City bosses want payback after being left on Brexit sidelines
The Telegraph’s Lucy Barton looks ahead to what’s in store for the City post-Brexit as organisations including the Investment Association submit ideas to the Treasury for reform. The lobby group told ministers to consider a fully exempt tax regime for UK funds to keep them competitive with EU rivals. One banking executive who is in regular talks with ministers told the paper: “There will definitely be changes. Banking is completely exposed to politics and political changes – that’s always a huge risk – but I’ve never seen such commitment to change.” But although Rishi Sunak has told the City to brace itself for a “Big Bang 2.0” post-Brexit, TheCityUK’s CEO Miles Celic argues the sector is not chasing a “deregulatory agenda” but is instead focussed on issues such as “access to talent and a stable, predictable, simplified tax regime.” Barnabas Reynolds at Shearman and Sterling believes big changes are on the way, but it could take three to five years for the rule book to look significantly different. Finally, Victoria Saporta, executive director of the BoE's Prudential Regulation Authority, told MPs yesterday that reviewing the cap on banker bonuses is not a priority as it considers what adjustments to EU rules to make.
Anthony Browne: FCA needs to make mortgages fairer
Anthony Browne MP, a member of the Treasury Select Committee and former chief executive of the British Bankers’ Association, writes in the Times on the state of the mortgage market, arguing that the Financial Conduct Authority has mis-understood the problem of the “loyalty penalty”. Browne says the FCA is mistaken to think that “all this mortgage switching is a sign of competition working well. It is not. It is sign of customers being forced to do it otherwise they face huge increases in costs.” Browne concludes that “The FCA should fix the broken mortgage market, kill off the loyalty penalty, and require price comparison websites to reflect the true cost of mortgages. That would be better for customers, the financial health of the nation, and ultimately the banking industry itself.”
FCA probe prompts NatWest to shun cryptos
The decision by NatWest to distance itself from clients who use cryptocurrencies should be seen in the context of the bank currently being prosecuted for anti-money laundering failures, says Anita Clifford, a barrister at Bright Line Law. The Financial Conduct Authority launched criminal proceedings against NatWest last month, for alleged failures under money-laundering rules. “Irrespective of the outcome of the high-profile criminal proceedings, there is a need for improvement of internal processes and the decision to offload customers with crypto payments is part of a much broader effort to show that anti-money laundering systems are being taken seriously and to regain public trust,” Clifford said.
Lenders to cut back on executive travel
HSBC, Lloyds Banking Group and ABN Amro are to reduce business travel as they focus on environmental goals, with airlines forecast to lose some £34bn this year as corporate travellers represent as much as 75% of profit. A HSBC spokesperson commented: “We have an ambition to be net zero by 2030 and to bring our financed emissions to net zero by 2050. We remain committed to supporting our customers in their transition to net zero.”
Bank branches still offering reduced opening hours
The Mail notes that many of Britain's biggest lenders are still only opening branches for four hours a day in some cases, with Barclays, HSBC and Nationwide Building Society yet to return to 9am to 5pm. A Nationwide spokesperson commented: “As we slowly begin to emerge from the pandemic, our ongoing priority is the health and wellbeing of our members and colleagues. While we continue to review our opening hours to ensure we're meeting members' needs, we have no current plans to make any changes.”
Carlyle seeks $22bn for buyout fund
Carlyle Group Inc is seeking $22bn for its eighth flagship private equity fund with $2bn earmarked for growth and technology-focused companies.
Citigroup announces expansion plans
Citigroup’s commercial banking operations in the Europe, Middle East and Africa (EMEA) region are to be expanded, with Raymond Gatcliffe, head of Citi Commercial Bank in EMEA noting: "The UK commercial bank has seen double digit revenue growth, and has become a very important business for us which has given us confidence to expand further in Europe." This comes as rivals Barclays, JPMorgan and BNP Paribas also announce hiring plans for continental Europe.
Russian banking sector forecast raised
Russia's central bank has increased its forecast for the banking sector to between 1.5 and 1.7trn roubles ($20bn - $22.7bn) in profit this year. The bank cited lower-than-expected provisions against non-performing loans, with head of the central bank's banking supervision department Alexander Danilov noting a strong first quarter for the sector.
Migros Bank reaches deal with German authorities
German authorities are to receive some €2.4m ($2.9m) from Switzerland's Migros Bank, after it was accused of helping German clients to hide assets from tax departments in the past. The lender issued a statement saying: "The solution that has been reached covers both the bank and its affected employees. The agreement is effective for all German states and brings corresponding legal certainty.”
Credit Suisse announces new appointment
Renato Costantini has been appointed as the new general counsel for Credit Suisse’s Swiss unit. He will succeed Thomas Grotzer, who had served as interim Global Head of Compliance of Credit Suisse Group since earlier in the month.
Indian stock market strong
Indian shares rose as private-sector lender ICICI Bank reported strong quarterly results. This comes as market analysts said the current coronavirus wave would not have an impact on the stock market similar to that of the first.
Travel company shares up on tourism news
Shares in IAG, the owner of British Airways, jumped nearly 5% yesterday on reports that US tourists who have had Covid vaccinations could soon be allowed to travel to Europe. The news also bumped Rolls-Royce up 5% while EasyJet rose 3.4%.
City of London Corporation to outline action plan
The City of London Corporation will today publish an action plan from its Recovery Taskforce, outlining how the Square Mile can adapt to post-pandemic trends and changing demands on urban centres. Writing in City AM, Policy chair Catherine McGuinness says, “the City Corporation will be launching a London Recovery Campaign, a promotional campaign aimed at workers, encouraging the return to the office, in line with government guidance, highlighting the Square Mile’s diverse and exciting offer.” She adds: “We are eager to welcome back visitors and workers to an even better Square Mile than they left, and we are demonstrating this by investing for the future.”
Standard Life Aberdeen to change name to Abrdn
A rebranding exercise will see UK asset manager Standard Life Aberdeen change its name to Abrdn, which is reportedly pronounced Aberdeen. The company insisted the move would create a “modern, agile, digitally enabled brand” but the change has been widely mocked with former and current staff declaring it a joke and a disaster. However, CEO Stephen Bird said: "It is a highly differentiated brand that will create unity across the business, replacing five different brand names that have each been operating independently."
Open banking start-up bought by YouGov
Open banking start-up Lean App has been acquired by data analytics firm YouGov, giving it access to large amounts of financial transaction data. YouGov CEO Stephan Shakespeare stated: “We are excited to bring Lean App into the YouGov fold as we continue to invest for growth in line with our strategy.”
Insurer NN weighs up sale of €300bn asset management unit
The asset management division of Dutch insurer NN Group could be sold, with the firm considering a merger, joint venture or a partial divestment of the business.
Carlyle acquires Unchained Labs
Carlyle Group has agreed to buy a majority stake in life sciences company Unchained Labs for $435m. The company provides laboratory tools used to devise biological products such as vaccines and gene therapy.
LEISURE & HOSPITALITY
Brexit leaves UK sparkling wine producers feeling flat
British winemakers are warning that red tape and extra costs following Brexit are hampering their export plans with trade association WineGB calling on the Government to reduce barriers to trade.
MEDIA & ENTERTAINMENT
Online learning boost to Pearson
Pearson shares jumped as much as 3.8% in early trading yesterday after the education publisher reported a 5% rise in Q1 revenues, boosted by strong demand for online learning. "We are making good strategic progress in our ongoing shift to digital," chief executive Andy Bird said.
Landlords ‘interested’ in green mortgages
Research by mortgage broker Mortgages for Business has found that 62% of landlords described themselves as 'interested' in sustainable loans, which offer rewards for making properties more energy efficient. However the Mail notes that “only four lenders appear to offer such a product.” Jeni Browne, director of Mortgages for Business commented: “A green mortgage means that, once they can confirm they have a revised energy rating for their property, the right lender will recalculate their mortgage rate at a discount. There are various mortgage products out there but the best are applied on completion of an energy efficiency project and applied for the lifetime of a mortgage.”
Pepco in Warsaw float plan
Poundland owner Pepco has announced plans to float in Warsaw, Poland, instead of London, in an initial public offering that could value the retail group at about EUR4.5bn. Andy Bond, chief executive, said that the decision "wasn't so much 'no' to London but 'yes' to Warsaw.” He said: “Poland is our home. The business started there in 2004. It's our biggest market by number of stores, growth and profitability. We are opening more shops there than anywhere else."
Investors may have to wait until 2025 for dividend recovery
According to Link Group's Dividend Monitor, British companies paid out £12.7bn in dividends in the first quarter of 2021, down 27% on the same period last year. Reduced payouts from oil giants Shell and BP were responsible for most of the drop. Link said dividends were down 42% over the last 12 months and its "best-case" forecast for this year was a rise of just 5.6% on last year's total. Ian Stokes of Link Group said there were signs of recovery but “2025 still looks like the most realistic moment for dividends to match their 2019 high point."