BANKING
HSBC shares down amidst China tensions
HSBC shares fell more than 3% to 353p yesterday after it was forced to deny it had framed Chinese telecoms equipment maker Huawei. The Times examines how the bank is walking a “tightrope of west versus east” and considers how its prospects may improve after the US election, or if Hong Kong becomes more integrated into China, putting it at the heart of rapid economic growth. Meanwhile, an internal memo to staff from CEO Noel Quinn states that the bank aims to double the number of black staff in senior roles by 2025. Quinn said black employees at the bank have reported feeling overlooked and "uninspired by the lack of senior role models".
Banking veteran departs Revolut after one year
Banking veteran Richard Davies is to leave Revolut to take charge of business lending specialist Allica Bank, but will remain a non-executive director of Revolut’s international holding company.
Delay in warning about payment holiday credit risk attracts criticism
The FCA failed to update its advice page for months with a warning that taking a mortgage holiday during the coronavirus pandemic could impact future creditworthiness assessments. In the meantime, 1.82m had been granted.
Agricultural banks: betting the ranch
The FT’s Lex reports on how Oxbury intends to become UK’s first agricultural lender in a century, something the paper says should give farmers cause to rejoice.
INTERNATIONAL
Deutsche Bank revises approach to fossil fuels
Deutsche Bank is to end global business activities related to coal mining by 2025 at the latest. This will include financing as well as capital market transactions. Effective immediately, the bank said it would also cease financing new projects in the Arctic or oil sand projects. Christian Sewing, CEO and chair of the bank’s Sustainability Council, said: “Our new Fossil Fuels Policy sets us a strict framework for our business activities in the oil, gas and coal sector. In its current form, the Policy sets us ambitious targets and enables us to help our long-standing clients with their own transformation. It will allow us to play our part in protecting the climate and helping the EU to achieve its goal of being climate neutral by 2050.”
Foreign banks refuse accounts of senior Hong Kong officials
Officials in Hong Kong are finding it increasingly difficult to bank with foreign institutions as banks audit for clients who could face US sanctions imposed in response to Beijing’s new security law.
Macquarie accused of stifling extortion claims
Macquarie Group has been accused in a US court of buying the US energy group Vantage Commodities in order to prevent it suing the investment bank for $120m over claims of extortion and sabotage.
Tink aims to be the brains of open banking
The FT looks at Sweden’s fintech success stories, such as Klarna and iZettle, which have both attained unicorn status, and points to Tink’s open banking platform as the next big thing.
AUTOMOTIVE
Mitsubishi Motors reports quarterly loss
Mitsubishi Motors has reported a 176bn yen ($1.7bn) loss for the April-June period, citing the effects of the coronavirus pandemic, compared with a profit of 9.3bn yen for the fiscal first quarter in the year earlier period. Quarterly sales were down 57% to 229.5bn yen ($2.2bn). The firm has said it is focusing on technological research around improved diesel engines, electric power and autonomous vehicles.
AVIATION
Spain travel quarantine damages airline stocks
Britain’s decision to quarantine arrivals from Spain wiped more than £2bn off leading airline and travel stocks yesterday. EasyJet, Tui Group, Ryanair and IAG, the parent company of British Airways all suffered falls. Joshua Mahony, a senior market analyst at spreadbetter IG, remarked: “Losses across European and US airlines highlight the growing fear that many will only survive through massive share dilution.”
FINANCIAL SERVICES
Funding Circle’s chance to prove market sceptics wrong
The Times’ James Hurley speaks with Funding Circle founder and CEO Samir Desai about the company’s progress and the dim view the market has taken recently of online lenders. Mr Desai says the coronavirus pandemic presents an opportunity to prove Funding Circle can be counter-cyclical and that he wants investors to understand the company is heading in the right direction even if that is not yet reflected in the share price. UK managing director Lisa Jacobs adds that the business model was almost built for remote working and that Funding Circle maintained 100% productivity when everyone started working from home.
Margot James joins board of Provident Financial
Margot James, a Conservative minister under Theresa May, has joined the board of Provident Financial. The doorstep lender has had a rough few years, suffering from a botched IT upgrade in 2017 which wiped £1.7bn off its market value. Malcolm Le May, who took over as CEO from Peter Crook in 2018, has been attempting to revamp the business.
Woodford investors see assets plunge by £1bn
Woodford Equity Income fund investors have seen the total value of their assets fall over 25%, or around £1bn, over the past 12 months, with administrator Link Fund Solutions reportedly unable to account for a £122m gap in the total value of the fund. This comes after the fund was suspended in June following a surge of investor withdrawal requests.
UK insurers attack FCA’s business interruption claims in court battle
A lawyer for Hiscox has rejected the FCA’s reasoning that insurers should pay out on business interruption policies and “characterise everything that happened as one indivisible peril”.
Amigo extends banking waiver
Amigo Loans has extended a waiver with RBC which will allow it to amend the terms of a £300m securitisation. The waiver was first announced in May after the FCA told lenders like Amigo to help customers during the COVID-19 crisis by offering forbearance measures on personal loans.
HEALTHCARE
AstraZeneca and Daiichi Sankyo in cancer treatment partnership
AstraZeneca has committed $6bn (£4.6bn) to development of a new Japanese cancer treatment, DS-1062, in partnership with Tokyo-based Daiichi Sankyo. AstraZeneca chief executive Pascal Soriot remarked: “We see significant potential in this antibody drug conjugate in lung as well as in breast and other cancers.” He went on: “We are delighted to enter this new collaboration with Daiichi Sankyo and to build on the successful launch of Enhertu to further expand our pipeline and leadership in oncology.”
LEISURE & HOSPITALITY
City Pub Group reports promising sales figures for last three weeks
City Pub Group has reported sales for the three weeks since reopening on 4 July of £1.8m. The firm stated: “The profitable performance since reopening is a reflection of the quality of our asset base and the professionalism demonstrated by all of our staff, a large number of whom have been with the group for a number of years.”
Casual dining chains have ‘no future’, says former PizzaExpress entrepreneur
Hugh Osmond says private equity firms buying casual dining businesses at risk of bankruptcy because of the COVID-19 crisis fail to understand the model for midmarket branded restaurants was “absolutely broken”.
MANUFACTURING
Britain’s biggest bus maker in trouble
Britain's biggest bus maker is set to axe up to 650 jobs as the pandemic brings a downturn in commuting and social distancing limits passenger numbers. Alexander Dennis, which has seen a slew of orders cancelled, said: "The steps taken so far are insufficient to align the company's cost base to the current economic reality and it now seeks to move to a leaner, more flexible manufacturing model."
REAL ESTATE
Hong Kong investor swoops for Canary Wharf landmark
Hong Kong-based property firm Link, manager of Hong Kong-listed Link Real Estate Investment, has agreed the £380m acquisition of a Canary Wharf office block at 25 Cabot Square. Link’s chief executive George Hongchoy commented: “The Cabot is exactly the kind of stable income-producing high-quality asset with long-term growth potential that we’re looking for,” adding: “Going beyond our home Hong Kong and Mainland China, we’re looking at opportunities in the UK, Singapore, Australia and Japan – transparent and liquid markets with sound legal frameworks and strong economic fundamentals.”
RETAIL
Boohoo in a bind over ethical credentials
Concerns over poor working conditions and illegally low wages at supplier factories could have a permanent impact on Boohoo, analysts say. The fast-fashion retailer has promised a review of its supply chain, but experts say increased manufacturing costs would harm Boohoo’s competitive edge while brand damage could have a “notable ongoing impact” on the company’s shares. Barclays cut its forecast from 470p to 350p until the investigation is complete.
SPORT
Vodafone to be 2021 British and Irish Lions sponsor
Vodafone has been announced as new lead partner on the British and Irish Lions tour to South Africa in 2021 in what is understood to be a £6-7m deal.
ECONOMY
Business confidence returns but hiring remains postponed
Business confidence rose by 8 percentage points to -22% in July, the highest since the lockdown was imposed in March, according to the latest Lloyds Bank Business Barometer. However, fears about a second spike in infections are weighing on consumer confidence while higher unemployment is expected to further weigh on demand. Lloyds found 16% of companies plan to bring back all their furloughed employees. A further 24% expect to retain more than 90%. Just 17% of businesses expect to increase employment over the next 12 months, up one point from June, while 40% expect to cut staffing levels.