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Daily News Roundup: Tuesday, 3rd March 2020

Posted: 3rd March 2020


Some savers face lower fees from new overdraft rules, while others see rises

New analysis by Moneyfacts has detailed the impact new overdraft rules may have on savers, with some finding the cost of becoming overdrawn climbs while others will see charges decrease. Santander customers who borrow £500 over 30 days are set to pay £13.99 as of April, down from £30 now, while HSBC customers holding the bank's Advance current account will pay £13.29 for borrowing £500 for 30 days, up from £6.81. The Mail notes that as banks that previously had flat daily fees have been forced to move to interest-based charges, some savers have lost out as not all banks and accounts had daily charges. It adds that banks with daily fees have made overdrafts cheaper, but those with traditional interest rate overdrafts, have been making them more expensive. Data from Moneyfacts shows that Lloyds Bank, Halifax, Barclays and Monzo customers will benefit, while some First Direct, M&S Bank and Nationwide customers face steeper charges. Separate analysis from personal finance site Moneycomms shows that customers borrowing lower amounts for a shorter period of time are likely to be better off.

Bramson urges Barclays CEO to quit over Epstein ‘circus’

Edward Bramson, an activist investor targeting Barclays, has demanded the resignation of CEO Jes Staley over his links to convicted sex offender Jeffrey Epstein. Mr Epstein was a key client of Mr Staley's when the latter worked at JP Morgan. Urging the lender to remove Mr Staley from his position, Mr Bramson said the scandal "has become a circus" and described the board’s support for its CEO as “extremely ill-advised”. The Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority are investigating Mr Staley’s relationship with Jeffrey Epstein. Mr Bramson's fund Sherborne Investors is Barclays' biggest shareholder, holding a 5.8% stake.

Mortgage approvals hit four year high

UK banks approved 70,900 mortgages in January, according to the Bank of England, up 4.4% from December’s 67,930 figure to the highest number in four years. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “As a result, we now think that the Bank of England will cut the bank rate to 0.5% this month, from 0.75%. The recovery in approvals likely has further to run.”

Goldman builds up 8.5% voting rights in Metro Bank

Goldman Sachs has built up more than 8% voting rights in Metro Bank, regulatory filings show. It has built up 6.18% in Metro Bank voting rights attached to shares, and a further 2.30% through financial instruments, leaving it with a total of 8.48%.

Barclays shareholder adds to fossil fuel pressure

Jupiter Asset Management, one of Barclays’ top-25 shareholders with a 1.2% stake, has joined 11 other institutional investors and over 100 individual shareholders in calling on the bank to stop financing fossil fuel producers that are not aligned with the Paris Agreement climate goals.

Banks thwart fraudsters

Scotland’s Serious Organised Crime Taskforce says over £13m has been saved from being fraudulently withdrawn from bank accounts by criminals in the last year thanks to the Banking Protocol. Banks signed up to the Banking Protocol include Barclays, Bank of Scotland, Clydesdale, Nationwide, Royal Bank of Scotland, Santander and TSB.

New bank to support SME builders

Steve Deutsch, chief executive of new bank GBB, says it will lend £3bn to SME builders who are currently starved of traditional bank funding, with £800m to be pumped into Yorkshire projects over the next five years. GBB expects to receive its provisional banking licence in the third quarter of 2020.


Deal-makers bullish on M&A prospects

According to figures from Refinitiv, 47% of deal-makers anticipate M&A volume growth in 2020, with an average predicted growth of 4.7%. Four in five corporations believe they will make an acquisition in their own industry in 2020, while 57% expect to acquire a business in another industry. Refinitiv data also shows private equity firms spent more on deals in 2019 than at any time since the financial crisis, with dealmaking up for a third consecutive year.

CVC seeks up to €20bn for buyout fund

CVC Capital Partners is looking to raise up to €20bn for its latest flagship buyout fund, in what would be its biggest pool of capital amassed to date. CVC Capital Partners Fund VIII will seek to invest in businesses mostly in Europe and North America.


Travel ban imposed at Goldman Sachs

Goldman Sachs has expanded restrictions over international business trips due to the coronavirus outbreak. It has instructed staff to halt all non-essential overseas business travel as part of a package of "precautionary measures". It has told any staff members who have recently travelled to mainland China, South Korea, Iran and Italy - or engaged in close contact with anyone who has - to self-isolate. JP Morgan Chase has banned non-essential travel.

Deutsche Bank placed under increased compliance supervision

Regulators at the Bank of England have instructed Deutsche Bank to provide monthly compliance updates as opposed to typical quarterly meetings. Deutsche was placed under special supervision by the Financial Conduct Authority four years ago over “systemic” failures in its controls against money laundering, terrorist financing and sanctions breaches, and regulators are concerned that such issues are still occurring.

India appeal increases

The Mail looks at how Citigroup, Deutsche Bank and HSBC are among foreign banks increasingly investing in India, with easing regulations and a surge in online banking driving renewed interest in a market that has “long held promise but tended to under-deliver.” It notes that more than three dozen foreign lenders have been vying for a bigger share of the Indian market for decades but account for just 6% of the banking assets.


Ninety One float to go ahead despite turbulence

Investec’s asset management arm Ninety One is pushing ahead with its planned float, which is expected to raise between £181.9m and £226.1m, despite the recent sell off in global markets. Investec asserted plans to split off its asset management business last year, echoing similar moves by Prudential, Old Mutual and Deutsche Bank, as fees fall and costs rise in the fund management sector.

Hurricanes hit Hiscox

Hurricane Dorian and Typhoons Faxai and Hagibis were among the global catastrophes that hit Hiscox last year. The insurer's profit before tax fell 60% to $53.1m (£41.3m) for the 2019 calendar year, taking the group’s combined ratio to 105.7%, from 94.9%, and gross written premiums to $4.03bn, from $3.77bn the year prior.

Ermotti set for Swiss Re role

UBS CEO Sergio Ermotti is poised to become chairman of Swiss Re next year. Walter Kielholz has been chairman of Swiss Re since 2009. He is expected to be re-elected at a shareholder meeting next month and would then step down in time for Mr Ermotti to become chairman as of the 2021 annual meeting. ING chief executive Ralph Hamers is set to succeed Mr Ermotti, who has run UBS since 2011, as CEO from November 1.


NMC asks creditors not to call in their loans

Private hospital operator NMC has appealed to lenders not to call in their loans while it tries to stabilise the business. The company is facing a major cash crunch having admitted last week to finding discrepancies in its balance sheet. In June, it declared it had £500m of cash, but that figure is now seriously in doubt among analysts and lenders to the group.

Finance chief leaves Sensyne Health

Sensyne Health CFO Lorimer Headley has left the board with immediate effect. This comes just months after a shareholder backlash over Sensyne's remuneration policy when it was revealed that Mr Headley and Lord Drayson, who set up the firm, had been handed bonuses following the company's float but they were not disclosed until ten months later. Michael Norris will serve as interim chief financial officer.


Manufacturing grows but coronavirus disrupts supply chain

IHS Markit has reported that whilst manufacturing continued to grow in February, supply chains have been hit by the coronavirus outbreak. The IHS Markit/CIPS purchasing managers’ index measured 51.7 last month, well above the 50 mark separating growth from contraction but slightly weaker than the previous “flash” reading of 51.9 for February, after supply chain disruptions emerged. However, the index showed orders increasing at the fastest pace in eleven months and business optimism hitting a nine-month high.


London tycoons assert £500m film studios venture

Piers Read and Jeremy Rainbird, two of London’s premier TV tycoons, have secured £500m of institutional investment to build Britain’s first network of world-class film studios across the UK. As well as a £50m investment in Twickenham Studios, their firm, The Creative District Improvement Company, has already applied for planning to build a £148m new studio complex in Kent near the Ashford International train station.


UK consulting market growth slows

UK consulting market growth stuttered to almost halved in the three years to 2019, according to a study by Source Global Research, from 7.5% in 2016 to 4% in 2019, as uncertainty created by the Brexit vote resulted in delays to decision making around policies. The largest markets — public sector and financial services — both suffered acutely, with the latter’s growth of 7% in 2017 falling to 4.1% last year.


Financial services professionals boost prime London market

The number of City workers snapping up property in prime central London areas surged last year. According to new research, the number of buyers from the financial services sector buying £2m-plus properties jumped to 34.6% of total sales in 2019 - the biggest proportion since 2013.


Global growth may halve

The Organisation for Economic Cooperation and Development (OECD) has warned that an escalation in the coronavirus outbreak could cut global economic growth in half and plunge several countries into recession this year. The OECD said that global GDP growth could fall this year to as little as 1.5%, almost half the 2.9% rate it forecast before the outbreak took hold. The reduction in demand and world trade could “push several economies into recession, including Japan and the euro area," the OECD’s report added.


Coronavirus cash concern

The World Health Organisation (WHO) has urged people to wash their hands after using banknotes to prevent the spread of coronavirus, with a warning that the virus can remain on notes for several days. A WHO spokesperson said: “When possible it would also be advisable to use contactless payments to reduce the risk of transmission." The Bank of England offered a similar warning, saying notes can carry bacteria or viruses.

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