BANKING
Monzo holds bulk of challenger bank market
Figures from data provider Apptopia show that Monzo accounts for more than half of the digital challenger bank market in Britain. Analysis of the UK's biggest fintech challengers' share of monthly active mobile users shows Monzo held more than 50% in September, up from 35% in April 2018. The challenger has over 3m account holders, with Current Account Switch Service figures from Moneycomms showing a net 34,763 current accounts switched over to Monzo since Q2 2018, with around 13,500 added in the last three months. The Apptopia research shows that Revolut’s share of monthly active users has fallen from 35% in April 2018 to 20% this September, while in the same period Starling Bank saw its share slip from around 25% to around 20%.
Goldman leads on fees
Data compiled by Refinitiv shows Goldman Sachs is this year’s top performer among major investment banks, taking 7% of total income paid out for mergers, acquisitions and stock market floats in Britain with $335m in fees. Morgan Stanley follows with $317m in fees, while Barclays, which has earned $311m this year, is in third. The biggest decline in earnings has been at HSBC which made $176m, down 53% from last year.
Santander spends £350m on majority stake in Ebury
Santander has acquired a 50.1% holding in UK-based fintech firm Ebury for £350m. Ebury provides SMEs with foreign exchange services, cash management and trade finance. Santander said that £70m in equity from the deal will be used to support Ebury's plans to expand into new markets.
PRIVATE EQUITY
Esprit in managerial reshuffle
Draper Esprit has had a reshuffle at the top, with chief executive Simon Cook moving to the role of chief investment officer. It is understood there will be no change to his salary, which last year stood at £348,000. Martin Davis will take over as chief executive, moving across from investment management business Kames Capital.
INTERNATIONAL
Sewing urged to stop dual roles
The European Central Bank and German regulator BaFin are putting pressure on Deutsche Bank's Christian Sewing to give up his dual roles of chief executive and head of investment banking over fears that his responsibilities could undermine the group's restructuring plans.
Private bank chief warns on pain of negative rates
Vincent Taupin, head of Switzerland’s Edmund de Rothschild, has warned that Europe's private lenders could face challenges as negative interest rates hit business models.
Macquarie exit signals broader equities retreat
The Daily Mail suggests Macquarie Group's recent exit from European and US equity trading may be the beginning of a “large-scale retreat from the once-thriving business, as all but the biggest global banks struggle to make it pay.” It points out that cash equities, equity derivatives and prime brokerage firms have all been in decline at the same time for the first time in four years, piling pressure on the sector with European revenues in equities trading falling around 15% - 17% in the first half of the year compared with the same period a year earlier.
Westpac raising $1.7bn in capital as profit falls
Australia's Westpac is raising A$2.5bn through an equity raising after posting its worst financial results in a decade, with cash profit falling 15% to A$6.85bn, its first dip since 2009. The capital raising comes as part of efforts to meet regulatory requirements and nearly A$10bn in litigation costs related to the Royal Commission scrutiny of misconduct in the finance sector.
AVIATION
British Airways owner IAG acquires Air Europa for €1bn
IAG is to acquire rival Air Europa as part of a €1bn deal which would bolster its presence in the South Atlantic, with chief executive Willie Walsh commenting: “Acquiring Air Europa would add a new competitive, cost effective airline to IAG, consolidating Madrid as a leading European hub and resulting in IAG achieving South Atlantic leadership.” Ryanair boss Michael O’Leary believes the Competition and Markets Authority should look at any deal, saying it is “a bad deal from a competition point of view” and insisting Ryanair “would certainly be looking for the competition authorities to require some competition divestments.”
Ryanair sees flat profit
Ryanair has reported a flat year-on-year profit of €1.15bn to the end of September, with its half-year results showing traffic rose 11% to 86m passengers. Revenue per passenger was up 1% and add-on sales were up 16%, although air fares fell 5%. The airline narrowed full year profit guidance to €800m to €900m, down from its previous range of €750m to €950m.
CONSTRUCTION
UK construction sector figures reveal decline
The construction purchasing managers’ index (PMI) registered 44.2 last month, an increase from 43.3 in September, according to survey data from IHS Markit and the Chartered Institute of Procurement & Supply (Cips), with Brexit-related uncertainty continuing to weigh on the industry. Civil engineering firms were the worst hit as activity fell at its fastest pace for a decade, while survey respondents also registered the biggest drop in house building work since June 2016. Commercial construction also fell for the tenth month in a row.
FINANCIAL SERVICES
Post-Brexit hubs face Esma checks
British financial firms which have moved to new EU hubs to avoid Brexit disruption are facing scrutiny from the European Securities and Markets Authority (Esma), with the watchdog to check whether firms are gaming licensing requirements. Esma chairman Steven Maijoor has told the European Parliament that the regulator has entered a "completely new area of supervisory convergence" to avoid unfair competition and will make sure relocations include enough staff in the newly-opened EU offices.
Woodford trust breaches debt limit
Woodford Patient Capital Trust has surpassed a debt limit of 20% of its value after a writedown of one of its most prominent stakes. Link Fund Solutions lowered its estimated value for Industrial Heat, which is now valued at less than a fifth of the level it was last autumn.
Hiscox's premiums up after natural disasters
Earnings from premiums rose in the first nine months of the year at insurer Hiscox, as the firm set aside $165m for claims in the wake of hurricane Dorian and typhoons Hagibis and Faxai. The firm said fees and profit commissions would be around $25m lower at the end of the year, while gross written premiums were up 7.3% to $3.21bn for the nine months ended September 30.
HEALTHCARE
Investment bank eyes Woodford healthcare portfolio
A consortium led by boutique life sciences investment bank WG Partners is in talks to acquire £500m of healthcare assets bought by former fund manager Neil Woodford. Other bidders for the stakes in listed and privately held healthcare firms include hedge fund Omega and venture fund Rosetta Capital.
LEISURE AND HOSPITALITY
Takeaway.com deal structure for Just Eat altered
Takeaway.com has announced that it has changed the structure of its takeover attempt for Just Eat from a scheme of arrangement that needed 75% approval by both sets of shareholders, to a formal offer requiring 75% of Just Eat shareholders to assent. Takeaway CEO Jitse Groen remarked: "With this switch, we provide additional deal certainty to the Just Eat shareholders”.
Marston's seeks to reduce debt pile with pubs sale
As part of a plan to reduce its debt by £200m over the next four years, Marston’s has sold a portfolio of pubs to Admiral Taverns in a deal worth almost £45m.
MANUFACTURING
Eurozone manufacturing slump continues
Germany remains the main weak point in the eurozone’s economy as manufacturing output showed little sign of improvement in October, based on IHS Markit’s Eurozone manufacturing purchasing managers’ index, which reached 45.9 for the month.
MEDIA AND ENTERTAINMENT
Facebook in corporate rebrand
Facebook has unveiled a rebrand for the parent company, with apps such as Instagram and Whatsapp to show a more prominent “From Facebook” tagline in an effort to help users understand what apps and companies the firm owns and operates.
REAL ESTATE
Two in five renters expect never to become homeowners
Some 40% of tenants living in rented property believe they will never be able to buy their own home, according to a new report. The research by Halifax and YouGov also found that of those currently renting, three in 10 think it is now normal for people to do so for life. Younger generations are more hopeful, with only one in seven 18 to 24-year-olds viewing letting for life as the norm - and more than half believing they will one day own a property. By comparison, a third of 35 to 44-year-olds view renting for life as normal and 28% believe they will never buy.
RETAIL
Mothercare’s UK business to go into administration
Mothercare says it plans to call in administrators to its UK business, putting 2,500 jobs at risk. The retailer expects its 79 UK stores and online business to be wound down by administrators, saying it has become clear UK retail operations “are not capable of returning to a level of structural profitability and returns that are sustainable”. The firm says administration is a “necessary step in the restructuring and refinancing of the group”. The children's retailer has already used a CVA, closing 55 UK stores in the past year. The administration will not include Mothercare’s profitable overseas operations.
Sales boost for retailers
Data from the British Retail Consortium shows that retailers saw their best sales performance since April in October, with total sales up 0.6% on October 2018 and up 0.1% on a like-for-like basis. Helen Dickinson, chief executive of the BRC, said that economic uncertainty means that retailers "will be looking nervously" at the run-up to Christmas. Meanwhile, Barclaycard recorded a 1.5% rise in consumer spending, with an almost 7% rise in fast food and takeaway sales.
ECONOMY
Public spending to increase, says think tank
Research from the Resolution Foundation has found that with both Labour and the Conservatives planning big increases in the size of the state, government spending is likely to head back towards levels last seen in the 1970s. The Resolution Foundation estimated that if the Conservatives were to maintain current spending levels then public spending as a share of the economy would increase to 41.3% by 2023/24, while under Labour government spending as a share of GDP would rise to 43.3%.