BANKING
FCA calls for EU pact to support Brexit transition
The Financial Conduct Authority has proposed signing a memorandum of understanding with European regulators so practical solutions for banks and insurers could be put in place well before March 2019. FCA CEO Andrew Bailey said a MOU could be in place by March this year. Without one, derivatives contracts could be closed abruptly after Brexit and data sharing between British and EU firms would breach EU and UK rules. Mr Bailey said there is a growing consensus on both sides that it must be done, and also challenged EU authorities’ claim that a trade deal with the UK could not include financial services, citing a draft chapter of TTIP which included financial services. Mr Bailey said that “broad mutual recognition” on regulations between the UK and the EU could replace the single market passport and ensure financial services trade continued in the long term just as it does today. Meanwhile, Germany is reportedly on track to weaken labour laws for high-earning bankers as part of a push to attract City firms to Frankfurt post-Brexit.
Lloyds to redeploy 465 roles
Lloyds Banking Group has said 465 roles are to be cut, primarily across its commercial banking, information office, risk, community banking, insurance and wealth sectors, leading to the creation of 465 new roles throughout the business. A spokesman said: “The Group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the Group".
Berenberg set for UK boom
Berenberg has claimed that it is set for a UK boom. The privately-owned German bank saw equities revenue jump 69% to €240m (£211m) in 2017. Commission income in the year rose 35% to €343m and profit hit €90m. Berenberg expects to add up to 100 more London staff over the next 18 months as it targets work on an expected UK boom in corporate takeovers and an anticipated spike in demand for equities analysis after the introduction of MiFID II.
Virgin Money bans credit card Bitcoin purchases
Virgin Money has joined Lloyds Banking Group in banning customers from buying Bitcoin and other digital currencies with their credit cards. Like Lloyds, Virgin Money is concerned about customers running up large debts following a sharp fall in the value of digital currencies. Several of the biggest issuers of credit cards in the US, including Bank of America, Citigroup, JP Morgan, Capital One and Discover, have also banned customers from using their cards to buy digital currency.
Customers pay £152 in banking fees
New research shows current account customers paid an average of £152 each in banking fees last year. The study, by savings app Plum, which looked at 11,217 current accounts, found that only 7% paid no bank fees at all. Over half (57%) of the £152 average annual cost to current account customers came from using an overdraft.
PRIVATE EQUITY
Stephen Ross makes $30m bet on cyber security
RSE Ventures has acquired Skout Secure Intelligence for $30m as part of a plan to build a brand that aims to demystify cyber security for SMEs.
Eurazeo merges with rival Idinvest Partners
Eurazeo has merged with Idinvest Partners which will see Idi sell its entire investment in Idinvest Partners to Eurazeo for about €230m.
INTERNATIONAL
Record falls hit Dow Jones
The White House moved to reassure markets on Monday after the Dow Jones Industrial Average dropped by 1,175 points. The leading US stock market index closed down 4.6% at 24,345.75. The fall surpasses a previous record 777.68 points drop on the Dow Jones during the financial crisis in 2008. The White House said: "The President's focus is on our long-term economic fundamentals, which remain exceptionally strong."
Fed puts banks on notice with action against Wells Fargo
Governance experts have suggested that sanctions imposed on Wells Fargo by the Federal Reserve will put pressure on directors of other banks to step up efforts to combat corporate malfeasance.
South Africa fines China Construction Bank over weak laundering controls
The South African Reserve Bank has fined China Construction Bank $6m after uncovering weakness in the state-owned bank’s controls for money laundering and financing of terrorism.
AUTOMOTIVE
UK car sales still falling
Just 163,615 new cars left showrooms in January, according to the Society for Motor Manufacturers and Traders, the worst January for car sales since 2014. Sales of cars made in the UK fell 6.3% in the month. Sales of new diesel cars dropped 25%, with the industry blaming "confusion" over government policy.
Fuel-on-demand start-up secures funding
Zebra Fuel has raised $2.5m (£1.8m) from Zoopla founder Alex Chesterman, Lastminute.com founder Brent Hoberman and Lovefilm founder Saul Klein’s venture capital fund LocalGlobe. The start-up, which has 1,000 customers, delivers diesel from its own fleet of vans to car owners in London.
AVIATION
Ryanair strong amid staff disruption
Ryanair is warning of "localised disruptions" as it begins to recognise unions across the countries it operates in. In a trading update, the airline said profits for the three months to the end of December had risen 12% to €106m (£93.6m), while passenger numbers rose by 6% in the period to 30.4m, and that it was still expecting profits for the full-year to be between €1.4bn and €1.45bn.
CONSTRUCTION
Further job losses at Carillion
A further 452 job losses have been announced as a result of the collapse of Carillion. These job losses are on top of the 377 Carillion workers already being made redundant. However, the Official Receiver said it had been able to safeguard 100 public sector jobs. Meanwhile, Fairfax Financial Holdings is set to take over most of Carillion's Canadian business, including facilities management at airports, hospitals and defence sites
FINANCIAL SERVICES
EU regulator receives wave of responses to CFD clampdown
The European Securities and Markets Authority has said it has had an "unprecedented" number of responses to its proposals to restrict risky leveraged trading among retail investors.
Deutsche Börse makes ground in UK derivatives push
Deutsche Börse has revealed that the notional daily volume at its clearing house Eurex surged to €35bn in January - seven times its total for the whole of 2017.
Insurers accused of delaying injury payments
Personal injury lawyers say they suspect that insurance companies are withholding payouts, in the hope of benefiting from changes to the Ogden discount rate.
LEISURE AND HOSPITALITY
Cineworld crowns Regal deal
Cineworld shares fell yesterday after the firm confirmed plans to buy Regal Entertainment Group. The group, which owns the Picturehouse chain among others, first revealed the $3.6bn (£2.7bn) deal last November and last month announced a fully underwritten rights issue to raise £1.7bn to fund the acquisition.
Simmons Bars set for big expansion
Entrepreneur Nick Campbell has sold his stake in Simmons Bars to private equity firm Lonsdale Capital Partners for £10m. Mr Campbell received a 50% equity stake in exchange for working at the first Simmons site in King’s Cross free of charge, before later buying out the co-owner. Revolution Bars founder Roy Ellis will join as chairman to oversee growth plans.
RETAIL
Booker CEO to take charge of Tesco UK retail arm
Charles Wilson, currently chief executive at Booker Group, will become CEO of Tesco’s UK and Ireland retail and wholesale operations once the companies’ £3.7bn merger is complete next month. Matt Davies, who currently runs the core business, will leave the group at the end of April 2018. The announcement came alongside a Tesco trading update; the supermarket group confirmed that its performance had been in “line with expectations” and that it expects to make £1.57bn operating profit before exceptional items in the year to February 24. It will pay a dividend of 2p a share.
Homebase jobs at risk
Up to 40 Homebase stores could be closed by its Australian owner, putting up to 2,000 jobs at risk. Wesfarmers paid £340m for the DIY chain in early 2016 and has been rebranding the stores under the Bunnings name. However, after a "disappointing" performance the Australian retail group has put Homebase under review and expects it to lose £97m in the first half of 2018. Wesfarmers said it had written down the value of the Homebase chain by £454m as a result of its poor trading. Homebase has 250 stores across the UK and employs 12,000 people. Wesfarmers will announce the result of its review in June.
ECONOMY
Slow services sector growth to stunt economy
The services sector has grown at its slowest pace since September 2016, from 54.2 in December to 53 points in January. Chris Williamson, chief business economist at IHS Markit, said a combination of poor performances in the construction and manufacturing sectors suggests the UK economy will slow to growth of under 0.3% in the first quarter.