Barclays to pay $2bn settlement over US fraud
Barclays is set to pay a $2bn (£1.4bn) penalty to settle a US civil action related to the mis-selling of sub-prime mortgage bonds in the run-up to the financial crisis. The bank settled with the US Department of Justice over billions in toxic housing debt it sold between 2005 and 2007. Two former Barclays executives also agreed to pay $2m to resolve the claims brought against them. Meanwhile, the Sunday Times reports that Barclays is planning a share buyback in the wake of the settlement, which was much smaller than expected. Separately, Barclays has become the first bank in the UK to switch on its “ring-fence” - splitting up its investment bank from its retail bank, as it completes its £1bn transformation. The bank used the extra holiday days over the Easter weekend to make the move, switching off its online banking service overnight and using the time to fix any unexpected problems before the start of the business week.
HSBC to pay £71m in US lawsuit
HSBC has agreed to pay £71m to settle a US lawsuit accusing it of conspiring to manipulate Libor rates. The agreement with ‘over-the-counter’ investors was disclosed in filings at the US District Court in Manhattan, pending court approval. HSBC is the fourth major bank to settle in the case, after Barclays (£85m), Citigroup (£93m) and Deutsche Bank (£171m).
Bank of England's financial crisis actions hit older savers
Nearly three-quarters of retired households lost over £500 in savings income due to the Bank of England’s strategy of quantitative easing following the financial crisis. The Bank’s own report revealed that almost a third of all households “lost out” on earnings from savings, rising to 70% for those aged 65 or over. Separately, the BoE reported a rise in the amount of lending to firms in February, with annual growth at 3.2%, up from 3% in the month before. Meanwhile, banks are selling asset-backed securities at the fastest rate in years, which is likely to increase as the withdrawal of a BoE support programme forces lenders to seek alternative funding.
Bank wins ruling against 'cybersquatter'
Clydesdale Bank has won a legal battle against a ‘cybersquatter’ based in China, who demanded almost £100,000 from the business after snapping up a domain name they wanted. "the registration of the Domain Name was a deliberate attempt on the part of the respondent to seek private gain from the business,” said a document submitted to the court. Meanwhile, the owner of Clydesdale and Yorkshire banks has claimed that it is on schedule to meet its promise of lending £6bn to SMEs over three years, after lending more than £2.1bn in 2017.
Octopus VCT raises record £200m
Octopus Titan raised a record £200m in the current tax year, demonstrating soaring demand for tax-efficient investment schemes backing early-stage businesses and putting VCT UK fundraising on track for its second-highest level ever.
Capital market fintech investment falls by more than half
A study from the Boston Consulting Group has found capital markets fintech ventures attracted less than half as much equity funding last year as they did in 2015 and 2016.
Deutsche Bank CEO could be out by May
Deutsche Bank's CEO John Cryan could be forced out within weeks, despite insisting to staff that he remains committed to leading the business. Mr Cryan’s position is looking vulnerable after it emerged that Paul Achleitner, the bank's chairman, has been quietly sounding out potential successors. Meanwhile, the former boss of Merrill Lynch, John Thain, has been drafted in to join Deutsche Bank’s supervisory board from next month.
Russian central bank plans ‘bad bank’ for $19bn in toxic assets
Russian taxpayers are footing the largest bank rescue bill in Russia’s history, as the country’s central bank is to ringfence Rbs1.1tn ($19bn) in toxic assets from three top nationalised lenders.
Men earn three times more at Ryanair
Ryanair has revealed that it pays male staff in the UK more than three times as much as female staff. Women’s hourly pay is on average 67% lower than men’s and only 3% of its highest earners are women.
France risks instability to win City jobs
France's campaign to win business from London has been described by the head of Britain's banking lobby group as highly political, and that French negotiators’ refusal to accept issues such as legality of contracts poses a serious risk to the financial system post-Brexit. Stephen Jones, the CEO of UK Finance, said that France had been "very joined up" in its campaign "to win for Europe, and for France, what it believes to be its legitimate share of the financial centre that has migrated to London over the last 40 years". Meanwhile, the ECB has told British banks operating in Europe that they cannot rely on a transition deal and must implement their contingency plans for a hard Brexit. City sources predict the hard-line stance will result in the loss of between 5,000 and 10,000 jobs from the UK automatically.
CME buys Nex in £3.9bn deal
CME has agreed to buy Nex Group in a £3.9bn deal that will net Michael Spencer, the former party treasurer, some £670m. CME’s decision to base its European headquarters in London was also lauded as “a signal of tremendous support for Britain’s financial services sector” by Mr Spencer, who owns a 17.6% stake in the firm. "The combination of Nex and CME will be an industry-changing transaction," he added.
Appeal against credit lending crackdown
The boss of Britain's second biggest doorstep lender has warned the FCA not to limit the number of home credit loans people could borrow from one firm, stating that it would see low-income families "choked-off" from vital credit. Paul Smith, chief executive of Morses Club, said such “overzealous regulation" would be "tantamount" to removing borrower choice and could drive borrowers to illegal money lenders.
Bitcoin drops amidst clampdown fears
Cryptocurrency sell-offs have continued as bitcoin hit its lowest price in nearly two weeks, after values were driven down amid fears of a further regulatory clampdown and following a social media ban on adverts. The market had been worth more than $800bn at the start of the year, but the total value of bitcoin, ethereum and other virtual currencies fell below $300bn last week.
Savers warned over pensions complacency
The FCA is warning savers to ensure they are properly informed about their pensions amid concerns that bad investment choices could leave a third of people without enough money for their retirement. Since pension rules changed in 2015, almost 700,000 savers have removed their savings and invested them in income drawdown products to fund their retirement. However, more than a third have chosen investment products without taking expert advice.
BMI Healthcare up for sale
BMI Healthcare has been put up for sale as its South African owner attempts to slash its rent bill. Netcare has been in a long-running dispute with landlords that own 35 of its 59 hospitals and treatment centres. BMI itself is wrestling with debts of £1.5bn following an ill-fated buyout by Apax and Netcare in 2006. A short-term debt deal with BMI's banks has expired recently and Netcare said a temporary package was signed only after it agreed to relinquish control of BMI.
Government may halt GKN takeover
Business Secretary Greg Clark has said Melrose’s planned takeover of GKN would be assessed to see if the deal gives rise to public interest concerns on the grounds of financial stability and national security. The move comes after 52.4% of GKN shareholders voted in favour of the £8bn takeover after nearly three months of pressure. Politicians and trade unions have labelled Melrose an “asset stripper” but Christopher Miller, chairman of Melrose, said that GKN would be “entering into very good hands”.
Industry planning post-Brexit jobs cull
More than 20% of manufacturing firms are planning to cull jobs as they prepare to cope with the costs of Brexit, according to new research. A Chartered Institute of Procurement and Supply survey suggested the sector is already losing business, with more than one in 10 manufacturers saying they have already lost contracts. The figures emerged as a group of cross-party MPs and peers hope to persuade the government to reconsider its plans to leave the EU's customs union.
MEDIA AND ENTERTAINMENT
Odeon set for IPO
AMC Entertainment Holdings, the parent company of Odeon Cinemas, is understood to have appointed Citi to advise it on a London listing that could value the cinema chain at more than $2bn.
Housing market weaker than expected
House price growth slowed and the number of mortgage approvals fell to one of the lowest levels in nearly two years in March, as the housing market continued to be sluggish. Research by Nationwide showed that property prices fell 0.2% and annual growth slipped from 2.2% to 2.1% - weaker than economists had expected and reducing the average house price from £211,625 to £210,402.
Asian investors on course to outstrip last year’s record for sums pumped into foreign property
Investors across Asia put $83.4bn into overseas commercial property last year, with $35.5bn going into Europe, the Middle East and Africa - more than doubling the previous year's investment.
Conviviality faces administration
Conviviality Retail, which owns the Bargain Booze and Wine Rack chains and serves over 23,000 trade outlets from hotels to pubs and restaurants, is set to appoint administrators within the next two weeks. Conviviality said it was exploring “a number of inbound enquiries regarding a potential sale of all or parts of the business.”
Wesfarmers seeks bidders for Homebase
Australian conglomerate Wesfarmers has appointed bankers from Lazard to review its options for struggling DIY chain Homebase, including a potential sale.
UK current account deficit shrinks
The ONS has revealed Britain’s current account deficit narrowed sharply last year to stand at £82.9bn, or 4.1% of GDP, which is the narrowest figure as a share of the UK economy since 2011. The squeeze is a result of stronger earnings that the UK made from investments abroad and a fall in what was paid out to foreign investors. The ONS data also showed that the UK economy grew by 1.8% last year, which was higher than previous estimates of 1.7%. However, this was still the slowest rate of expansion since 2012 and below the rates of the eurozone (2.5%), the US (2.3%) and Germany (2.2%).
Use of hard cash dented by contactless payments
Cash in circulation is growing at its slowest rate in 55 years due to shoppers increasingly relying on easier contactless payments and the decision to withdraw old banknotes. Official figures for February showed that the annual growth of notes and coins in circulation dropped to 0.2%.
Thinktank suggests free £10,000 for young people
A "minimum inheritance" of £10,000 should be paid to 25-year-olds in the UK, a think-tank has suggested. The Institute for Public Policy Research (IPRR) said that a Citizen’s Wealth Fund could be created by tax reforms and the selling-off of assets, including the government stake in RBS. The fund could be worth £186bn by 2029-30 if started from 2020-21.