BANKING
Opinion: Banks should not be recommending UK climate policy
Writing in the Independent, Donnachadh McCarthy criticises the participation of banking executives on the UK Government’s Climate Change Committee (CCC), arguing that they are not independent as evidenced by the omission of the fact that Barclays, HSBC and RBS have been among the top banks in the world for funding new fossil fuel projects. The latest CCC carbon budget also failed to recommend state investment in zero carbon projects, favouring the private sector, a position McCarthy considers “ludicrous” considering the current historic low interest rates. McCarthy concludes that, “the CCC’s work is too important for the future safety of the British public and nature, to be repeatedly enmeshed in damaging unnecessary conflicts of interests.”
Manx job losses 'reflect global challenges'
The loss of 120 jobs at Lloyds Bank on the Isle of Man "reflects the challenges that the banking sector has been experiencing globally", the treasury minister has said. A Lloyds spokesman said changes were being made as more people switched to online or mobile banking. Alfred Cannan said increasing digitisation in banking was "bound to have an impact" on future staffing.
PRIVATE EQUITY
Astia venture fund for female-led growth firms launched
A venture capital fund aimed at firms with women in executive positions has been launched by Silicon Valley company Astia. CEO Sharon Vosmek commented: “There is a great deal of talk about inclusion and women within venture capital, but VCs need to do what they do best – invest. With this new fund, Astia systemically invests in under-invested, yet out performing companies – where women are rightly in positions of power, equity and influence. Not just because it’s the right thing to do, but because it creates better companies and delivers stronger returns.” The firm has invested more than $27m in firms sourced by its Astia Expert Sift process.
TDR takes fourth shot at Arrow Global
TDR Capital has issued another offer for Arrow Global - its fourth approach – raising its offer to 305p a share. Arrow buys defaulted customer accounts from retail banks and credit card companies. Analysts at Jefferies said: “Although an approximately 32% premium to the current price, 305p is only 3% above early 2020 levels and is below our valuation of 420p.”
SoftBank’s Vision Fund posts best quarter since launch in 2017
Japanese technology giant Softbank reported a $13bn gain in its Vision Fund investments in the final quarter of 2020, thanks to the bull run on the US stock market. The figures reflect a dramatic turnround following a turbulent 12 months for Masayoshi Son’s group.
INTERNATIONAL
Swiss bankers play fintech catch-up
The FT examines how Swiss banks UBS and Julius Baer are among the traditional wealth managers looking to invest in fintech and digitisation to cut costs and serve their clients more efficiently.
Italy set to approve Credit Agricole's bid for Creval
The proposed takeover of Credito Valtellinese (Creval) by Credit Agricole Italy is set to be approved by the Italian government, according to sources.
AUTOMOTIVE
Talks between Hyundai and Apple called off
Hyundai and Apple have broken off talks about producing autonomous vehicles sending Hyundai shares down 6.2%. In a statement, Hyundai said: “We are receiving requests for co-operation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided.”
AVIATION
Airbus could prolong summer shutdown
Airbus has confirmed that it is monitoring developments and could shut down its plants for longer than usual this summer if conditions in the aerospace sector worsen because of coronavirus.
FINANCIAL SERVICES
Bailey takes responsibility for regulatory failings at LC&F
The Governor of the Bank of England, Andrew Bailey, has told MPs that he takes responsibility for regulatory failings over the London Capital & Finance investment scandal, which left more than 11,000 investors with losses of up to £237m. Mr Bailey told the Treasury Select Committee that he did not personally have knowledge of the problems at LCF until the point it went into administration. “My personal involvement did not begin until then,” he said. He acknowledged that a key problem had been a failure to act on phone calls raising concerns about LCF. However, he said the call centre was receiving about 200,000 calls a year. “The red flags were buried in the 200,000 calls … There was no proper system for extracting that information.” An independent report last year by Dame Elizabeth Gloster said Bailey and the FCA’s executive committee were responsible for deficiencies that led to LCF’s collapse. However, Mr Bailey told the Treasury Committee that he “fundamentally disagreed” with Gloster’s findings. “She sort of suggested to you that if only we had told the staff to pull their socks up, the problem would have gone away,” he said.
ICE to shift EU carbon trading from London to Amsterdam
Intercontinental Exchange is to move carbon contracts to its ICE Endex exchange in the coming months, as the UK’s departure from the EU continues to affect the financial services industry.
UK fractional investing firm Wombat sees increased interest
UK-based fractional investing firm Wombat has raised £2m as amateur investment becomes more popular amid lockdown restrictions. Meanwhile Tickr, another British investment app focusing on impact investment, announced recently that it had raised £2.5m in investment from Ada Ventures.
LEISURE & HOSPITALITY
Restaurants in UK continue to suffer under lockdown
The top 100 UK restaurant groups saw losses increase 112% to £517m in 2020, as coronavirus-related restrictions continue to damage the sector. Trade association UK Hospitality is calling for more assistance from the government, specifically an extension of the reduced 5% rate of VAT until the end of the year.
The Fulham Shore plans to expand when restrictions lift
The Fulham Shore, owner of restaurant chain Franco Manca, is believed to be in talks for new sites across the UK amid plans to expand when lockdown is eased. The firm is in negotiations with HSBC to extend its £14.75m revolving credit facility, and has fully drawn down a £10.75m loan provided under the Government’s coronavirus programme. Net debt before lease liabilities at the firm was £5.7m, down from £9.5m last March.
REAL ESTATE
London rents drop following exodus of workers
A fall in the British population over the last year could trigger a sharp fall in house prices, particularly in London and the Midlands where there has been a “mass exodus” of foreign workers since the pandemic. Capital Economics said rental markets are showing signs of strain, with landlords reducing rents amid a “huge rise” in vacancy rates.
RETAIL
Boohoo to buy Burton, Dorothy Perkins and Wallis brands for £25m
Boohoo has agreed to buy Burton, Dorothy Perkins and Wallis out of administration, marking the final stage in the break-up of Sir Philip Green’s Arcadia fashion group. The £25.2m deal to buy the three remaining brands out of administration does not include any of their 214 UK stores, putting about 2,450 jobs at risk. Approximately 260 jobs will be moving with the brands to Boohoo, mainly head office functions such as brand design, buying and merchandising, and the digital part of the business.
Samarkand £50m London float announced
UK e-commerce platform developer Samarkand is floating shares on the Aquis exchange in London valuing it at some £50m as the firm seeks to expand in China. In the year to March 2020, revenues at the firm were £6.8m, an increase from £4.5m in the year earlier period, with underlying profits of £2.3m in the following eight months.
ECONOMY
Economy will take two years to bounce back
The National Institute of Economic and Social Research has warned that the economy will take another two years to recover from the pandemic. The think-tank said that GDP would expand by only 3.4% in 2021, down from an earlier forecast of 5.9%. It blamed “uncertainty about the path of the virus and the effectiveness of vaccines against strains.” Hande Kucuk, a deputy director at the institute, said that by 2025 the economy would still be about 6% lower than it would have been had COVID-19 never hit. The NIESR added that people would hold on to their savings because of fears about the economic outlook. Meanwhile, unemployment would rise as the job retention scheme ends. The jobless rate is expected to hit 7.5%, or 2.5m.
UK consumer spending slumps during latest lockdown
Consumer spending fell in January at the fastest rate in seven months, according to Barclaycard. Overall consumer spending shrank by 16.3% in year-on-year terms last month - much sharper than the 1.9% fall in November. Raheel Ahmed, head of consumer products at Barclays, said: “As the impact of the latest lockdown start to takes its toll, we’ve seen particular sectors struggle, as physical premises across the UK were forced to close.” Spending in supermarkets was up 17% while online spending rose 73% compared with January last year.