Monzo withdraws US banking licence application
Monzo has withdrawn its application for a U.S. banking licence after it was told by the Office of the Comptroller of the Currency it was unlikely to be approved, dealing a blow to the British fintech company’s international expansion plans. The bank said the withdrawal “isn’t the outcome we initially set out to achieve”, but stressed that it still had “big ambitions” for its US business. The move highlights the caution among US regulators about allowing lossmaking start-ups to become banks, in contrast to countries such as the UK that have handed out dozens of licences in recent years in order to promote competition. Separately, Monzo has reduced its gender pay gap to 4% from 20% in 2019.
Dame Helena: Investing in China cannot be reconciled with ESG principles
City veteran Dame Helena Morrissey told the Conservative Party Conference on Monday that HSBC should never have backed the Chinese Communist Party’s decision to introduce a controversial security law in Hong Kong arguing that bank bosses were sacrificing democracy to ingratiate themselves with Beijing. Dame Helena said that investing heavily in China was akin to money laundering or financing drug dealers, given its treatment of political opponents and oppression of the Uighur Muslim minority group. "[HSBC is] saying that they are abiding by the rules, obeying orders, but surely if there is one thing we have learnt through history, it is that this is no defence. These are lines which cannot be crossed."
Sprive app designed to help mortgage holders overpay
A new app developed by former Goldman Sachs banker Jinesh Vohra is intended to make it easier for people to make regular overpayments on their mortgages. Explaining the Sprive app, Vohra stated: "The algorithm looks at the individual's spending. If they have splashed out that month it will take something close to the minimum amount, but if they have been sensible and saved more it will take the maximum." It currently works with lenders HSBC, Lloyds, Barclays, Santander, RBS, Virgin Money, Halifax, NatWest, Yorkshire Building Society, Accord Mortgages and TSB Bank.
Bank of England-backed cyber security war game opens to more companies
An initiative to test the UK financial sector’s cyber defences has been opened up to include all financial services companies, with the Bank of England saying that the “overall sector will be better defended if the whole sector is involved.”
Morrisons chairman: "Not all private equity is bad"
Andrew Higginson, the outgoing chairman of Morrisons, has defended the reputation of private equity after Clayton, Dubilier & Rice (CD&R) won the battle to take over the supermarket chain. Higginson told BBC Radio 4's Today programme: "Obviously, there are good and bad [private equity firms], like in any population. But by and large, private equity is focused on growth and trying to grow businesses, and that's the way
they make their returns: by improving the businesses and flipping them
on, you know, a few years on." Elsewhere, Alex Brummer says in his column for the Mail that with CD&R likely to load the supermarket group with debt, HMRC will be fortunate if it collects any tax from Morrison's in the future.
Deutsche Bank dropped risky clients after Epstein scandal
Deutsche Bank severed relationships with “a very small number” of wealthy clients with criminal records after the arrest of disgraced financier Jeffrey Epstein. The bank subsequently conducted an internal analysis looking for “other cases of clients who were onboarded in the past but should be viewed differently today”. In other news, Deutsche has hired Derek Shakespeare as chairman of M&A for Europe, the Middle East and Africa, according to a statement from the bank. He joins from Barclays, where he was latterly chairman of UK M&A and head of financial institutions group M&A for Europe & Middle East.
EU to decide by November 10th on Macquarie, CDP's Open Fiber deal
Italian state lender Cassa Depositi e Prestiti (CDP) and Australian fund Macquarie have sought EU antitrust approval for their acquisition of broadband network firm Open Fiber, a European Commission filing showed on Monday. State-controlled Enel and CDP had until now shared ownership of Open Fiber, which had been set up to roll out fibre optic cables to close Italy's digital divide with the rest of Europe. The EU competition enforcer set a Nov. 10 deadline for its decision.
Glen promises deep dive for diversity in City
City minister John Glen told a fringe event at the Conservative party conference on Monday that he wanted to see greater progress in diversity at financial services firms. Glen said: “I’m doing a deep dive into individual firms to say, what are you doing to move from a situation where you have 50:50 [gender split]
recruitment at graduate level or intake level, but over the course of
the next 20 years, by the time you get to the senior management and
board appointments, you’ve certainly not got 50:50.” He said solutions
included mentoring and sponsorship and “better interventions” to help
women along that career path.
Banks barely shift gender pay gap
A survey of financial services firms by Reuters has found that major employers in the industry have narrowed their average mean gender pay gap by 0.4 percentage points to 33.4% in the year to April 2020, from 33.8% in 2019. The mean average gender pay gap for all UK employers in the year ending April 2019 was 14.6%. "The UK's financial services industry has often been singled out," said Ann Francke, chief executive of the Chartered Management Institute. "It really does have to get its house in order - the industry is a huge
employer in the UK and it has a real opportunity to lead by example."
City needs access to talent to remain competitive
Writing in City A.M., William Russell, the Lord Mayor of the City of London, urges the Government to work with financial services to ensure the industry has access to global talent. He says: “Ministers need to create a new short-term business visa to allow overseas staff to visit and work in the UK. This would streamline the cost and time taken to move people around regional offices under current immigration rules.” His comments come as a report from TheCityUK warns that London's status as one of the world's most important financial centres is being jeopardised by Brexit-induced difficulties in hiring foreign staff.
Tackle greenwashing to boost sustainable investment, says IMF
The IMF said on Monday that governments must help the sustainable investment industry grow in order to better protect investors from being misled by greenwashing.
Boots to offer face-to-face consultations
Boots has revealed plans to offer face-to-face consultations for minor ailments in a bid to take pressure off the NHS this winter. Pharmacists are being given training that allows them to diagnose conditions and even write prescriptions. Boots chief executive Seb James said appointments will start at £15, which includes the prescription costs. As well as face-to-face appointments in-store, Boots is also offering a pay-as-you-go service with doctors online.
LEISURE & HOSPITALITY
Caffe Nero hires Lazard in refinancing bid
Investment bankers from Lazard have been hired by Caffè Nero to help the group refinance debts of almost £150m and keep Mohsin and Zuber Issa, who own £180m of Caffè Nero's lower-ranking debts, from seizing control of the company.
Pfizer vaccine to be made in the UK
A deal between Pfizer and Thermo Fisher Scientific will see millions of COVID-19 vaccines manufactured in Britain from next year. Thermo Fisher will reportedly take on “fill-finish” duties at its facilities in Swindon, from where doses will be sent to Pfizer's depot in Puurs, Belgium, and then around the world. Prime Minister Boris Johnson tweeted: “I'm thrilled that Pfizer will manufacture vaccines in the UK, bringing hundreds of jobs and helping to deliver vaccines to millions of people around the world.”
MEDIA & ENTERTAINMENT
Facebook services return after 6 hour outage
Facebook's apps and services - including Instagram and WhatsApp – crashed on Monday with users complaining that they were unable to send or receive messages. The outage lasted around six hours during which time $47bn was wiped off Facebook’s market value. Security experts said the outage was likely triggered by a configuration error that left directions to Facebook servers unavailable. The social network giant had only hours before been accused by a whistleblower of putting "profit over safety". Frances Haugen, who worked as a product manager on the civic integrity team at Facebook, also claimed the company’s moderation policies were applied differently, or not at all, to the accounts of celebrities, politicians and high profile Facebook users.
BT slumps as Sky and Virgin Media O2 hold talks
News that Sky is in talks with Virgin Media O2 about investing in the telecoms operator's full-fibre broadband rollout sent shares in BT down 4.7% yesterday. The prospect of an alliance between the pair would deal a blow to Openreach, BT’s infrastructure division, and its boss Philip Jansen’s plan to focus its resources on upgrading its broadband network.
Future’s finance boss resigns
Future’s finance chief has resigned after less than a year and a half in the job. The departure of Rachel Addison prompted a 4.5% drop in the specialist publisher's share price. Addison will be replaced by the group’s former chief financial officer Penny Ladkin-Brand.
Evergrande halts share trading ahead of possible sale of services unit
Evergrande suspended its shares from trading in Hong Kong on Monday as the world’s most indebted real estate developer braced itself for the possible sale of its property management unit. Evergrande, which has $305bn (£225bn) of debts, said on Monday trade was suspended “pending the release by the company of an announcement containing inside information about a major transaction”, sparking speculation it could sell its profitable property management unit.
Takeover speculation boosts Sainsbury's
Sainsbury's rose to the top of the FTSE 100 yesterday, closing 3.4% up, after speculation that the grocer could be next on the shopping list for private equity firms. Tesco was also up by 1.5%, after Fortress, the American firm left empty-handed from the Morrisons takeover tussle, said it was still eyeing UK assets. Joshua Pack, the Dallas-based financier at Fortress, said he would "continue to explore opportunities in the UK".
Sunak - future tax cuts depend on repairing public finances
The Chancellor told the Conservative party conference yesterday that future tax cuts are conditional on repairing the UK's public finances after the pandemic. Rishi Sunak defended a series of recent tax hikes arguing that funding the pandemic recovery "comes with a cost". He added that borrowing excessively and making unfunded promises was “not just economically irresponsible — it is immoral”. Mr Sunak went on to say he was “proud to back Brexit”, arguing that “the agility, flexibility and freedom provided by Brexit would be more valuable in a 21st-century global economy than just proximity to a market”. He also committed £500m to renew job support programmes set up during the Covid pandemic, after the end of the furlough scheme last month.