BANKING
Banks eye automation to fight back against fintech firms
The Telegraph’s Iain Withers examines how big UK banks are looking towards automation in an attempt to fight back against the challenge from nimbler fintech firms such as Monzo, Starling and Atom. IBM believes that the rapid adoption of automation and artificial intelligence can help big banks slash their costs by up to half. Withers notes that robots can take up a lot of the banking jobs currently carried out by humans, whether it be acting as virtual assistants and chatbots, dealing with automated credit approval processes, or working as robot advisers in wealth or asset management departments. Philip Finch, an analyst at UBS, believes that disruption is a big issue for big lenders, but he doesn’t expect the start-ups to be the main beneficiaries of the AI revolution. “What the start-ups lack is big client databases - I expect many of them will partner with the big banks, which will be win-win,” he contends.
Tesco Bank head joins tech start-up
Outgoing Tesco Bank boss Benny Higgins will become chairman of fintech firm Kyckr in March. Kyckr uses technology to provide compliance services that help to prevent tax evasion, fraud and money laundering. Mr Higgins formerly held senior roles in Standard Life, Royal Bank of Scotland and HBOS.
Nationwide hit by tech glitch
Nationwide apologised to customers yesterday after they were unable to access their online and mobile banking services. The building society said the outage was caused by a "technical issue", which occurred yesterday morning, but did not specify the number of people affected.
MSPs urged to oppose RBS closures
Richard Leonard, the Scottish Labour leader, has lodged a Holyrood motion calling on MSPs to back a campaign opposing widespread RBS local branch closures. The bank unveiled plans to axe 62 branches last week in a move which has been described as "morally bankrupt" by the Unite union. Mr Leonard says the UK government, which still owns a majority shareholding in the bank, should now intervene and halt the closures.
Personal loan rates on the rise
The Mirror reports that banks are hiking rates on personal loans by as much as 0.7%, despite the Bank of England base rate only rising 0.25%. Clydesdale and Yorkshire Bank has increased its loan rate from 2.9% to 3.6% while savers have had rate increases from just 0.1% to 0.25%. Meanwhile, TSB’s loan rate has risen by 0.4% to 3.2%, more than double the 0.15% increase for the majority of savers.
INTERNATIONAL
Atlas Merchant in US insurance deal
Atlas Merchant Capital has teamed up with a group of investors to acquire Talcott Resolution, an annuity business, from The Hartford Group. The Hartford will receive just over $2bn for Talcott.
Goldman Sachs tried to cut its debt exposure to Altice
Goldman Sachs has approached several funds in an attempt to sell part of a loan made to French telecoms group Altice, whose share price has more than halved in the past month.
Citigroup hires eBay executive
Citigroup has hired eBay executive Zoher Karu to head data and analytics for its Asian retail bank.
AUTOMOTIVE
Pendragon to sell US business
Pendragon is putting its US business up for sale following a strategic review. “Given the strong performance of this division, we have concluded it is economically right to sell the business at this time to realise its value,” the UK's largest car dealership said, noting the sale could raise more than £100m before tax.
CONSTRUCTION
Britain's construction sector rebounds
The latest Markit/Cips construction purchasing managers' index (PMI) showed a reading of 53.1 last month, up from 50.8 in October and beating economists' forecasts for 51. Any reading above 50 denotes growth. Industry observers said government policy support and a steady UK economy, which remains in modest growth territory, had boosted sentiment.
FINANCIAL SERVICES
Government mulls Bitcoin regulation
The Treasury has said anti-money laundering regulations should be updated to include Bitcoin and other virtual currencies. A Treasury spokesman said that there were already “clear tax rules” for legitimate crypto-currency users. “We also intend to update regulation to bring virtual currency exchange platforms into anti-money laundering and counter-terrorist financing regulation,” he added. Bitcoin expert Dr Garrick Hileman, a research fellow at the University of Cambridge, said that in jurisdictions such as New York, crypto-currency is already subject to tighter regulation. “I think these announcements have a powerful signalling effect and put the industry on notice that the 'cop on the beat' is concerned and watching crypto-currencies more closely now,” he said. Meanwhile, analysts at JP Morgan have suggested that Bitcoin could join gold as a reliable, long-term way to store wealth. The move to join more formal financial markets “has the potential to elevate cryptocurrencies to an emerging asset class,” according to JP Morgan analyst Nikolaos Panigirtzoglou.
Only one in 10 take advantage of new Isas
Only 39,000 inheritable Isas were opened between their introduction in April 2015 and July this year, despite 387,000 people being eligible, the Telegraph reports. Inheritable Isas provide the surviving spouse after death with an additional allowance to the value of the Isa account, however, gains in the value of assets held in the Isas from the time of death are not included in the allowance – something the government says it will change from April next year.
HEALTHCARE
Four Seasons on brink of collapse
Four Seasons, Britain’s biggest private care home operator, is at risk of going into administration over a £26m interest payment due on its debts, and amid a dispute between its owner and main bondholder, American hedge fund H/2 Capital. Terra Firma, which owns Four Seasons, has offered to hand over the operator’s 343 care homes to H/2 if the hedge fund created a creditors’ committee to “agree an orderly and responsible handover and to collectively agree with the other bondholders and creditors a new capital structure for the Four Seasons group, new equity ownership and new corporate governance”. H/2 has not responded to the offer yet, and has previously put forward its own restructuring plan, as it is in dispute with Terra Firma over the ownership of 24 profitable homes.
MANUFACTURING
En+ buoyant after London float
Third quarter net profit at Russia's En+ Group rose 43% year-on-year to $350m (£260m). In its first results since its IPO in London, the largest in the metals and mining and energy segments in the capital so far this year, revenue in the period grew 17% to $2.9bn, while adjusted earnings before Ebitda increased 41% to $803m.
MEDIA & ENTERTAINMENT
Fox resumes sale talks with Disney
21st Century Fox is reported to have resumed talks with Walt Disney over a sale of "most" of its business. Talks between the two companies were believed to have ended last month. But according to reports, including the Wall Street Journal, in which the Murdoch family has a large stake, the talks have now resumed. Negotiations are said to include Fox's movie and cable networks and international divisions, including Sky.
REAL ESTATE
Overseas investors undeterred by tax changes
Foreign investors are still planning to plough as much as £40bn in central London property despite recent Budget changes to commercial real estate capital gains tax.
RETAIL
Black Friday fails to tempt consumers
Higher food spending rather than Black Friday sales led to UK retail sales rising by 1.5% in November compared with the same month the previous year, according to the British Retail Consortium. Non-food sales fell by 2.2% while food sales rose by 3.4% compared with November last year.
Toys “R” Us to close at least 26 UK stores
Toys “R” Us has confirmed plans to close at least 26 of its 105 UK stores next year, putting around 800 jobs at risk. The British arm of the US company, which filed for bankruptcy protection in the US and Canada in September, said it has “submitted a comprehensive operational and financial restructuring plan” to its creditors for approval over the next 17 days under insolvency rules which aim to stop companies falling into administration.
OTHER
Irish border row thwarts May’s bid to seal Brexit trade deal
Theresa May has failed to clinch a deal to open talks on post-Brexit free trade with the EU after a tentative deal with Dublin to keep EU rules in Northern Ireland angered the Democratic Unionist Party. The UK had reportedly been prepared to accept that Northern Ireland may remain in the EU's customs union and single market in all but name. However, the DUP’s leader Arlene Foster then said her party “will not accept any form of regulatory divergence” that separates Northern Ireland from the rest of the UK. The Irish PM Leo Varadkar said a deal had been done, but the UK then appeared to change its mind over the Irish border question after pressure from the DUP. A spokesperson for Downing Street said the concessions on the Irish border issue were not the only outstanding issues.