FCA warns banks over Brexit move
The Financial Conduct Authority has formally written to banks warning them about moving business away from the UK over Brexit. The letter, signed by Megan Butler, the FCA’s executive director for supervision, says that banks that move non-EU clients outside the UK could expose them to increased costs and new risks, and suggested that banks should “make the minimum necessary changes required” and that clients “should not be moved out of the UK until the FCA is satisfied” that firms have “fully considered the impact” of such plans. Matthew Vincent in the FT says the warning shows that the regulator has woken up to some of the geographic realities of Brexit. Meanwhile, Andrew Bailey, the head of the FCA, has denied that he was pressurised by government ministers to warn City banks against needlessly moving business out of London ahead of Brexit. Mr Bailey told MPs that the FCA was concerned about banks deciding to shift non-EU international business to newly-created EU subsidiaries, along with EU business, in order that the subsidiaries achieve “critical mass”.
Bank of America completes Brexit move to Dublin
Bank of America has completed its banking and markets operations move from London to Dublin, after receiving all required regulatory and court approvals. Bank of America earlier this year said it would relocate up to 125 roles from the UK, with employees in finance, risk, compliance, technology and credit functions affected.
UK banks go Dutch
Officials at the Dutch central bank have said they are being swamped by applications from UK banks wanting to leave the UK in the event of a no-deal Brexit. Spokesman Tobias Oudejans said licensing authorities are “a lot busier than usual”.
Zopa awarded banking licence
The FCA has awarded Zopa a banking licence which means it can now start testing banking products such as deposit accounts and credit cards. The peer-to-peer lender pledged that it would take market share from the main operators.
Buying Monzo shares? Not worth the overdraft
Patrick Hosking in the Times comments on Monzo’s decision to allow its customers to use their overdrafts to buy shares in the bank. Hosking argues that investors are taking a gamble, adding that success is already baked into the current share price. He recommends investors do not use their overdrafts to invest.
All-male ventures receive 93% of funds for start-ups
A new report from investment firm Atomico has found that 93% of all fund raised in 2018 went to all-male founding teams. Of 175 large start-ups included in the survey only 6% had a female CEO, and even the roles most often held by women - chief marketing officer and CFO - were held by men in 80% of cases. Niklas Zennström, the founder of Atomico said the investment community needed to lead the change. He said: “Start-ups are missing out on performance because they lack diversity. This means diversity not just of gender, but in terms of background, race, ethnicity, physical and cognitive differences. The entire ecosystem as a whole needs to challenge itself to make concrete commitments and change.”
Bain pulls out of RPC race
Bain Capital has dropped out of the running to acquire RPC, leaving Apollo Management in pole position to acquire the manufacturing group. Analysts at Peel Hunt said Bain's decision to pull out was likely to create “nervousness” among shareholders. RPC has agreed to extend the deadline for a bid until December 21.
King to step back at Terra Firma
Justin King, the former vice chairman and head of portfolio businesses at Terra Firma Capital Partners, is to become a senior adviser to the firm and will stop managing its businesses.
Deutsche Bank investors fear criminal probe will hinder turnaround
Deutsche Bank shareholders have expressed concern that the investigation into suspected money laundering at the bank will make it harder for CEO Christian Sewing to execute his turnaround strategy.
Lufax’s latest funding round hits valuation
Ping An-backed Lufax has raised $1.33bn in its latest funding round. Set up in 2011 by insurer Ping An Insurance Group Co of China, Lufax was valued at $38bn prior to closing, down from a target of $40bn.
Stobart Group to knuckle down
Southend Airport-owner Stobart Group is to cut its fourth-quarter dividend to focus on future investments in “value-creating opportunities”. The firm has paid out £105m to shareholders since March 2017, amid capital expenditure of £67m.
Pensions dashboard could be ready next year
The government has confirmed that it will introduce multiple so-called pension dashboards as early as next year. Pensions Minister Guy Opperman said private schemes would be forced to provide data to consumers via the dashboard, but stopped short of confirming that state pension data would be included as HMRC, which he said was “a bit busy at the moment” with Brexit planning, would have to first create the interface. The scheme would be part-funded by pensions industry levies, as well as using £5m extra DWP funding provided by Philip Hammond in the October budget, and Yvonne Braun, director of long-term savings policy at the Association of British Insurers, said the dashboards had the potential to reunite people with an estimated £20bn in lost pension money.
City firms pay record £75bn tax
New research, which was conducted for the City of London Corporation, shows that City finance firms paid a record £75bn of tax in the year to March. This marks a 4% increase on the previous twelve months and accounts for 10.9% of the Exchequer's total tax take. Catherine McGuinness, policy chair at the corporation, said: “It is more important than ever that the UK remains competitive to safeguard the sector's employment and tax base. It is crucial that we avoid a No Deal Brexit.”
Eurex plans to appeal CME antitrust case ruling
Deutsche Börse’s derivatives bourse Eurex is planning to appeal its loss against CME Group, after it alleged that the Chicago exchange had violated anti-trust laws in the U.S.
GlaxoSmithKline swoops on US firm
GlaxoSmithKline is to acquire oncology-focused US pharma business Tesaro for $5.1bn (£4bn). CEO Emma Walmsley said: “The acquisition of Tesaro will strengthen our pharmaceuticals business by accelerating the build of our oncology pipeline and commercial footprint, along with providing access to new scientific capabilities.” The announcement came after GlaxoSmithKline separately confirmed the £3.1bn sale of malt drinks brand Horlicks to Unilever.
LEISURE AND HOSPITALITY
Thomas Cook shares tank following profit warning
Shares in Thomas Cook have fallen by almost 20% following last week’s £30m profit warning - which it blamed on the summer heatwave. Though next year the brand plans to set up at least 20 new hotels, chief executive Peter Fankhauser acknowledged that 2018 has been a “disappointing year”.
UK manufacturers stockpiling for Brexit
UK manufacturers are stockpiling to counter Brexit-related supply chain disruptions, according to IHS Markit’s latest industry survey, which noted that export orders slowed for the second month in a row in November. While less than one-in-ten expect any contraction in one year’s time, less than half (46%) of firms forecast that output will be higher in 12 months. IHS Markit's Rob Dobson stressed that other tensions, such as the US-China trade war, were also impacting UK manufacturers.
McColl’s issues second profit warning
Convenience store group McColl’s has issued its second profits warning of the year, with the collapse of Palmer & Harvey, one of its major suppliers, exacerbating problems caused by subdued retail spending. Adjusted earnings for the year to November 25th will now come in at £35m, the firm said, below the £44m guidance when it lowered its forecast in July. Same-store sales declined 1.4%.