UK banks face block on high street branch closures
The Financial Conduct Authority may be given the authority to block banks from closing branches in order to maintain access to cash and services for local people. In a consultation last month, the Treasury said it was considering new legislation that would give the UK’s financial regulator the power to ensure the public has “reasonable” access to cash. Gareth Shaw, head of money at consumer group Which?, says: "The Government's proposal to put the FCA in charge of the cash system,
including holding industry accountable for providing access, is a vital
step. As cash machine and bank branch numbers continue to decline sharply, the Government's legislation plans cannot be introduced soon enough." The Telegraph reports that senior bankers are preparing to push back on the proposals arguing that strict rules could force them to keep
bankrolling "tired and redundant" branches.
Over 350k SMEs cannot repay Covid loans
A survey of small businesses has found that 59% used government loans or furlough schemes during the pandemic – around 3.5m businesses. The YouGov poll commissioned by Lawbite also reveals that at least 10%, which could represent as much as 354,000 SMEs, could not now repay the loan due to the impact of cash flow and supply chains. About 18% of participants intend to make redundancies, and 16% cannot afford to pay existing staff due to the impact of loan repayments.
Sub-1% mortgage rate war continues
HSBC is offering a two-year mortgage deal with a 0.89% interest rate for borrowers with a 40% deposit - its lowest ever fixed mortgage rate. HSBC is also offering a five-year deal fixed at 0.99%, again for borrowers with a 40% deposit and a £999 fee. Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “Several big brands now offer sub-1% mortgages and if borrowers are comparing these deals it would be wise to approach a broker to assess the overall true cost.”
Letter: Digital currencies are good news for banks
Standard Chartered’s head of digital assets, Vinoy Kumar, says in a letter to the FT that “digital currencies, both private and central bank-issued, can help make the financial system more efficient and inclusive.”
SoftBank to cut China investments until tech sector calms
SoftBank's Vision Fund division recorded a $8bn fall in profit in the first quarter, down to 236bn yen ($2.14bn) as its gains from various IPOs were dragged down by falling valuations after China regulatory crackdowns. Consequently, SoftBank will cut its investment in Chinese start-ups until the extent of Beijing’s scrutiny of the tech sector becomes clear, founder Masayoshi Son said on Tuesday.
Citigroup to require vaccines for US office workers
Citigroup’s head of human resources said on Tuesday that US employees returning to the office will be required to be vaccinated against COVID-19. The company will provide rapid test kits for staff, who will be required to wear masks in the office due to concerns about the spread of the highly transmissible Delta variant.
Wells Fargo names new chairman
Wells Fargo & Co has named Steven Black as chairman effective immediately, succeeding Charles Noski who will retire at the end of September. the change comes as CEO Charlie Scharf battles to turn the bank around following a wave of sales practice scandals.
Two new senior bankers for Deutsche Bank’s US team
Deutsche Bank has hired two new managing directors for its healthcare investment banking team in the US. Spencer Watts and Helen Oesch will join from Nomura Holdings and Bank of Montreal respectively, and will be based in New York.
Bellway buoyed by surge in demand for homes
Bellway’s revenues have climbed 41% to £3.1bn in the year to the end of July – just 2.5% below 2019’s level – as demand for homes booms across the country. CEO Jason Honeyman commented: “The group benefits from a substantial order book and a robust balance sheet. Our record investment in land . . . provides a strong platform for both volume growth and further margin recovery in the years ahead.”
UK fintech investment hits new record
There were $24.5bn (£17.7bn) worth of deals in Britain’s financial technology industry in the first half of this year, placing the UK second in the world behind the US. UK fintechs attracted significantly more funding than their counterparts in the rest of EMEA combined, and came second only to the US in the first half, whose fintech industry attracted $42.1bn. In Europe, the Nordic region was closest behind the UK, raking in $4.8bn investments in the first half. Experts said the total for the UK was given a one-off lift by the $14.8bn purchase by the London Stock Exchange of the financial data provider Refinitiv, but the UK’s new record of 283 deals completed was well ahead of anywhere outside the US. Venture capital firms were especially active with fintech-focused investments in the UK, reaching $6.2bn, more than double the level in the second half of 2020.
Abrdn reports surge in profits
Abrdn’s earnings jumped over 77% in the first half of 2021, its first set of results since a rebranding showed, thanks to strong performance in its adviser and investment businesses. The asset manager, formerly Standard Life Aberdeen, said that adjusted pretax profit rose to £163m in the six months to June from £92m pounds a year earlier. Abrdn also revealed that it has snapped up AI wealth management firm Exo for an undisclosed price. The deal will allow Abrdn to offer wealth management via an app.
M&G raises hopes of cash return
M&G has reported a 6% rise in first-half adjusted pre-tax operating profit to £327m – beating expectations. The insurer and asset manager generated £869m of capital in the six months to the end of June, which it said kept it on course to hit its target of £2.2bn by the end of 2022. Bank of America analysts said that capital was “at exceptionally healthy levels” and that M&G could start returning extra cash next year. “We forecast £500m of buybacks over 2022-24,” they said.
Munich Re says Delta variant has pushed up forecast Covid losses
Munich Re has doubled its full-year estimate for Covid-related claims in its life and health division after booking €302m in the first six months of 2021, up from €105m in the same period last year.
AmEx postpones full return to office
American Express has postponed a full return of employees to its offices in the US until at least October 11th due to the rapid spread of the Delta variant of the coronavirus.
LEISURE & HOSPITALITY
IHG reports “significant improvement” in first half results
Intercontinental Hotels Group has reported that domestic leisure bookings, particularly in the US and China, has driven a “significant improvement” in trading in the first half. CEO Keith Barr said: “Trading improved significantly during the first half of 2021, with travel demand returning strongly as vaccines roll out, restrictions ease and economic activity rebuilds.”
Ron Black announces plan to bid for Newport Wafer Fab
The former boss of Imagination Technologies has brought together a consortium of investors and tech companies interested in taking over Newport Wafer Fab if the Government chose to block its takeover by Shanghai-owned company Nexperia. Ron Black declined to directly call for ministers to block the deal but did say that all technology deals should be strongly considered on national security grounds. Mr Black said the consortium intends to invest heavily to make Newport Wafer Fab the centre of a cluster of companies in south Wales involved in compound semiconductors - a new, advanced material that promises more powerful microchips.
MEDIA & ENTERTAINMENT
AMC to accept payment in Bitcoin
AMC, the US company that owns Odeon cinemas, says it will allow customers to pay for movie tickets and concessions in Bitcoin by the end of the year.
Winchester becomes UK's least affordable city
Analysis by the Halifax shows that Winchester has overtaken Oxford to become the least affordable city to buy a home in. Its figures suggest buying a home in the Hampshire commuter city will cost 14 times average earnings, higher than Greater London at 11 times. Typically, buying a home in a UK city will now set buyers back 8.1 times their average earnings, up from 5.6 times a decade ago. Over the past year, the Halifax calculates that the average house price in UK cities has grown by 10.3%, whilst average earnings for people living and working in cities climbed just 2.1%.
Sales surge at Watches of Switzerland
Watches of Switzerland has revealed that UK sales increased 43% compared with the pre-pandemic levels in the 13 weeks to 1 August, helping the group more than double year on year sales to £297.5m in the quarter.
Real Madrid plan legal action against CVC plan
Real Madrid have announced plans for legal action against La Liga president Javier Tebas and his proposals for a €2.7bn (£2.3bn) deal with private equity firm CVC.