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Daily News Roundup: Wednesday, 10th October 2018

Posted: 10th October 2018


Buy-to-let mortgage rates falling

As tax changes force landlords out of the market, lenders are lowering their buy-to-let rates to lure in new business. The average two-year fixed rate buy-to-let mortgage rate has dropped from 3.09% two years ago to 2.90% at present, with the average five-year fixed rate down from 3.77% two years ago to 3.40% in October. Top for two-year fixed rates is Sainsbury’s Bank, with a 1.40% interest rate at 60% loan-to-value and a £1,745 fee, while top for five-year fixed rate deals is The Mortgage Works, which is offering a 1.99% interest rate at 50% loan-to-value and a £2,335 scheme fee.

Banks to help combat illegal wildlife trade

Over 20 lenders including HSBC, Barclays, Royal Bank of Scotland, Standard Chartered and the Bank of America are to focus on stamping out money laundering by gangs involved in poaching threatened species, as part of a scheme launched by the Duke of Cambridge.

Regulation of small business lending urged by RBS boss

Royal Bank of Scotland chief executive Ross McEwan has called for regulation of small business lending in Britain. He commented: "I think somebody needs to be there to put a second view around the SME marketplace… Some sort of regulation around that seems to be needed."

Research underlines need for rainy day fund

Research by SME specialist bank Aldermore has revealed that nearly 50% of small businesses have under £1,000 in savings, with 20% claiming to have none at all. Ewan Edwards, the lender's head of savings, remarked: "It's clear sole traders and the self-employed understand the need to improve their savings, but this is often easier said than done. Better business education and support could help.” He went on: "We want to work with the government to look at ways of backing entrepreneurs and protecting growing small businesses. An Entrepreneur ISA or Small Business Savings Allowance could help."

Starling now ‘the Amazon of banking’

The Daily Telegraph features a profile of Anne Boden, founder of Starling Bank, who discusses the history and growth of the business. She emphasises that few of the new fintech firms are actually banks: "The original digital four were Atom, Tandem, Starling and Monzo… Neither Atom nor Tandem have current accounts. N26 has become a bank but is not in London. Revolut is not a bank and neither is Tide."

Non-existent overdraft charges for TSB customers

Following an IT error, TSB customers were wrongly informed by text message that they do not have enough cash in their accounts to pay their bills. A spokesman said: “We're working as hard and as fast as we can to resolve the issue and apologise for any inconvenience or confusion this may cause.”

Bank transfer fraud ‘tax’ called for

UK Finance chief Stephen Jones has said that consumers should pay a tax on all payments to help fund compensation for victims of fraud. Gareth Shaw, money expert at consumer group Which?, responded: "The cost needs to sit with those that are best placed to manage the risk and protect customers, which is the banks."

Savings rates increase

With new competition in the form of Goldman Sachs’ Marcus, smaller banks and building societies are attempting to compete with its 1.5% deal, leaving easy-access rates at their highest level for two years.

Bail for UBS trader

Former UBS trader Kweku Adoboli has been bailed from detention pending a decision over his deportation. He served three and a half years of a seven-year sentence for exceeding his trading limits at the bank.


HSBC payout agreed over toxic derivatives

HSBC will pay $765m (£582m) to settle toxic derivatives-related claims from before the financial crisis of 2007. Bob Troyer, US Attorney for the District of Colorado, remarked: "HSBC made choices that hurt people and abused their trust. HSBC chose to use a due diligence process it knew from the start didn't work. It chose to put lots of defective mortgages into its deals. When HSBC saw problems, it chose to rush those deals out the door." The president and chief executive of HSBC USA, Patrick Burke, commented: "We are pleased to put this investigation related to activity that occurred more than a decade ago behind us."


Volkswagen truck unit IPO to hire banks

Volkswagen is reportedly preparing to hire Citigroup, Deutsche Bank, Goldman Sachs and JPMorgan to help with its truck unit Traton’s potential stock market listing.


Contract payments problems raised by small companies

MPs have been told that regular slow and late payment of bills is affecting construction businesses, which are being left unable to invest and expand as a result of the problem.


Aviva board ousts chief executive

Aviva chief executive Mark Wilson has been voted out by the board, which has called for “new leadership” in accelerating the insurer's strategic development. Wilson will go on gardening leave for the next six months, though will still receive up to £6.5m in pay and bonuses.

New Mifid rules claim Cenkos scalp

Cenkos Securities chief executive Anthony Hotson is to step down in the wake of tumbling profits since Mifid II regulations came into force earlier this year. Aim-listed broking and advisory services firm Cenkos halved its dividends last month after posting a 90% drop in pre-tax profit for the first half of 2018.

Brewdog prepares for flotation

Craft brewery Brewdog is believed to be talking to JPMorgan, Goldman Sachs and Jefferies as it prepares for a stock market flotation in 2020.

Financial software firm raises £1.65bn

FNZ, which provides software to the wealth management industry, has been valued at £1.65bn as HIG Capital and General Atlantic sell about a third of the firm.

Six-fold jump in earnings aimed at by Wirecard

Fintech payments group Wirecard has announced its target of a six-fold rise in profits by 2025. Chief executive Markus Braun recently claimed that the company's market capitalisation could top €100bn.

BlackRock support for watchdog criticised

Asset manager BlackRock has been criticised after it called for more power to be given to the Financial Reporting Council, a view other investors, auditors and academics disagree with.

Possible consortium bid for Nielsen

Buyout funds Blackstone and Hellman & Friedman, with Canada's CPPIB and Singapore’s GIC, are considering a potential bid for TV ratings provider Nielsen.

Silicon Valley start-ups funded by venture capital mega-rounds

So-called "megarounds" of $100m or more were behind the bulk of the venture capital funds raised by technology start-ups in the US in the third quarter.

Western Union to rival Transferwise

Western Union is preparing to launch a UK digital bank account transfer service to compete with major fintech startups including Transferwise.


AccorHotels takes US luxury position

AccorHotels has acquired a 50% stake in US hospitality company SBE Entertainment, which specialises in high-end hospitality. SBE's venues will feature on AccorHotels' platform, on its website and be included in its loyalty programme.


WPP loses contract to rival Omnicom

WPP has lost a key Ford advertising contract to Omnicom's BBDO. "We have a wonderful new brand to help build," remarked BBDO Worldwide president and chief executive Andrew Robertson.

Tax relief drives TV and film production

Tax relief in the UK creative industries, such as film, high-end TV and video games, has resulted in a spend of £7.9bn a year into the British economy. Film production spend hit a record £1.72bn, up 47% from 2013 to £1.16bn, while £896.7m was spent on high-end TV production, which has more than doubled in three years.

Merger on the cards for Kekst and CNC

Corporate public relations firms Kekst and CNC Communications, both controlled by France's Publicis Groupe have announced a merger, creating a client list of about 600 corporations.


Robert Walters posts record performances

British recruitment firm Robert Walters has posted a 12% rise in gross profit for the third quarter amid "record" performances within its German, Portuguese, Spanish and Dutch markets. With a 4% rise in UK net fee income, UK activity remained highest across regions such as Birmingham and Manchester, with hires in new areas such as technology and financial services.


ITV to sell South Bank HQ

Broadcaster ITV has ditched plans to move back into its South Bank headquarters and has instead decided to put the building up for sale. "Since the original decision to redevelop the South Bank site ITV has launched its new strategy and has successfully moved to new office space in Holborn and studios in W12," a spokesperson explained.

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