Boost to banks and card providers as Mastercard raises fees
Mastercard is to raise the fees it charges EEA merchants when UK cardholders buy goods and services from them online from 0.3% to 1.5%. Brexit means Mastercard is now freed from the EU-imposed cap on interchange fees introduced in 2015. Callum Godwin, chief economist at CMSPI, the global payments consultancy, said airlines, hotels, car rentals and travel groups would be hit. Kevin Hollinrake, chair of the parliamentary group on Fair Business Banking, told the FT that the move “smacks of opportunism”. Visa, which is subject to the same interchange caps as Mastercard, said it was keeping potential changes under review.
Andrew Bailey: Cryptocurrencies are not the future for digital payments
Bank of England Governor Andrew Bailey told a virtual World Economic Forum meeting that cryptocurrencies such as bitcoin are not a stable store of value and so in their current state were not the future for digital payments. Stablecoins on the other hand, because their value is tied to other currencies, were more suitable to debate within the concept of central bank digital currencies, Bailey said.
HSBC to face questions from MPs
The Times considers some of the questions HSBC bosses will face today when they are grilled by MPs over the bank’s treatment of Hong Kong pro-democracy campaigners. The lender has been widely criticised for freezing the accounts of political opponents of Beijing at the behest of the Chinese Communist Party.
Leon Black steps down as chief executive of Apollo
The chief executive of Apollo Global Management, Leon Black, is to retire from the $433bn private equity group he founded in 1990. The move follows a review into Mr Black’s relationship with Jeffrey Epstein, whom Mr Black paid a total of $148m, plus a $10m donation to his charity for advice on trust- and estate-tax planning. The independent probe by Dechert found Black wasn’t involved in disgraced financier’s criminal activities.
VCs flood into banking-as-a-service
The FT reports on the wave of capital flowing into start-ups that provide application programming interfaces, such as Plaid and Synctera, which enable any company to begin offering financial services.
Going digital quickly is a priority for private equity
The FT looks at how private equity groups are keen to exploit the potential of digital transformation for portfolio companies in order to improve revenues and value.
Ex-Deutsche Bank executive Colin Fan to leave SoftBank Vision Fund
Colin Fan is stepping down from his role as managing partner at SoftBank’s Vision Fund and will move into an advisory elsewhere in the business.
Janet Yellen confirmed as US treasury secretary
Janet Yellen has been confirmed as the first ever female US treasury secretary in a Senate vote. She will be responsible for guiding the Biden administration's economic response to the pandemic. At her confirmation hearing on 19 January, Ms Yellen urged Congress to approve trillions more in pandemic relief and economic stimulus, saying that lawmakers should "act big" without worrying about national debt. Yellen headed the US Federal Reserve from 2014 to 2018.
Switzerland's biggest bank to kick off earnings season
UBS will kick off earnings season for lenders in Europe today, with estimated pre-tax profits of $7.5bn for the year, a 36% increase on 2019. The amount banks in Europe have put aside for potentially toxic loans will be a key focus this season, the Telegraph’s Lucy Burton says.
Lotus to build new sports car after £100m cash injection
Geely is to plough £100m into British carmaker Lotus, funding new manufacturing facilities at its Norfolk base and securing its future "into the 2030s". Lotus will build a new range of cars set to include the Type 131.
Car charger firm Ubitricity acquired by Shell
UK electric vehicle charging network Ubitricity is to be acquired by Shell for an undisclosed amount. The move comes as oil firms increasingly restructure their businesses as part of what they describe as the “energy transition” to renewable power.
Boeing whistleblower raises 737 Max alarm
Former Boeing employee turned-whistleblower Ed Pierson has claimed changes made to the 737 Max to get it back in service were insufficient. A report submitted by Pierson was described by pilot and aviation safety campaigner Captain Chesley “Sully” Sullenberger as “very disturbing” because it identified “manufacturing issues in the Boeing factories that go well beyond just the Max”.
New border controls see travel stocks fall
The prospect of further restrictions at the UK’s borders has seen airline and travel stocks fall, with Ryanair and easyJet down 5.6%, Wizz Air 5.5%, Jet2 9.8%, Tui 2.4% while the cruise firm Carnival was down 4.7% yesterday.
London and New York financial services treated the same, says EU
Mairead McGuinness, the EU financial services commissioner, has said that an EU forum for discussing financial services with the UK will be similar to what the U.S. has, and it must be in place before market access will be considered. McGuinness said: “What we envisage for this framework is similar to what we have with the United States, a voluntary structure to compare regulatory initiatives, exchange views on international developments and discuss equivalence related issues.” She added that regulatory cooperation will not be about restoring market access that Britain has lost, nor will it constrain the EU’s unilateral equivalence process. Separately, Jonathan Hill, a former EU financial services commissioner, has warned that Brussels will not do the UK “any favours” as the bloc seeks to build up its own financial services sector. Meanwhile, new research from the City of London Corporation reveals that with a competitiveness rating of 62, London is ahead of New York (54) and Singapore (53), Frankfurt (41), Hong Kong (40) and Tokyo.
Wealth management firm in City move
Wealth management firm JM Finn has signed a deal for a new London office at 25 Copthall Avenue in the City. Hugo Bedford, chief executive of the firm, remarked: “We have been in our current home for 13 years, during which time the firm has changed considerably, not least due to the change of working patterns brought on by COVID-19. 25 Copthall Avenue allows for increased flexibility of space with more contemporary amenities, all within a short walk of our current office.”
Amigo Loans launches last ditch bid for survival
Amigo Loans is pressing ahead with a restructuring plan despite the FCA refusing to issue a "letter of non-objection" to the scheme. Amigo will ask current and former customers to approve the plan, which must also be sanctioned at court hearings in March and May. The FCA could still restrict its lending permissions, scuppering the restructuring, and leaving customers who were given unaffordable loans with no redress.
TP ICAP reports delay to Paris move
TP ICAP has reported that the coronavirus pandemic has seen completion of its new base in Paris delayed. The firm said however that a large financial impact from a reduction of services was not expected.
Brussels threatens to block exports of Pfizer Covid vaccine
The EU is to impose tighter controls on vaccine exports after UK-based AstraZeneca said it will deliver 50m fewer doses to the EU than it had expected. The company blamed "production problems" caused by work to ramp up long-term production at its factories. The move could reduce supply of the Belgian-made Pfizer jabs to the UK. MPs accused the EU of acting out of "spite" as it tried to deflect blame for its own cumbersome procurement process. Separately, US pharmaceutical giant Merck has dropped out of the Covid vaccine race after its jab failed to generate enough of an immune response in patients in early-stage clinical trials.
Long-acting HIV treatment developed
Viiv Healthcare has developed a long-acting treatment for people living with HIV, meaning patients no longer need to take pills every day. Viiv is a collaboration between Britain's GSK, US-based Pfizer and Japan's Shionogi.
Life sciences investment grows in UK
The coronavirus pandemic has seen British life sciences firms raise £20bn last year, with figures compiled by PitchBook showing that Britain came fourth in the list of countries reporting the greatest investment into the sector.
Octopus Ventures in £100m fund launch
Octopus Ventures has announced the launch of a new £100m fund as it seeks to transform public healthcare systems across Europe and emerging markets.
MEDIA & ENTERTAINMENT
Cineworld shareholders approve £65m bonus plan
Some 70% of Cineworld shareholders have approved a bonus scheme which could award its chief executive Mooky Greidinger and his brother and deputy Israel Greidinger up to £65m each in shares. The pair have a 20% stake which they used to vote in favour of the plan. Cineworld, which raised £563m in new debt in November, said it would continue to engage with shareholders on remuneration matters.
Boohoo agrees Debenhams deal
Boohoo has confirmed that it will acquire the online operations of Debenhams, in a deal worth £55m. However it will not take on any of the firm's remaining 118 High Street stores or its workforce, meaning 12,000 jobs at the department store chain are now at risk. John Lyttle, the Boohoo chief executive, said the company was still “working through the numbers” on how many jobs might be saved but that there were “no definitive numbers at this point”.
Asos in talks to acquire Arcadia brands
Asos has confirmed it is in exclusive talks to buy the Topshop, Topman, Miss Selfridge and HIIT brands from Sir Philip Green’s Arcadia empire.
UK worst hit in G7 by pandemic
The UK economy shrank more than that of any other G7 country last year in what the Bank of England says will be Britain’s biggest slump in more than 300 years. The UK’s dependence on consumer spending, which was so hard hit by the pandemic, is one of the main reasons. Leading into the pandemic, the UK was suffering from weak business investment, poor productivity and low wage growth going due to years of uncertainty over Brexit.