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Daily News Roundup: Tuesday, 7th April 2020

Posted: 7th April 2020

BANKING

HSBC UK mortgage deposit range still taking applications

HSBC UK has said it will continue to take applications for mortgages across its full range of deposit sizes, with Michelle Andrews, the firm’s head of buying a home, explaining: “Our mortgage range across all LTVs is still available and open for applications, and we aren’t seeing upward pressure on pricing.” She went on: “We will look to make the most of technology and utilise desktop and automated property valuations where we can, and, where this is not possible due to limitations on physical valuations, such as lending above 90% LTV and new-build properties, these applications will be put on hold until we can take them forward.” This comes after Nationwide Building Society announced in March that it was temporarily withdrawing its mortgage offering for low-deposit borrowers, while Barclays also said last month that some products had been pulled.

BBB blamed for delays to small business loans

The British Business Bank (BBB) has come under fire from high street banks which say the Treasury-appointed body responsible for overseeing the coronavirus loans scheme is applying over-complex rules for loans, leading to a logjam. Banks have to book loans with the BBB but they say the process is too detailed and should be simplified, with the business bank given audit rights to assess the loans once they’re paid out.

Lloyds staff reveal long hours as demand surges

Staff at Lloyds bank have told trade union BTU that they are putting in 18-hour days in an effort to deal with demand from small business owners desperately trying to save their enterprises. They also report fears over offices being inadequately cleaned after employees are forced to self-isolate. However, most Lloyds workers are doing their job from home and think it is going well with senior managers being supportive, BTU said.

Nationwide slashes savings rate

Nationwide Building Society's flagship Flex-Direct current account, which has been paying 5% interest on balances up to £2,500 for the first 12 months, is to cut interest to 2% on balances up to £1,500 for the first 12 months. After that period, the rate will revert to 0.25%. But Rachel Springall, of Moneyfacts.co.uk, said the new 2% rate will still be an "attractive return".

HSBC tells investors to email AGM questions

HSBC has told shareholders they will not be able to attend the bank’s AGM due to social distancing measures and the ban on non-essential travel. HSBC has moved the meeting to the lender's headquarters in Canary Wharf where just “a limited number of directors and essential personnel” will be present. Investors are invited to email questions for the board ahead of the event.

Banks cancel overdraft charges

Santander and the Co-op Bank have announced that customers with an arranged overdraft will pay no interest when borrowing up to £500 over the next three months to help them through the coronavirus crisis. HSBC and Virgin Money are also offering interest-free overdrafts of £500 while Lloyds is offering zero interest on borrowing up to £300.

Not enough fraud victims reimbursed, regulator says

The Payment Systems Regulator has complained that just 41% of losses suffered by victims of bank transfer fraud were reimbursed in the second half of last year, a figure deemed "well below" expectations.

PRIVATE EQUITY

Advent eyes once-elusive takeover targets amid crisis

US private equity firm Advent has started talks with “global leaders” about possible deals as the firm seeks to take advantage of rock bottom share prices brought on by the coronavirus crisis.

Ministers eye rescue package for start-up industry

The Treasury is considering how to support start-ups as venture capital backers warn many are not eligible for the government-backed loan scheme because they are loss-making.

INTERNATIONAL

HSBC could face legal action in wake of dividend suspension

After HSBC abandoned its dividend last week, shareholders in Hong Kong are seeking a meeting with management amid reports that legal action is being considered. Chief executive Noel Quinn had stated: “We profoundly regret the impact this will have on you, your families and your businesses. We are acutely aware of how important the dividend is to our shareholders in Hong Kong.”

Wells Fargo intensifies bid to remove asset cap

  1. Fargo has reached its limit for small business lending and unless regulators allow the bank to expand its balance sheet it will not be able to cope with demand.

JPMorgan considers historic dividend suspension

JPMorgan Chase CEO Jamie Dimon warned yesterday that the bank could suspend its dividend for the first time if the coronavirus crisis brings about a major recession, as some predict.

AUTOMOTIVE

New car sales for March down 44%

The Society of Motor Manufacturers and Traders has announced that new car sales were down 44% last month, with 255,000 vehicles sold in the UK in March compared with 458,000 12 months earlier. Mike Hawes, chief executive of the trade group, commented: “With the country locked down in crisis mode for a large part of March, this decline will come as no surprise,” continuing: “This is a stark realisation of what happens when economies grind to a halt. How long the market remains stalled is uncertain, but it will reopen and the products will be there.”

AVIATION

EasyJet spat rumbles on with executives at risk

Founder of easyJet Sir Stelios Haji-Ioannou has warned that the firm could run out of cash by August, as he escalated a row with the airline over its failure to cancel a £4.5bn order from Airbus by announcing that he would seek the removal of chief financial officer Andrew Findlay and non-executive director Andreas Bierwirth. EasyJet has secured a £600m loan from the Treasury and Bank of England's emergency coronavirus fund and said it would also borrow another $500m (£407m) from commercial creditors to ensure its liquidity.

Rolls-Royce keeps disaster at bay

Rolls-Royce shares rose yesterday after the aircraft engine-maker drew down one £2.5bn credit facility and secured another one of £1.5bn to boost overall liquidity to £6.7bn.

CONSTRUCTION

UK construction down as virus spreads

The IHS Markit purchasing managers’ index for construction in the UK has revealed that activity in the sector fell at the fastest pace since 2008 last month. Andrew Wishart, UK economist at Capital Economics, observed that: “The PMI is pretty much guaranteed to deteriorate further in April as the full effect of the lockdown is captured,” having earlier predicted a 15% contraction in gross domestic product in the second quarter.

FINANCIAL SERVICES

Second investment trust fires Barnett

Perpetual Income & Growth Investment Trust has sacked Invesco “following an extended period of underperformance” in the latest blow for fund manager Mark Barnett, whose performance also led to the loss of the Edinburgh Investment Trust in December.

Investors prepare legal action over disputed margin calls

Lawyers say investors stung by banks and wealth managers that liquidated clients’ margin loans when markets plummeted as the coronavirus struck are preparing legal action in an attempt to recover losses.

HEALTHCARE

NMC attempts to fight off administration

NMC Health has promised a boardroom shake-up after creditor Abu Dhabi Commercial Bank last week applied to the High Court for administrators to take over. The London-listed private hospital group said it was in discussions with ADCB and other lenders to have the application withdrawn.

GSK buys $250m biotech stake in hunt for COVID-19 treatment

GlaxoSmithKline has bought a 6% stake in San Francisco-based start-up Vir Biotechnology which is developing antibodies that could be used to treat coronavirus.

LEISURE & HOSPITALITY

GVC dividend cancelled as firm reappraises virus impact

GVC’s interim dividend has been cancelled as the coronavirus pandemic continues, even as the betting firm reduced the amount of financial damage it expects to incur as a result of the crisis. Chief executive Kenneth Alexander remarked: “We are responding decisively, and have put in place a range of measures to keep our people safe, strengthen our financial position, limit cash outflow, preserve jobs and maintain a compelling customer offer.”

P&O Ferries close to collapse

The owner of P&O Ferries is attempting to secure a bailout deal with the UK government as the company struggles to stay afloat. Dubai-based DP World is willing to put fresh capital into the business but ministers are said to be reluctant to contribute £150m from taxpayers.

MANUFACTURING

Babcock awarded ventilator contract from government

The government has awarded engineering firm Babcock a contract to manufacture 10,000 ventilators as part of its response to the coronavirus crisis, with the company also announcing: “We will consider the use of government programmes to help manage areas of inactivity where they exist and we have postponed the annual pay increase for the senior management team.”

MEDIA & ENTERTAINMENT

BT, Verizon and Virgin Media raise pay for frontline workers

BT, Verizon and Virgin Media are among the telecoms groups raising wages and expanding workforces as demand for broadband soars amid the COVID-19 crisis.

RETAIL

Debenhams appoints administrators ‘to avoid legal action’

Debenhams has appointed administrators after the coronavirus lockdown forced it to shut its shops across the UK. The chain described the move as a “necessary step” to protect it from the threat of legal action from creditors while its department stores are closed.

ECONOMY

Global markets cheered as virus spread slows

Signs that death rates from COVID-19 were stabilising in Italy, Spain, France and New York state helped rally global markets yesterday. Analysts at Capital Economics said: "While it is too soon to know for sure if the pandemic has reached an inflection point, this is encouraging. We have argued that stock markets will experience a sustained rebound only when the spread of the virus slows around the world."

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