NatWest sells Irish lending to AIB
NatWest is selling most of its Irish commercial lending business to Allied Irish Banks (AIB), which will take over about €4.2bn in loans, €2.8bn in undrawn facilities and about 280 transferred Ulster Bank employees. This comes after NatWest detailed plans to pull out of the Republic of Ireland in February. Ian Gordon, an analyst at Investec, said NatWest has taken a “significant step” toward a complete exit from its “sub-scale, low-return business in the Republic”, while John Cronin, an analyst at stockbroker Goodbody said: “This is a highly attractive deal for both parties from a strategic standpoint.” NatWest is in talks with Ireland’s Permanent TSB about a potential sale of other parts of Ulster Bank, including mortgages, branches and customers’ deposits. It will retain its Ulster Bank business in Northern Ireland.
CC Capital eyes office provider
US private equity firm CC Capital could launch a takeover bid for IWG, a London-listed provider of serviced offices, that would value it at more than £4bn, having held talks about a possible bid. IWG, which has been hit by lockdown restrictions on office working, reported an operating loss of £174m last year and raised capital via a £320m placing in May.
US banks hike dividends
Some of the largest US banks have announced plans to return cash to shareholders over the next year in the form of dividends and stock buybacks. This comes after the Federal Reserve last year put restrictions on how much banks could pay in dividends or spend on stock buybacks amid the coronavirus crisis as it looked to ensure lenders could ride out a pandemic-driven recession. Morgan Stanley is to double its quarterly dividend from 35 cents per share to 70 cents per share, with pay-outs expected to start in Q3. It will also buy back $12bn worth of its outstanding shares over the next year. Wells Fargo is upping its dividend from 10 cents per share to 20 cents a share and plans to buy back $18bn in stock over the next year. JPMorgan Chase will increase its quarterly dividend to $1 per share, up from 90 cents. Bank of America plans to raise its dividend by 17% to 21 cents per share, Truist will raise its dividend to 48 cents per share from 45 cents per share and PNC plans to up its dividend by 9% to $1.25 per share.
Banking jobs in Frankfurt declining
A study by the German lender Helaba has found that banking jobs in Frankfurt are on the decline despite a boost from Brexit. Helaba predicts that headcount at the city's financial institutions will drop by 5% by the end of 2023 to around 62,200 people - a figure which is 3,300 fewer than last autumn. Frankfurt is home to Deutsche Bank, Commerzbank and the European Central Bank – and it also serves as the European headquarters for several non-German banks.
Deutsche Bank compensates winemaker over forex mis-selling
Deutsche Bank has paid out over €10m to J Garcia Carrion, Europe’s largest wine exporter, to settle a dispute over the alleged mis-selling of foreign exchange derivatives. The wine exporter is said to be considering legal action against French lender BNP Paribas after it refused to provide compensation for losses. Commentators say the decision to settle could put pressure on Goldman Sachs and BNP Paribas, which face similar accusations from Japanese engineering firm JGC.
JPMorgan takes 40% stake in C6 Bank
JPMorgan Chase has taken a 40% stake in Brazilian digital bank C6 Bank, marking its entry into Brazilian retail banking. This follows a number of investments into Brazilian players, with Berkshire Hathaway recently investing $500m in digital bank Nubank and SoftBank Group investing in fintech Banco Inter. It is noted that HSBC Holdings and Citigroup sold their retail operations in the country in 2015 and 2016, respectively, having struggled to compete with Banco Bradesco and Itau Unibanco.
Nissan expected to announce gigafactory plans
Nissan is expected to confirm plans to build a battery gigafactory in Sunderland this week. The carmaker is reportedly set to build as many as 200,000 batteries for electric vehicles every year in the UK, with this coming in partnership with Chinese specialist Envision AESC. The site is expected to open in 2024, with BBC News reporting that while the government is contributing to the overall cost of the project, the size of its contribution has not been disclosed. Ministers have previously held talks with six manufacturers about building electric car battery plants, with Ford, LG and Samsung said to be among firms that have had early-stage discussions with the government or local authorities.
Lookers delays results
Car dealer group Lookers has announced a “short delay” in publishing its 2020 results due to its auditor requiring “slightly more time”. Lookers said it is hopeful of releasing its accounts by June 30 – a deadline set by the Financial Conduct Authority.
FPBS report warns of skills gap
Research from the Professional & Business Services Council and the Financial Services Skills Commission suggests that addressing skills gaps within the financial, professional and business services sector could push yearly output to levels 12% higher than where they currently stand, with this equivalent to £38bn annually by 2038. The Skills for Future Success report, which has been supported by Capgemini, City of London Corporation, and TheCityUK, found that almost one-third of sector employers have seen skills shortages resulting in vacancies. It also found that the pandemic has resulted in new skills needs, encompassing technology, interpersonal skills and industry knowledge. TheCityUK CEO Miles Celic said: “We urge government, business, educators, and others to use this report as a roadmap to creating a sustainable pipeline of high-level skills”.
Ex-Goldman analyst and brother deny insider trading
Former Goldman Sachs analyst Mohammed Zina and his brother Suhail, a former Clifford Chance solicitor, have pleaded not guilty to charges of insider trading and fraud brought by the Financial Conduct Authority. They are alleged to have made a profit of about £142,000 by trading in six stocks between July 2016 and December 2017. In Southwark Crown Court yesterday the brothers pleaded not guilty to six counts of insider dealing and three counts of fraud.
Property prices drive surge in IHT advice
New figures from HMRC show that inheritance receipts in April to May 2021 were £966m - £340m higher than the same period last year, due in part to an increase in the value of many people's homes. Financial advisers say significant increases in property values may mean that more estates will nudge past the threshold where inheritance tax is due, without them realising it. According to The Openwork Partnership, a network of financial advisers, there was a 38% increase in demand for advice on inheritance tax planning in the past year, with more than one in ten clients wanting to discuss it. Of these, 43% pointed to rising property prices as one of the reasons for seeking advice.
Officials in talks with retailers over driver shortages
Government officials have met with retailers, logistics groups and wholesalers over fears a shortfall of lorry drivers may result in food shortages, with Department for Environment, Food and Rural Affairs representatives understood to have discussed options including relaxing restrictions on drivers’ working hours and increasing capacity for HGV driving tests and training. The department is also reportedly considering putting drivers on the official shortage occupation list, a move that would make it easier to bring in workers from overseas. This comes after industry leaders warned the UK could see food shortages due to the loss of up to 100,000 lorry drivers as a result of the pandemic and Brexit.
Burberry chief Gobbetti quits
Marco Gobbetti has quit as chief executive of Burberry to become the boss of Salvatore Ferragamo in Italy. Mr Gobbetti, who will leave at the end of 2021, wants to return to Italy and be closer to his family.
Economy grew more than estimated pre-pandemic
Office for National Statistics data published yesterday shows that the UK economy grew more strongly than previously thought in the year prior to the pandemic, with GDP up 1.7% in 2019. A previous calculation had growth down at 1.4%. The report says that average annual growth over the decade hit 2%, up from the 1.8% previously calculated. Average annual GDP growth between 1998 and 2007 was 2.7 %, down from previous estimates of 2.9%. The revisions come as part of a review that looked at factors including double deflation, a method of calculating gross value added designed to better reflect the prices of goods and services used in the production process.
UK poorest nation per capita in NW Europe
Analysis by the House of Commons research library based on International Monetary Fund data shows the UK is the poorest country in north west Europe based on wealth per head of population, falling behind all of its closest neighbours when it comes to per capita wealth. The 2021 figures show that the UK has a GDP income per head of £31,038, falling far below Luxembourg, where a figure of more than £80,000 means it has the highest GDP per capita in the region. The report also reveals that while the UK’s GDP per capita was below the average for northwest Europe by around £5,000 in 2000 - 7.6% below the average, the gap has since increased to around £10,000 - 16.3% below the average.
Small businesses urge ministers to bridge support gap
Small firms need more help to bridge an 18-day gap as pandemic-related restrictions continue but financial support packages wind down, the Federation of Small Business (FSB) says. While lockdown restrictions that were previously set to be lifted in England on June 21 have been kept in place until July 19, a number of measures aimed at helping firms - such as a business rates exemption and deferred VAT payments - will end on July 1, while the contribution to furlough payments employers make will also increase. The FSB is concerned that there will be a gap in financial support that will put more pressure on businesses that are already struggling.
HMRC investigates 13,000 Covid scheme claims
HMRC has launched 12,828 investigations into use of the Government’s pandemic-related business support schemes, looking into potential fraud and other non-compliance with rules. Analysis by law firm BLM shows there were 7,384 investigations related to the job retention scheme, 5,020 linked to the self-employment income support scheme and 424 related to Eat Out to Help Out. A spokesperson for HMRC said: “It is vital we support businesses to recover by ensuring a level playing field so the majority are not undercut by the few who tried to cheat the system.”