Lloyds pledges further £1m to support credit unions
Lloyds Banking Group has pledged an extra £1m to support credit unions. The banking group’s Credit Union Development Fund, run in partnership with the Credit Union Foundation, has awarded 18 Scottish credit unions with more than £885,000 to support members across Scotland. The fund is designed to strengthen the financial position of credit unions and has provided more than £5m in funding to UK credit unions to date. Philip Grant, chairman of Lloyds Banking Group's Scottish executive committee, commented: "As part of our commitment to helping Scotland prosper, we continue to support organisations such as 1st Alliance (Ayrshire) Credit Union who play an invaluable role in helping people across the region."
Starling Bank chief’s stake slides
Starling Bank chief executive Anne Boden has lost her position as a major shareholder in the British fintech firm, following a large funding injection in February. It follows the bank’s series C funding round in February, in which Ms Boden had to dilute her shares in order to accommodate its two investors.
Moneybox and OakNorth team up for Lifetime Isa
Moneybox and OakNorth Bank have teamed up to offer the Moneybox Lifetime Isa, with a rate of 1.4%. Ben Stanway, co-founder of Moneybox, said: “The Lifetime Isa provides a much-needed helping hand to young people trying to get on the property ladder and we've been very surprised to see so few banks make it available to their customers.”
KKR to sell Japanese chipmaker for $2bn
KKR has agreed to sell its recently-acquired chipmaking business Kokusai Electric to US-based Applied Materials in a deal worth $2.2bn.
Foreign banks take aim at Australia’s big four oligopoly
The FT says Australia’s big four lenders face losing market share to “cashed-up” foreign rivals as they struggle to rebuild their reputation following a Royal Commission inquiry. Separately, the FT says the Big Four may have to sell their New Zealand subsidiaries if the Reserve Bank of New Zealand pursues a plan to increase the amount of capital they must hold.
Should central banks issue digital cash?
The Telegraph’s Jeremy Warner says that while the idea of central bank digital currencies is superficially attractive, it ignores the reality that a central bank is a wholesaler of money, not a retailer, and therefore has no skills in providing financial services to the retail market. However, Jean-Pierre Landau in the FT says central banks should issue digital currencies of their own as a way of protecting financial stability, monetary policy and access to public money.
JPMorgan faced with 33% premium to control Chinese asset manager
JPMorgan’s asset management arm will have to pay a 33% premium to take control of its Chinese joint venture, China International Fund Management.
FWD extends reach with Thai deal
FWD insurance group has stepped up its Asia presence with the acquisition of the life insurance business of Thailand's Siam Commercial Bank for Bt92.7bn ($3bn).
Italian group considers upping Aston Martin stake
Investindustrial, the largest shareholder in Aston Martin, is considering increasing its stake in the company by a further 3%. The Italian private equity firm already owns 31% of the luxury carmarker.
Firms must report on climate change by 2022
Publicly listed companies and large asset owners will have to report on how climate change risk impacts on their activities by 2022, the City minister John Glen is set to announce. Speaking at a Green Finance Summit in London, Mr Glen will point out that the UK's financial services sector must be at the heart of the country's efforts to tackle climate change and meet a goal of net zero carbon emissions by 2050. Banks will be urged to play a bigger role to support the UK meeting its target by investing in sustainability and explaining their own exposure to the climate crisis while financial services firms will also be expected to disclose how climate change risk will hit their activities.
Woodford fund stays shuttered
Neil Woodford’s flagship fund remains locked for investors, it has been confirmed. The extension, announced as the initial 28-day suspension expired, means investors in the Woodford Equity Income fund will have to wait at least another month to withdraw their money. "It remains in the best interests of all investors in the fund to continue the suspension," Link, the regulated manager of the fund, said in a letter to investors posted on its website. The next update on the fund will be before 29 July, the next formal deadline for a review.
FCA cracks down on CFDs
The Financial Conduct Authority will introduce new rules restricting how "contracts for difference" (CFDs) are sold, marketed and distributed to retail investors from August. The new restrictions will significantly reduce the amount of leverage traders can take on and will guarantee an investor cannot lose more money than they have in their trading account.
Overperforming investment companies focus on small and unquoted firms
Research by the Association of Investment companies (AIC) reveals almost half of the most consistently overperforming investment companies invest in small and unquoted firms. AIC analysed members’ performance over a decade and found that nine of the top 20 firms invest in such companies. Six of the nine top performers invest in small companies, while three are in the private equity sector and invest in unquoted companies.
Insurers cutting coal exposure
Insurer Chubb has joined a raft of other financial institutions, including Lloyds Banking Group, Hannover Re and Allianz Group, in scaling back its exposure to coal. It will not underwrite new risks for companies that generate more than 30% of their revenue from coal.
Manufacturing output plummets in June
Experts blamed heavy Brexit stockpiling ahead of the UK’s original departure deadline of March 29 for UK manufacturing output in June falling to its lowest level since February 2013. IHS Markit’s purchasing managers’ index (PMI) measure fell to a 76-month low of 48 last month, as new business orders dropped to a seven-year low. Steve Harris, head of manufacturing for large corporates at Lloyds Bank Commercial Banking, said: “Stockpiling has been the key trend in the industry for the past year, making it difficult to get an accurate reading on ‘true’ activity in the sector, and continuing to put pressure on working capital and supply chains.”
MEDIA AND ENTERTAINMENT
WPP in talks with Bain for $2bn sale of Kantar
WPP has entered exclusive discussions with Bain Capital over the sale of a majority stake in its market research business Kantar. WPP said that the sale, were it to proceed, would value the subsidiary at $4bn. Meanwhile, the FT reports that WPP has now disposed of over 30 of its businesses after announcing the sale of communications firm Chime to majority shareholder Providence Equity Partners.
Consumer credit growth grinds to five-year slump
Year-on-year unsecured consumer credit growth slowed to a five-year low in May, according to data from the Bank of England, which shows growth rose by 5.6% in the month, down from 5.9% in April to its lowest rate since April 2014. The data also showed net mortgage borrowing by households fell to £3.1bn in May - the smallest increase since April 2017.
US regulator keen on BoE top job
Christopher Giancarlo, a former chairman of the US Commodity Futures Trading Commission, has expressed an interest in becoming governor of the Bank of England. Although he has not publicly declared his interest in the job, sources told the Financial News that he was “considering his prospects.”
Inside the Bank of England
Inside the Bank of England, a documentary that goes behind-the-scenes at Threadneedle Street, airs tonight on BBC2 at 9.30pm.