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Daily News Roundup: Tuesday 8th May 2018

Posted: 8th May 2018

BANKING

Union threats on TSB bonuses

Mark Brown, general secretary of TBU, which represents thousands of TSB employees, has advised the chairman of TSB's remuneration committee in a letter that “given the current shambles, neither 'TSB chief executive' Mr Pester nor any member of the bank's executive committee should get any performance bonuses whatsoever for 2018”. The union has threatened legal action against the lender should bonuses be paid. The statement follows a high-profile IT disaster which saw customers locked out of their accounts. The Guardian reports that the problem has extended into a third week.

Barclays boss meets activist in showdown over trading

Amid fears in the City that hedge fund boss Edward Bramson wants Barclays to restructure its investment banking arm, he is due to meet with the bank’s chief executive Jes Staley this week. This follows Ian Cheshire, chairman of Barclays' retail bank, saying last week that the firm had contacted its top 20 shareholders, and concluded that they support the current strategy.

HSBC promises cash payout despite profits fall

Despite reporting a 4% fall in first-quarter profits to $4.8bn, HSBC has promised to return more money to shareholders, beginning a $2bn share buyback.

MPs to question RBS boss on branch closures

SNP MP Deidre Brock has warned Ross McEwan, chief executive of Royal Bank of Scotland, that he “still has plenty of questions to answer”, ahead of an appearance before a Westminster committee today over controversial branch closures.

The Scotsman, Page: 6 Press and Journal, Page: 13

Virgin to consider £1.6bn bid from CYBG

CYBG has made a £1.6bn bid for Virgin Money, which would create an enlarged group with around 6m customers and a loans book of around £68bn.

C. Hoare & Co replaces owners with 32-year-old partner

Rennie Hoare, C. Hoare & Co’s 32-year-old head of philanthropy, is to be appointed one of six shareholding "partners" next month, replacing two of the bank’s octogenarian owners.

More PPI compensation claims for banks

Lawyers have said customers mis-sold payment protection insurance could qualify for an extra £18bn in compensation.

PRIVATE EQUITY

KKR tax structure to change

KKR has said it will abandon a partnership structure seen as unwieldy for investors, but which has helped to shield some of the firm’s profits from tax.

INTERNATIONAL

Further ground lost by Euro lenders against US competitors

With HSBC, Société Générale and BNP Paribas reporting lacklustre trading in their investment banking divisions, European lenders lost out to US rivals in the first quarter.

Wells Fargo recruitment plan

Wells Fargo's investment banking arm plans to take on hundreds of staff this year, with the securities division continuing to expand.

Radical bank proposal poised for rejection in Switzerland

A Swiss national referendum to be held in June looks set to see radical proposals meant to change the way banks provide loans rejected decisively.

AUTOMOTIVE

Car market still in decline despite sales rise of 10%

Car sales in the UK increased more than 10% in April compared to a year earlier, largely due to vehicle excise duty changes, but the Society of Motor Manufacturers and Traders says the market is still in decline.

AVIATION

Credit card groups face airline ticket challenge

The airline industry and Deutsche Bank are taking on credit card companies with the launch of an electronic real-time payment network for air tickets that aims to combat transaction fees.

FINANCIAL SERVICES

Wave of M&A sees Numis double profits

Numis Corporation's pre-tax profit increased by 86% to £19.5m in the first half of its financial year, with fees from merger and acquisition advice growing by more than 75% to £50.9m in the six months to the end of March. Co-chief executive Alex Ham commented: "Our pipeline, and there is a lot in it, suggests there is more M&A to come… We have been busy and this is continuing into the second half of the year."

Gramercy to be bought by Blackstone for $7.6bn

Gramercy Property Trust has announced that it is to be bought by investment firm Blackstone for $7.6bn (£5.6bn), with the former’s chief executive Gordon DuGan commenting: “We are very pleased to enter into this transaction. We believe this validates the quality of the portfolio and platform that we have built. Entering into this transaction with Blackstone fulfills our board of trustees' mission to maximize shareholder value.”

Buffett's Berkshire suffers $1bn loss after accounting change

Berkshire Hathaway suffered a $1.1bn loss at the start of 2018 due to new accounting rules that meant the group had to include unrealised gains and losses on its investment portfolio as part of its earnings.

Clock is on Martin Gilbert to quit Sky or Glencore boards

Martin Gilbert, co-chief executive of Standard Life Aberdeen, is under pressure to resign from one of his NED roles at either Sky or Glencore, or continue to be in breach of the Financial Reporting Council’s Code.

Fund giants accused of withholding diversity data

BlackRock and other asset management giants have been accused of withholding data on the gender and ethnic make-up of fund boards, leading to charges of double standards.

Elliott Management makes offer for Athenahealth

Elliott Management has made an all-cash offer for Athenahealth valuing the healthcare software manufacturer at approximately $6.9bn (£5bn), including debt.

Website upgrade interferes with investor portfolio management

Problems with a website update at Halifax Share Dealing, the stockbroking arm of the bank, resulted in some investors struggling to log into their accounts with others left unable to buy shares or access the research centre.

Jupiter offers new parents 6 months’ paid leave

Jupiter Asset Management has begun offering men and women six months’ fully paid parents’ leave and has set up online coaching for parents to help them leave and return to work.

Brompton turns to crowdfunding for bike hire scheme

British fold-up cycle maker Brompton Bikes is seeking to raise £2.5m through private funding platform Envestors and Crowdcube. CEO William Butler-Adams argued private equity and venture capital funding were too focused on fast gains.

Financial Times

AllianceBernstein to move to Nashville

AllianceBernstein has selected Nashville, Tennessee for its new headquarters as US asset managers take radical steps to seek locations with cheaper taxes and housing.

SoftBank discussions over Swiss Re stake close to collapse

Discussions between Swiss Re and SoftBank over the latter taking a minority stake in the reinsurance company are close to collapse, despite three months of talks.

Investor urges improved Apollo bid for FirstGroup

An investor has called for Apollo Management to rebid for FirstGroup, after the latter revealed last month it had rejected an offer which it said "fundamentally undervalues" the transport firm.

LEISURE AND HOSPITALITY

Tip strike at TGI

TGI Fridays waiting staff are to take part in Britain's first strike over tips after ballots at the Milton Keynes and Covent Garden branches of the restaurant chain supported industrial action in protest at a new policy which would see 40% of service charge payments paid on credit and debit cards distributed to back-of-house staff.

MEDIA AND ENTERTAINMENT

Vote over control of Telecom Italia sees Vivendi lose investors

After a majority of shareholders voted to support a plan from Elliott Advisors for an alternative set of directors, Vivendi has lost control of the board of Telecom Italia.

Antidote to toxic Facebook newsfeed sought

With criticism growing over Facebook’s "toxic" newsfeed, the firm is searching for new opportunities, focusing on its Instagram, WhatsApp and Oculus subsidiaries, alongside a dating service.

REAL ESTATE

Sales of £1m homes defy slump

A huge market surge in the north of England has driven an increase in the number of British homes sold for £1m or more, Lloyds Bank has reported. Louise Santaana, head of wealth lending at the lender, commented: “Overall, 2017 was slow for the UK economy, with high inflation and low wage growth. But high-end homeowners and investors in many parts of Great Britain are starting to regain their confidence, with exceptional growth seen in Yorkshire and the Humber and north-west England.”

FCA warns over mortgage prisoners

The Financial Conduct Authority says there are 30,000 mortgage prisoners trapped in expensive deals which they took out before the financial crisis. It warned that some who qualified for loans in the past may not qualify now due to tougher affordability tests. These borrowers could save thousands every year due to current low interest rates but are unable to remortgage.

RETAIL

Sports Direct launches court proceedings against House of Fraser

Sportswear retailer Sports Direct has launched court proceedings against House of Fraser arguing that the firm has been “repeatedly denied information” regarding HoF’s dealing with two Chinese companies. Sports Direct subsidiary West Coast Capital says it has been “frozen out” of a deal that will see C.banner, the Chinese owner of Hamleys, take majority ownership of HoF and oversee a CVA programme.

ECONOMY

Bank of England expected to postpone rate rise

Analysts expect the Bank of England to row back on plans to raise rates this week after figures showed inflation was falling and economic growth had weakened. James Smith, an economist at ING, says a rise now “could be one headwind too many for the faltering consumer-facing sector.” Separately, credit rating agency Fitch has warned that British households are borrowing more money than they are saving for the first time since the 1980s.

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