Lloyds chief António Horta-Osório to step down next year
Lloyds Banking Group chief executive António Horta-Osório is to step down from the role in June 2021, ending a decade-long tenure that included the lender’s transition back into private hands after its £21bn state bailout during the banking crash. The bank also unveiled Robin Budenberg as its new chairman, replacing Lord Blackwell from next year. The Times reports that some industry-watchers were surprised by Mr Budenberg’s selection, having expected the role to go to Lord Lupton, the former Tory party treasurer who is already on the board. Analysts suggest the likely internal candidates to replace Mr Horta-Osorio include head of retail banking Vim Maru and commercial banking chief David Oldfield.
Raab unveils new sanctions regime
Foreign Secretary Dominic Raab has outlined Britain’s new sanctions regime which will target individuals linked to human rights abuses and will include those involved with the killings of Saudi journalist Jamal Khashoggi and Russian lawyer Sergei Magnitsky. Mr Raab declared that the “thugs of despots and henchmen of dictators” will be prevented from buying property in the UK and laundering their “blood-stained ill-gotten gains” through British banks.
Banks told to invest in tech to ensure cash access
Cash machine maker Diebold Nixdorf has warned that the coronavirus crisis could see cash transactions plummet by 30% over 2020 and drop by another 10% in 2021. However, the company believes ATMs can fulfil a vital role in ensuring communities continue to have access to cash and urges banks to invest in cutting-edge technology to ensure this is the case in a post-COVID-19 world.
UK banks ‘draw up code of conduct’ for coronavirus business loan defaults
UK Finance and the state-owned British Business Bank (BBB) have begun talks with commercial lenders in the hope of setting up industry-wide debt collection standards for government-backed coronavirus interruption loans, amid fears a high proportion of the loans will never be repaid.
What does an M&A boutique do when the deals dry up?
The FT examines how boutique banks are adapting after a seven-year mergers and acquisition boom was brought to a sudden halt by the coronavirus pandemic.
Blackstone’s GSO looking to raise $7.5bn
Blackstone’s credit arm GSO Capital Partners is looking to raise $7.5bn for its fourth subordinated debt vehicle – the GSO Capital Opportunities Fund IV – which aims to invest between $100m to $450m in mezzanine debt for North American and Western European businesses that have enterprise values between $500m and $5bn. If GSO meets or exceeds the $7.5bn target, it will be one of the largest private debt funds ever raised.
Nearly half of European banks hold a negative profit outlook
S&P Global data reveals that 46% of the European banks in its portfolio now hold a negative outlook, up from 14% at the end of 2019. As banks were forced to set aside higher provisions to account for the pandemic, a quarter of the top 35 European banks reported a loss for the first quarter. The rest saw pre-tax profit decline by a third on average year on year, S&P said. It added, however, that there were some positive outcomes emerging from the outbreak, as banks explore new ways of working and customers begin to interact with digital products more frequently.
Commerzbank shares up after bosses quit
Analysts have welcomed news that Commerzbank’s chairman and chief executive would be stepping down later this year with the move reviving predictions of possible sector consolidation. The German bank is considering an aggressive cost-cutting programme following intense pressure from Cerberus, its biggest corporate investor.
Turkey bans six banks from shorting local stocks
Turkey has imposed short-selling bans on six international banks in a move the FT says risks compounding concerns that Turkey has adopted an increasingly hostile approach to overseas fund managers.
Car sales drop a third in June as showrooms open in England
New car sales in the UK fell by more than a third in June compared with a year earlier, the Society of Motor Manufacturers and Traders has reported. A total of 145,377 cars were sold in the first month that showrooms began to open after the coronavirus lockdown, compared with 223,421 in June 2019. The latest drop means UK sales for the first six months of the year were roughly half the 2019 total. Some 653,502 cars were sold between January and June this year, compared with 1.3m in the same period last year.
UK construction sector rebounds but job losses mount
UK construction activity rebounded more than expected in June as the economy reopened, according to the IHS Markit/Cips UK Construction purchasing managers’ index, which rose to 55.3 in June, from 28.9 the previous month. “House building led the way with the fastest rise in activity for nearly five years, while commercial and civil engineering also joined in the recovery from the low point seen in April”, said Tim Moore, economics director at IHS Markit. New business volumes increased marginally in June, marking the first expansion since the outbreak. However, the index measuring business expectations for the year ahead remained historically subdued and businesses reported falling jobs numbers.
Aviva CEO steps down with immediate effect
Aviva chief executive Maurice Tulloch has stepped down from the role with immediate effect for “family health reasons”, and has been replaced by non-executive director Amanda Blanc. Mr Tulloch exits after slightly more than a year in the job; the firm revealed a record full-year operating profit of £3.18bn in March but later revealed warned that coronavirus could cost it as much as £160m.
Financial services saw volumes slump at fastest pace on record
A new survey of the financial services sector reveals that volumes fell at their fastest pace on record during the lockdown while jobs were cut at the fastest pace in a decade. Business volumes fell by 12% on average and profitability slumped at the fastest rate since the financial crash. General insurance companies were the only sub-sector to defy the downturn.
LEISURE & HOSPITALITY
BFI chief: £1.57bn support package ‘will help independent cinemas reopen soon’
The head of the British Film Institute (BFI) has praised the Government for announcing its £1.57bn support package for the arts, saying it is “very welcome news for our independent cinemas”. “Today’s announcement will help many of them to reopen soon and safely for audiences and staff, and bring communities and film lovers together again”, said Ben Roberts. “We are grateful to the Government for recognising the importance of our film culture”.
Pret to close 30 stores and cut over 1,000 jobs
Pret A Manger has announced it will permanently close 30 of its 410 UK stores as part of a restructuring. The high street sandwich and coffee chain said that the COVID-19 pandemic had caused a 74% year-on-year decline across its British estate and that job losses "could be 1,000-plus" unless it reached sales of 50% to 60% of pre-coronavirus levels by September.
Sunak to spend £3bn on green projects
Rishi Sunak will set aside £3bn to create green jobs and improve the energy efficiency of public buildings when he announces plans to kickstart the economy on Wednesday. As much as £2bn will be set aside for a green homes grant which will give households vouchers to spend on energy efficiency schemes such as loft lagging and floor insulation. The Chancellor’s package would include a new £40m fund dedicated to cleaning up nature and planting trees which would back up to 5,000 new jobs, the Treasury said.