BANKING
Credit card borrowers stay in debt for longer than previously thought
New research suggests that credit card and personal loan borrowers tend to remain indebted for longer than the Bank of England previously thought. In its Financial Stability Report from June 2017 the Bank had pointed out that the stock of consumer credit turns over much more rapidly than the stock of mortgages for house purchase. However, new research conducted in a partnership by the Bank with the Financial Conduct Authority shows that 89% of the total outstanding stock of consumer debt in November 2016 was held by people who also owed debt two years earlier. The researchers said that the implication of these findings is that regulators should not be reassured when they observe rapid repayments of debt on specific credit products at particular lenders, since often the borrower would merely be shifting the debt to another provider.
Banking job losses may be light, City suggests
British banking, insurance and asset management job losses to the European Union over Brexit may not be as heavy as initially feared, according to Jeremy Browne, the City’s EU envoy. “It may end up for quite a lot of them being a bit less dramatic than it might appear,” Mr Browne said on Monday as Britain embarks on a new phase of talks with the EU over its exit. The City expects 5,000 to 13,000 job losses among the 1.1m people employed in the sector across Britain, echoing the 10,000 losses the Bank of England said is plausible on “Brexit Day” in March 2019. Separately, Spanish bank Alantra Partners SA is reportedly seeking new offices in the City and is considering how many staff to relocate to the UK if the move goes ahead.
MPs challenge Barclays halting compensation
MPs have warned Barclays not to close its compensation fund for customers mis-sold credit card plans. Liberal Democrat leader Vince Cable and John Mann, a member of the Treasury Select Committee, have said Barclays risks getting mired in a mis-selling scandal “potentially on a par with PPI”. Barclays, which denies the claim in its entirety and has countersued for £321.4m, will appear in the High Court next month in a bid to stop meeting pay-out costs for allegedly mis-selling so-called “debt waiver” products to credit card customers under its now-defunct Monument brand.
Santander offers SMEs huge China exposure
SME customers of Santander can now launch stores on JD.com, China's largest online retailer, if they have international trading experience and a turnover of at least £10m. Kaisi Li, deputy general manager of JD.com worldwide, said: “Through our cross-border e-commerce platform, we are making it easier than ever for international merchants to tap into the potential of the China market”.
FCA fines and bans former RBS trader
The Financial Conduct Authority has banned former RBS interest rate derivatives trader Neil Danziger for life from any regulated financial activity, fining him £250,000 in the process. He was accused of attempting to manipulate the Libor rate for Japanese yen.
TSB appoints director
HSBC banker Richard Davies has been appointed by TSB to run its small business arm as commercial banking director. Mr Davies was also CEO of OakNorth.
PRIVATE EQUITY
Ag tech fundraising doubles as farmers seek disruptive solutions
Data from CB Insights shows investors ploughed more than $700m into agricultural tech in 2017 – up from $332m and $233m in 2016 and 2015 respectively.
INTERNATIONAL
Israel's central bank: Bitcoin an asset, not currency
Israel's central bank said it would not recognise virtual currencies such as bitcoin as actual currency and that it was difficult to devise regulations to monitor the risks of such activity to the country's banks and their clients.
China shadow bank clampdown eyes $2tn of entrusted loans
The China Banking Regulatory Commission has imposed new curbs that bar banks from making decisions for companies making entrusted loans, and from providing guarantees for those loans.
Banks pitch for Saudi Aramco listing
Saudi Aramco has invited banks pitching for roles in its stock market listing, including Citi and Goldman Sachs, for meetings to make their case.
French corporate deals reach highest value for a decade
Data from Dealogic shows that in 2017 €209.1bn worth of deals was made involving French companies, the highest level since 2007.
AUTOMOTIVE
JLR reports record annual sales
Jaguar Land Rover (JLR) sales hit a record high last year, more than tripling since 2009. Jaguar sold 178,601 cars, up 20% on the year before, while Land Rover sales rose 2% to 442,508. Jaguar saw strong demand for the Jaguar F-Pace, XE and XF models, while Land Rover's best-seller for the year was the Discovery Sport, which sold 126,078 vehicles.
Vauxhall cutting more jobs
Vauxhall is cutting another 250 jobs at its Ellesmere Port car plant on top of the 400 jobs it announced in October. The carmaker, now owned by France's PSA Group, said it needed to “accelerate the recovery of plant productivity”. The Ellesmere Port plant in Cheshire will move staff from two production shifts to one. The company told the Unite union last week that more voluntary redundancies were now needed.
CONSTRUCTION
Carillion shares up over bail-out talks
Shares in Carillion rose 4.98p to 23.87p yesterday following news over the weekend that the outsourcer will meet banks including Barclays, HSBC and Santander about a potential refinancing deal.
FINANCIAL SERVICES
LCH reports record clearing volumes
LCH reported record volumes across multiple clearing services in 2017. LCH said clearing activity in 2017 surpassed that of the prior year, boosted by the roll-out of new products, additional flows from existing customers and new customers. Among LCH's other services, inflation swaps of over $3.1trn were cleared in 2017, almost three times the volume processed in the previous year. Members and their clients increased their flows through LCH by 31% compared with 2016. Separately, the FT looks at how concern is growing over the structure of clearing houses and what would be the consequences if one of them were to fail.
Futures traders boost bets on euro rise to highest since May 2007
US Commodity Futures Trading Commission data shows non-commercial futures traders lifted their net-long positioning on the euro to 128,000 contracts in the week to January 2.
Goldman and Franklin Templeton top worst selling fund ranking
Data from Morningstar shows investors pulled almost $22.7bn from Goldman Sachs’ fund arm in 2017, while Franklin Templeton saw redemptions of $21.6bn.
HEALTHCARE
Siemens set to list healthtech unit
German manufacturing group Siemens is planning to list Healthineers in March, potentially valuing its medical technology business at up to €40bn (£35.4bn). Siemens is reportedly selling 15%-25% of the company, which offers services from medical imaging machines such as MRI to healthcare IT.
Pfizer to stop looking for Alzheimer’s drugs
Pfizer has said it will stop looking for new Alzheimer’s drugs, accepting that it has wasted billions on failed treatments. The pharmaceutical company is also pulling out of Parkinson’s research.
LEISURE AND HOSPITALITY
Molson Coors to create new Aspall jobs
Molson Coors has said it hoped to create new jobs at Aspall cider following its takeover. The US brewing group has bought the family-run Suffolk producer in what is believed to be a £40m deal. Phil Whitehead, Molson Coors' UK MD, said all Aspall's production would continue in Suffolk.
REAL ESTATE
Sharp slowdown in house price growth
House prices grew much more slowly in 2017 than in the previous year, according to Halifax. The lender said prices rose by 2.7% in 2017 - compared with a 6.5% increase in 2016. On a calendar year basis, that is the lowest rise since 2012. At the end of the year the average house price across the UK was £225,021.
RETAIL
Mothercare shares fall after profit warning
Mothercare has issued a profit warning after Christmas sales fell 7.2% year-on-year, while online sales fell 6.9%. The retailer said adjusted group profit was now likely to be between £1m and £5m, after analysts had previously forecast around £10m.