Truss urged to keep bank tax cut to boost competitiveness
The UK’s largest financial services trade body has called on Liz Truss to slash taxes on banks in order to return the UK to a more competitive position with the EU and the US. Former Chancellor Rishi Sunak last year announced a cut in the UK bank surcharge on profits from 8 to 3% to offset the effect of a planned increase in Corporation Tax. With the incoming Prime Minister having pledged to cancel the planned increase in Corporation Tax, TheCityUK hopes she could still implement the cut in the bank surcharge. Labour has described the cut in the bank surcharge as a “stealth tax cut for banks” but City veteran David Buik said he would be “mortified” if the bank surcharge cut is scrapped as it would “send the wrong message to global investors”. A Truss spokesperson said the incoming PM’s “bold plan to cut taxes, boost investment and drive growth will ensure we get the economy moving”.
Increase in banking hubs will aid access to cash
More banking hubs will be set up across the UK to help facilitate access to cash. ATM network Link and the Cash Action Group said an additional 13 hubs will be created, bringing the total number planned to 25. The Cash Action Group includes senior representatives from big banks including Barclays, HSBC, Lloyds and NatWest. Some complain, however, that it takes too long to open the hubs. A Financial Conduct Authority spokesperson said: "Firms need to pick up the pace and deliver more banking hubs. We expect this to be done as a priority. Banks and building societies must treat their customers fairly and provide alternatives to branches where needed. Banking hubs are one of a range of tools they can use to ensure communities have easy access to bank services and cash."
UniCredit reveals aid measures for struggling firms
UniCredit said on Monday that it would provide €8bn in loans to Italian households and companies struggling with energy bills. UniCredit said it would offer companies €5bn in new loans with an up to three-year maturity and a grace period of up to six months to help them pay their energy bills. Another €3bn will be made available through payment suspensions and other measures for holders of credit cards and mortgage loans.
Banks brace for potential blackouts in Germany
Banks and other financial services firms are drawing up contingency plans for power outages in Germany this winter, with JP Morgan understood to have prepared a raft of emergency measures so that it can continue trading, including shifting work to London and other European offices. The move comes as Russia further limits gas supplies to Europe, with the Kremlin announcing that the vital Nord Stream 1 gas pipeline will remain shut until Western sanctions are eased.
Credit Suisse expands in Qatar
Credit Suisse is to expand its presence in Qatar via a partnership with the Gulf country's Investment Promotion Agency (IPA Qatar). The move will create up to 100 jobs over the next few years across its wealth management, investment banking and asset management divisions and through the launch of a technology and engineering hub.
Rabobank finds new CEO at BNP Paribas
Stefaan Decraene has been announced as the new chairman of Dutch lender Rabobank. Decraene is currently retail and commercial banking chief at BNP Paribas and will succeed Wiebe Draijer, who last year said he would step down on Oct. 1, 2022.
New car registrations rise slightly in August
New figures from the Society of Motor Manufacturers and Traders (SMMT) show new car sales rose 1.2% last month compared with August 2021, marking the first monthly growth since February. However, sales of new cars during the year so far are 35.3% down on the same period in the pre-pandemic year of 2019.
Vistry strikes £1.3bn deal for Countryside
UK housebuilding giant Vistry Group has struck a £1.3bn cash and shares deal with its smaller rival Countryside Partnerships in a move designed to increase Vistry’s exposure to the partnerships sector. The combined group will be led by Greg Fitzgerald, chief executive of Vistry, which is funding the cash part of the deal through a new debt financing arranged by HSBC, which advised on the deal alongside Lazard. Analysts were positive about the deal, given Fitzgerald’s solid leadership and Vistry’s proven track record with integrating target companies.
Lloyd’s of London says state-backed cyberattack policy is ‘responsible’
Lloyd’s of London has defended its plans to stop providing insurance coverage for state-backed cyberattacks. Lloyd’s chief of markets Patrick Tiernan told the FT that the insurance marketplace is “being responsible” by taking a cautious approach. In a note last month, Lloyd’s explained that the potential for state-backed cyberattacks to spread could create losses that “greatly exceed what the insurance marketplace is able to absorb”. Tiernan said that offering coverage for state-backed attacks would force insurers to hold greater sums of capital, to protect themselves against bankruptcy. However, lawyers warn that it is often hard to determine whether hackers are state-backed or not, due to the nature of cyberattacks. Aaron Le Marquer, a partner at Stewarts, said: “I would be very wary of paying for a policy containing any of these exclusions.”
City grandees call for red tape to be slashed
The Telegraph reviews recent calls made by City lawyer Mark Austin and Michael Findlay, the chairman of the London Stock Exchange, for the Government to tear up a swathe of stock market regulations in order for Britain to reverse its current decline in financial services. Austin, a partner at Freshfields who recently led a Treasury review into capital raisings, says Britain has a “once in a generation opportunity” to overhaul the rulebook that governs London’s listings regime and prevent ground being lost to rival hubs.
FRC issues warning over risk of errors in Revolut accounts
Revolut's annual accounts are facing close scrutiny after the Financial Reporting Council raised concerns that poor audit work had created an unacceptably high risk of errors. Revolut was also separately inspected by Japanese regulators, who on Friday alleged that there were issues with the company's money laundering and terrorist risk management controls.
Sanofi nominates SocGen boss Frédéric Oudéa as chair
French pharmaceutical group Sanofi plans to name outgoing Société Générale boss Frédéric Oudéa as chair to replace veteran private equity executive Serge Weinberg in 2023.
LEISURE & HOSPITALITY
Brewdog boss calls for emergency tax relief
The chief executive of Brewdog has called for emergency tax relief for the hospitality industry as pubs battle the “genuinely existential threat” of rising energy bills. James Watt urged ministers to reverse an increase in employers' national insurance contributions introduced in April and said bars should also be given support in the form of a 50% reduction in business rates for a year, and for VAT to be cut to zero for a year too. State-backed loans should also be offered which pubs could start repaying in a year's time, Watt added.
MEDIA & ENTERTAINMENT
TalkTalk under pressure from growing debts
TalkTalk has been warned by its auditor that it would need to reclassify more of its everyday costs as exceptional in order to meet the covenants on its £1.1bn debt pile. TalkTalk is controlled by the investment fund Toscafund. The broadband provider’s chairman Sir Charles Dunstone is currently in talks to sell the business to the cable operator Virgin Media O2 and is reportedly seeking as much as £3bn including debt - a target price that has drawn scepticism from analysts.
Inflation kept August sales growth in positive territory
Figures from the British Retail Consortium show sales slowed significantly in August. The BRC retail sales monitor revealed that total sales grew by 1% over the month, compared with 3% over the same month last year. It comes after 2.3% retail sales growth in July. Helen Dickinson, chief executive of the BRC, said: “While inflation in retail prices is lower than general inflation at over 10%, this still represents a significant drop in sales volumes.” Elsewhere, Barclaycard revealed that consumer card spending grew by 4.7% in August, representing the smallest uplift since March 2021.
Truss told to act now to save the economy
Business leaders warned Liz Truss on Monday that the new Prime Minister must take swift and bold action on rising costs or the economy will drift into worse territory. The Institute of Directors said members were crying out for clear direction from the Government while Tony Danker, director-general of the CBI, said the circumstances were exceptional and households and businesses required immediate support. Sarah Howard, chairwoman of the British Chambers of Commerce, warned that time is running out and unless Ms Truss addresses the problems head-on, then “the outlook for both businesses and consumers will be bleak indeed.”
MPC member calls for forceful rate rises
A top Bank of England official has said more aggressive rate rises were needed to tame inflation. Catherine Mann, a member of the rate-setting committee, did not rule out a 75 percentage-point increase from the Bank of England at the next meeting. She said: “We need to act more forcefully now to ensure that the drift does not become the norm.”