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Daily News Roundup: Tuesday, 25th September 2018

Posted: 25th September 2018

BANKING

Bank fraud exceeds £500m in H1

Figures from UK Finance show that over £500m was stolen from customers of British banks in the first half of 2018. Of this, £358m was lost to unauthorised fraud, including transactions made without account holders' knowledge, while £145m involved authorised push payment (APP) scams where people are conned into sending money to another account. Purchase scams, where account holders were conned into paying for products or services that do not exist, were the most common form of APP fraud, while there were also 3,866 reported cases of impersonation scams, in which criminals posed as representatives of a financial institution or the police. The £145m of losses linked to APP marks an increase on the £101m in losses seen in the first half of 2017, with this partly attributed to the fact that more banks reported data this year. UK Finance notes that two-thirds of all unauthorised fraud was successfully thwarted by UK financial institutions.

Tesco Bank faces record fine over cyber attack

The Financial Conduct Authority (FCA) and Tesco Bank are negotiating a penalty over an "unprecedented and serious" cyber-attack that took place in late 2016, with regulators considering a fine of over £30m. The incident, which saw the bank forced to notify 9,000 of its customers after data was stolen and provide a total refund of £2.5m, could see the largest fine ever issued by the FCA in regard to cyber security. However, Sky News has cited a source who says a "substantially lower" sum could be agreed within the next few weeks.

Banks reveal fintech impact

Research from law firm DLA Piper shows that up to a third of financial services firms expect central banks to hold cryptocurrencies on their balance sheets within five years. The study shows that over two thirds of retail and investment banks feel they are being impacted upon by fintech, while a third of banks have engaged with fintech companies to change the way they operate - and 55% are prepared to do so in the next two years. The poll saw 74% of banks warn that regulation and compliance was restricting their ability to adopt new business models and technologies.

Goldman Sachs to launch savings account

Goldman Sachs is expected to launch a UK savings account with an interest rate of 1.5% on balances of as little as £1 this week. Goldman Sachs has been testing the new Marcus account, named after the bank's founder Marcus Goldman, among its 6,000 staff in the UK to ensure a smooth launch. Marcus will be an online-only service and will allow customers to make unlimited withdrawals every year.

Monzo hits a million customers

Digital bank Monzo has hit the 1m customer milestone, with twenty thousand new customers signing up for the bank each week. Monzo customers spend £12,000 on their cards every minute, the firm said, with £4bn in payments made so far.

Alvarium snaps up Lepe stake

Investment company Alvarium has bought a 49% stake in lender Lepe and will seek to offer millionaires in their 20s and 30s an alternative to the City's traditional high-end banks. Alvarium’s Ken Costa said: “Big banks have become discredited for their ability to cater to the next generation. A flexible, more skilful investment bank is going to emerge.”

Labour in bank closure pledge

Labour is to pledge to halt bank closures, with plans to give the Financial Conduct Authority the power to veto plans to shut branches. Welcoming the proposal, Gareth Shaw of Which? said: “Bank branches and free-to-use ATMs are closing at an alarming rate - threatening to leave consumers and businesses without vital banking services. Urgent action is needed to protect access to cash and banking services in areas where people still need them.”

Appointments

BNP Paribas has appointed John Bigham as a senior banker covering strategic clients in global banking EMEA, while Standard Bank has appointed both Adam Brake and Evan Richards to its base metals team.

PRIVATE EQUITY

Family offices eye private equity

A UBS survey of 311 family offices shows that some of the world's wealthiest families plan to allocate more money to private equity. This comes after private equity helped such investors see a 15.5% average increase in the value of their investments in 2017. The survey showed that private equity returned 18% last year, while developed and developing market listed equities returned 23% and 38%, respectively. On what 2018 holds, 13% of family offices expect their direct venture capital and private equity investments to deliver the best returns, with 11% saying private equity funds.

Swiss firm snaps up Meteo

Swiss private equity company TBG has bought weather forecaster Meteo Group, which has the largest private weather measurement network in Europe.

INTERNATIONAL

Frankfurt winning Brexit bank moves

Frankfurt has attracted jobs from Barclays, Lloyds Banking Group, Citigroup and Morgan Stanley, among others, winning the race to attract the banking jobs leaving London because of Brexit, according to a fresh survey by German-headquartered bank Helaba. Paris has gained from Bank of America, Goldman Sachs and HSBC.

Banks storing more cash

The European Central Bank (ECB) says the amount of vault cash held by Europe's major banks increased €21.1bn (£18.9bn) between March 2016 and December 2017. The cash stored by banks reached €76.8bn, compared to a €50.1bn average recorded for the previous eight years. German banks attributed for 70% of the increase, with British, Italian, French, Austrian and Spanish lenders also boosting stores of cash.

Deutsche Bank boss plays down merger talk

Deutsche Bank CEO Christian Sewing has dampened talk of a possible merger, saying that once the bank had made progress on profitability, "then we can talk about other things." This follows speculation of a merger with Commerzbank.

AVIATION

Gama Aviation's profits halve

Pre-tax profit at Gama Aviation dropped from $8.7m (£6.3m) to $3.2m in the six months to June 2017, on the back of challenging market conditions in Europe, the group said. Though the company saw a rise in revenue, from $101.6m to $104.6m, it made strategic investments in Asia, secured a new facility at Bournemouth Airport and began investing in a new Business Aviation Centre at Sharjah Airport.

FINANCIAL SERVICES

NS&I cuts interest rate

National Savings & Investments (NS&I) says the interest paid on its Direct ISA will drop from 1% to 0.75%. The lower rate, announced in July, comes despite the official UK base rate rising last month.

Asset finance firm to help SMEs raise funding

Carrick Asset Finance, which aims to help SMEs release capital tied up in their assets or acquire business critical assets, has launched with support from the Bank of London and the Middle East (BLME). Fred Yue, head of corporate banking for BLME, said: "The asset finance market is buoyant in the UK and there are considerable opportunities for asset finance companies.” British Business Bank data shows that over 65% of SMEs sought finance during the past three years, with over one third of these companies using lease or asset-based finance.

Link-up to deliver farmer loans

UK Agriculture Finance and the Royal Bank of Scotland have launched a banking partnership designed to offer "responsible, secured loans to farmers". Loans of £100,000 to £10m are available if secured against land and property in Scotland, England and Wales.

HEALTHCARE

TPG poised for Abraaj healthcare fund takeover

Private equity firm TPG has entered negotiations to take over management of Abraaj's $1bn healthcare fund, according to a letter sent to employees by AlixPartners, the fund's interim manager.

LEISURE & HOSPITALITY

Thomas Cook's FD out after second profit warning

Thomas Cook’s chief financial officer Bill Scott will leave in November, after just eight months in the role, after the travel agent revealed its second profit warning in two months. Blaming the summer heatwave, the group now expects to make £280m - well below the £323m it previously expected.

MANUFACTURING

Brexit stunting British manufacturing growth

Growth in British manufacturing has slowed as exports cooled, according to fresh data from the Confederation of British Industry (CBI), to the lowest since May. Anna Leach, CBI Head of Economic Intelligence, said: “While manufacturing order books remain strong and output is still growing, Brexit uncertainty continues to cloud the outlook. Heightened fears of a ‘no deal’ Brexit scenario have prompted some firms to move publicly from contingency planning to action."

MEDIA & ENTERTAINMENT

Investors begin cashing in on Sky bid

Comcast began buying heavyweight Sky investors' shares on Monday, through broker Bank of America Merrill Lynch, after its bumper £30.6bn bid. Crispin Odey, who thought it should have paid more, said: “This is an asset I would love to still have. We Brits are terribly good at getting rid of things terribly early". Hedge funds like Baupost and activist Elliott are also likely to sell ahead of the formal offer.

7digital squares up to Spotify

London-listed music technology firm 7digital is partnering with Universal Music Group to power online stores for artists. In a market dominated by the likes of Apple Music and Spotify, the partnership will be laid out over three separate global agreements.

RETAIL

Michael Kors lines up Versace deal

US handbag and clothing brand Michael Kors is set to snap up Versace in a $2bn deal. It is believed that the Versace family will retain a minority stake and some creative control in the company. Currently, the family hold 80% of the business, having sold 20% to private equity group Blackstone for around £190m in 2014.

OTHER

Third of Londoners plan crypto investments

Londoners are twice as likely to invest in cryptocurrencies than the rest of the country, according to a survey by Rathbone Investment Management, with 30% planning to invest in the near future. Just 4% of over 45-year-olds intend to invest in such assets however.

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