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Daily News Roundup: Tuesday 6th November 2018

Posted: 6th November 2018


Lloyds Bank to cut 6,000 jobs but create 8,000

Lloyds Banking Group is planning a major restructuring of its workforce as it refocuses its operations on digital technology. The high street lender is expected to cut 6,000 jobs and create 8,000 new ones over the next two years. The losses will be spread across divisions like corporate and retail banking, while new positions will be created within areas focused on digital services. It has been reported that staff whose jobs are affected by the plans will be able to apply for the new roles being created. Union Unite said it will “scrutinise the detail” of the plan once it is officially announced, adding: “Our priority will be to press the company to ensure there are no compulsory redundancies.” It is believed the plans do not involve branch closures.

RBS launches digital lender for small business

Royal Bank of Scotland has launched standalone digital bank Mettle. It opens today in a pilot for a limited number of customers, offering a business-focused current account alongside services including invoicing and cash flow forecasting.

Eisman bets against UK banks

Hedge fund manager Steve Eisman is betting against two British banks in anticipation of a no-deal Brexit, saying banks exposed to the British economy would see the biggest hit from a resulting economic downturn. Mr Eisman has declined to name the two banks he was shorting but traders have speculated that the targets could be Metro Bank and CYBG, noting that the challengers are the two most shorted banks in the FTSE 350.

Lenders limiting easy access accounts

Research by Moneyfacts shows that almost a third of no-notice, easy access accounts either revert to a lower paid account after 12 months or contain a withdrawal restriction or bonus cap. The analysis shows that in November 2016, 23% of accounts carried limits, compared to 25% in 2017 and 32% in November 2018. Charlotte Nelson at Moneyfacts comments: “Providers are carefully thinking about how much money they can handle, and are choosing to put limitations in place so they don’t end up having to pay out too much over the long term.”


Carlyle scales back UK investments over Brexit uncertainty

Due to uncertainty over the terms of Brexit, US private equity group Carlyle has scaled back investment in the UK, according to its co-founder David Rubenstein.

Draper Esprit riding tech start-up wave

VC firm Draper Esprit has seen the value of its portfolio increase 45% in the last six months, to £354m, as investments in AI chip start-up Graphcore among others pay off. Operating profit nearly doubled, from £18.7m to £37.9m compared to the same period last year.


Commissioner: Danske money laundering is Europe’s biggest scandal'

Věra Jourová, the European commissioner for justice, says the €200bn (£178bn) money-laundering case at Danske Bank’s Estonian branch is “the biggest scandal” in Europe. She said she wants to uncover how executives and regulators missed the activity, saying: “I want to understand better where the main errors happened, whether it was purely a fault of the due diligence done by the bank itself or whether there was some mistake of the supervisory authority.” Denmark’s prime minister Lars Løkke Rasmussen has vowed to take further action against the bank and its executives over the “frankly quite horrible” scandal.

The Guardian

Goldman tracking ahead of 2020 goal

Goldman Sachs’ CFO Stephen Scherr says a revenue-boosting plan has delivered $2.5bn so far in 2018, meaning the firm is tracking ahead of its goal to generate $5bn in additional annual revenue by 2020. "While we are meeting our objectives, these initiatives are not the limit of our ambition,” he noted. Mr Scherr also said Goldman will review each business line, looking at their revenue potential and expense base before “very clinically” assessing if it is “meeting its cost of capital."

Citigroup names John Dugan as chairman

Citigroup has announced that John Dugan, a former comptroller of the currency, will replace Michael O’Neill as chairman when Mr O’Neill retires at the end of the year.

Handelsbanken to create London jobs

Handelsbanken has acquired a new UK banking licence to ensure that it can continue operating without interruption after the UK leaves the EU. The Swedish bank has established a full subsidiary in the UK and says it will create 100 new banking jobs in London after Brexit.

Portuguese bank to buy SocGen’s Polish arm

Société Générale’s Polish subsidiary, Euro Bank, is to be bought by Portuguese lender Millennium for around $485m as SocGen seeks to execute its “strategic and financial plan”.

Malta bank has licence revoked

Pilatus Bank, a Maltese bank whose chairman and owner, Ali Sadr Hashemi Nejad, has been charged in the US over money-laundering and fraud allegations, has had its licence withdrawn by the European Central Bank (ECB). The Malta Financial Services Authority said the ECB had acted on its request to close the bank.

Iranian banks see US sanctions

The US Treasury has targeted more than 70 Iranian financial institutions in a fresh round of sanctions, including Bank Melli, with the US saying the measures are linked to “destabilising behaviour” and concerns over international terrorism.

Probe into Chinese buying Greek villas on credit cards

Greece’s central bank is investigating several credit transactions by Chinese citizens buying property through National Bank of Greece and Eurobank, saying they potentially violate Chinese regulations on capital movement and laws on Greece’s golden visas.


EasyJet claims no flight disruption after Brexit

EasyJet’s Chief Executive Johan Lundgren has claimed that Britain’s exit from the European Union next year should not lead to flight disruption, even in the case of a no-deal. It follows comments from Ryanair that if there is a no-deal Brexit, UK flights could be grounded for up to three weeks.

Icelandair to acquire rival Wow in $25m all-share deal

Icelandair is snapping up Iceland-based Wow Air in an all-share deal worth $25m. Bogi Nils Bogason, interim president and chief executive of Icelandair, said the brands would continue to operate under their own names.


Ferrari profits rise

Ferrari has seen profits climb 5% in Q3, with earnings rising €278m in the three months to September from €266m the year before. The supercar manufacturer has not updated its full-year earnings guidance, saying it expects earnings before tax and other items to hit €1.1bn in 2018.


Financial services deal close

Financial services minister John Glen has claimed that a deal for the industry will be “imminently” secured with the EU. "There is common ground. That is why we are increasingly positive on the expectation of reaching a deal,” Mr Glen said. Britain is hoping for an improved version of the EU's equivalence system, which allows foreign firms to trade in the EU if their rules are aligned to those in the union. The comments from Mr Glen come days after Theresa May denied reports that a Brexit deal to provide financial services firms access to European markets is almost secured.

Hiscox predicts slower end to the year as premiums grow

Hiscox has warned that growth could slow towards the end of the year, as it revealed that gross written premiums for the nine months to September were $3.04bn (£2.34bn), a 14% increase on the same period last year. Chief executive Bronek Masojada commented: “We have had strong growth, but as the market remains challenging, we will remain disciplined, and I expect our growth to moderate over the balance of the year.”

Ping An sets sights on China growth

Peter Ma, founder of Ping An, has ruled out a big overseas acquisition in the near future, saying it will focus on its domestic market as China “has the best growth prospects."

Churches not competing with lenders

Despite Archbishop of Canterbury Justin Welby saying in 2013 that the Church would look to compete with payday lenders and drive them out of existence, figures show that just 8.8% of Anglican churches have any involvement in social financial projects or offer debt advice, while only 2% run advice or lending operations.


Wasabi seeks cash injection to fund expansion

Sushi chain Wasabi is seeking a cash injection to refurbish and expand its UK portfolio and is seeking a minority equity partner to help to drive its US expansion.


Kennedy switches to ITV

Chris Kennedy, who previously worked with ITV chief executive Carolyn McCall at easyJet, is to work with her again after agreeing to join the broadcaster as its finance director, moving from software firm Micro Focus. He is replaced at Micro Focus by Brian McArthur-Muscroft, most recently finance chief at Paysafe.


Denmark’s PFA Pension shuns UK property

One of the biggest Nordic pension funds says it will not raise its exposure to the UK real estate market thanks the a risk of a no-deal Brexit. Anders Damgaard, chief financial officer at the $113bn PFA Pension fund in Copenhagen, said the UK now looks “particularly risky, as the fund shifts its strategy to more direct investing. “I think everybody’s working under the assumption that it will be a hard Brexit,” he added.


Services slowdown

The UK’s service companies grew by their slowest pace in seven months in October, according to IHS Markit's Purchasing Managers' Index (PMI). The PMI for services fell from 53.9 to a seven-month low of 52.2, below City expectations of 53.8. A reading above 50 indicates growth. Optimism levels among UK executives also fell to their lowest point since July 2016.

New probate fees will cost some estates £6k

The Government is pushing ahead with plans to raise probate fees by up to 3,770%. The proposals will see estates worth £2m or more pay £6,000 in probate fees, up from £155 currently. However, the increase is a reduction on the original plans, which would have seen a bill of £20,000 for the largest estates. Estates with a value of between £1m and £1.6m will have to pay £4,000. The Government estimated the move would raise £185m a year by 2022/23.

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