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Daily News Roundup: Tuesday, 30th January 2018

Posted: 30th January 2018

BANKING

Santander scraps unarranged overdraft fees

Santander has announced it is to scrap unarranged overdraft fees for customers with paid-for accounts and is also reducing the monthly fee cap for unauthorised borrowing from £95 to £50 for other current accounts. Andrew Hagger from personal finance site Moneycomms said he wondered whether the decision to overhaul unarranged overdraft fees could be a move to "encourage more of its customers to switch to a fee paying 123 current account.”

M and S Bank offers home loans for the first time

M and S Bank is offering mortgages for the first time, including several designed to help first-time buyers. Would-be homeowners with a 10% deposit can secure a two-year fixed rate of 2.09% with a £995 fee from the bank and receive £1,000 cashback on completion. Two-year tracker rates are also available and start from 1.39% for a 60% loan-to-value mortgage.

Standard Chartered looks to regain step in growth markets

The FT’s Patrick Jenkins says emerging markets-focused bank Standard Chartered has been held back by loan losses and regulatory issues but is now looking to regain its step in growth markets.

PRIVATE EQUITY

Sir Damon Buffini appointed to Schroders board

Following his appointment yesterday to the board of Schroders, the Times features a profile of Sir Damon Buffini. He is described “one of the leading British businessmen of his generation” and a pioneer of the Britain’s private equity industry.

Payout hopes after Action bond sale lift 3i

Shares in private equity group 3i climbed 1.1% yesterday to 940.2p, after discount retailer Action initiated the €2.4bn sale of leveraged bonds to replace its existing €1.6bn debt facility.

INTERNATIONAL

$40m fine for banks

Civil charges against HSBC, UBS and Deutsche Bank have been revealed by US authorities, for manipulating futures markets. The banks paid a total of over $40m to settle the cases, with all three receiving reduced penalties for cooperating in the investigation. The fines come as the US Justice Department, FBI and Commodities Futures Trading Commission launched a probe into 'spoofing' futures markets.

Slow growth frustrates executives

Slow growth on Wall Street is leaving senior management at UBS "immensely frustrated”, with executives resisting big investment, instead focusing on strategic hires, leadership and sales to wealth management clients.

Dimon to remain at JP Morgan

Suggestions that Jamie Dimon might leave JP Morgan to enter politics were refuted last night when the bank announced that chief executive Mr Dimon would stay for five years. Daniel Pinto, who runs the investment bank, and head of consumer banking Gordon Smith have been promoted to be co-presidents and co-chief operating officers.

Commonwealth Bank appoints new CEO

Commonwealth Bank of Australia has appointed Matt Comyn, the current head of its retail bank, as its next chief executive, following a series of scandals that had prompted calls for a total refresh and cultural change at the country’s biggest bank. Mr Comyn’s appointment comes as the lender defends itself in court over its involvement in more than 50,000 alleged breaches of money laundering and antiterrorism laws.

Deutsche Bank defends bigger bonus pool

Deutsche Bank has defended plans to pay staff bigger bonuses despite racking up a third consecutive net loss for 2017. A German government official warned the bank that “the company management must of course ask what impression it leaves in public”.

AUTOMOTIVE

Carmakers sponsored emissions tests on humans

The German government has denounced experiments funded by German carmakers in which humans reportedly inhaled diesel exhaust fumes. German media say the health impact research was done by EUGT, a body funded by Volkswagen, Daimler and BMW.

AVIATION

EasyJet chief takes pay drop

EasyJet's chief executive Johan Lundgren, formerly of travel group Tui, is reducing his salary by £34,000 to match that of his predecessor Carolyn McCall over gender parity concerns. Mr Lundgren's starting annual salary was £740,000, while Ms McCall was on £706,000 when she left the budget airline in November.

CONSTRUCTION

Modern methods and skills investment

New research from Lloyds Bank Commercial Banking reveals that housebuilders are investing in modern construction methods and skills training to deal with industry challenges. Regional director and national head of housebuilding at Lloyds Bank Commercial Banking, David Cleary, commented: “The housebuilding industry remains upbeat despite issues that have weighed down the sector for some time including Brexit uncertainty which is contributing to a skills shortage and inflating the cost of raw materials. It is reassuring to see the sector confronting these challenges head on by investing and planning for business growth, prioritising staff training and looking at more innovative new building techniques.”

FINANCIAL SERVICES

Goldman says shares may fall sharply

Goldman Sachs has recommended that investors use a forthcoming stock market dip to buy shares. The bank predicted that a correction was a "high probability" but that it would not be prolonged. This follows a similar warning recently from Bank of America Merrill Lynch. Peter Oppenheimer, chief global equity strategist at Goldman Sachs, noted that a stock market fall could be "rather painful ... A correction of some kind seems a high probability in the coming months. We do not believe that this would be prolonged or morph into a bear market, and so would see it as a buying opportunity."

RELX buys fraud tool business

Analytics company RELX has bought a Californian technology business, ThreatMetrix, for £580m. The fraud detection tool counts Lloyds Banking Group among its customers, and its Digital Identity Network is one of the largest storehouses of online digital identities on the planet, with 1.4bn unique online identities from 4.5bn devices in 185 countries.

ING expands fintech offering

Dutch bank ING has taken a majority stake in Payvision, valuing the company at €360m (£317m), to allow ING's business clients to accept payments through channels including online stores and retail terminals. “The payments sector is one of the most dynamic areas of the financial services industry. In order to stay a step ahead, ING has to constantly innovate," said the lender's CEO Ralph Hamers.

Vanguard warns of strengthening ‘predators’ in ETF market

Asset manager Vanguard has warned that “predators’’ are taking advantage of exchange traded funds at the expense of retail investors.

HEALTHCARE

Private equity-run agencies raise cost of fostering children

Local authorities have warned that foster-care agencies run by private equity investors for profit are raising the cost of placing vulnerable children with families.

MANUFACTURING

GKN warns Melrose over pension deficit

Engineer GKN has warned Melrose that its £7.4bn hostile bid could result in its 32,000-strong £400m pension deficit "ballooning". GKN said the figure could rocket if the firm is sold as Melrose has a weaker covenant, potentially prompting larger cash calls from GKN’s pension trustees.

MEDIA AND ENTERTAINMENT

Sky Bet reportedly readies flotation

Sky Bet's majority owner CVC is said to be planning a stock market listing of the company, reportedly hiring investment bank Rothschild to examine a listing. It is believed that a flotation could value the company at up to £3bn.

REAL ESTATE

£4bn loss for MoD in Hands homes deal

A National Audit Office report reveals that the Government has lost up to £4.2bn, after it sold more than 50,000 homes for military families during the booming housing market. The Ministry of Defence sold the homes to Annington Property Limited, set up by private equity financier Guy Hands at Nomura, for £1.66bn in 1996, and the report states that in doing so the Government missed out on capital growth of between £2.2bn and £4.2bn. Amyas Morse, head of the NAO, commented that: “This has cost the public sector a great deal in capital growth, and it has been a great deal for the landlord.”

RETAIL

Elliott Advisers in Waterstones talks

The Times reveals that Elliott Advisers is in talks about a takeover of Waterstones. The hedge fund is one of a number of bidders to have lodged formal offers for the bookseller and has been granted a period of exclusivity to conclude negotiations.

ECONOMY

UK growth expected to slow

Economic growth is expected to slow in the first few months of 2018, according to a new survey by Lloyds Bank, which indicates high inflation, weak consumer confidence and Brexit uncertainty are weighing on spending and investment. The survey chimed with a separate survey on consumer confidence by Ipsos Mori that found respondents pessimistic about the outlook for the next year. The polling firm said its confidence index remained at -32 compared to more than +30 in 2014. Meanwhile, analysts have warned that higher oil prices could derail the recovery in the global economy, as the price has jumped by more than 50% since its most recent low in June 2017.

OTHER

Coincheck to refund stolen £380m in cryptocurrency

Japanese cryptocurrency exchange Coincheck said customers will be refunded, after a hack resulted in ¥58bn (£380m) of digital coins being stolen. Japan's Financial Services Agency has demanded assurances from the firm that operations would be tightened to prevent a repeat of the security breach. Coincheck has been given two weeks to submit its report into the incident and present new security measures.

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