the Brexit vote has hurt the economy, with its Brexit Scorecard report saying: “There is little doubt that the impact of the Brexit vote on the UK economy has been negative.” The study, which considers the potential implications for inflation, productivity, public finances, exports and imports, says that while “huge uncertainties” remain about the long-term economic impact, “it seems highly unlikely to be positive”. “The question is how large the damage will be,” the report adds. The think-tank cites calculations by John Springford, deputy director of the Centre for European Reform, which suggest that the UK economy is 2.5% smaller than it would be had Britain voted to remain in the EU.