Banks provide emergency measures for coronavirus victims
Royal Bank of Scotland, Lloyds Banking Group, Barclays, Santander UK, Virgin Money and TSB are all offering help to customers affected by the coronavirus as the disease is expected to peak in the UK in the next fortnight. Customers could be granted payment holidays on mortgages or loans while fees for missed payments on credit cards and other charges are also being dropped. Credit card limits are being increased and charges for withdrawing savings early are being scrapped. Stephen Jones, the chief executive of lobby group UK Finance, said: “All providers are ready and able to offer support to their customers who are impacted directly or indirectly: asking for help early is key.” Gareth Shaw at Which? points out that credit scores could be harmed by these offers and banks must ensure credit reference agencies are informed of the changes.
FCA considers intervening to aid mortgage switching
The Financial Conduct Authority (FCA) has suggested there is a case for intervening to help mortgage customers who do not switch by ensuring they have better information at the right time. The FCA has considered a range of different remedies and intends to consult in the second quarter of 2020. The regulator said that up to 800,000 people were missing out on an average of £1,000 a year by not changing deals.
Nationwide’s deputy moves to Santander
Tony Prestedge has joined Santander as deputy chief executive after a decade at Nationwide. The move suggests CEO Nathan Bostock may be on his way out. The Spanish-based lender is also searching for a chairman to replace Shriti Vadera.
RBS sell-off postponed by Treasury
The Government is expected to announce that it will not divest its 62% stake in RBS until 2025 in the wake of stock market uncertainty.
KKR closes London offices
KKR closed its London offices yesterday after an employee tested positive for the coronavirus, the private equity firm said. Elsewhere, BlackRock have confirmed one case of an employee being infected with the coronavirus in their New York offices.
Bank employees test positive
Barclays, Morgan Stanley and Wells Fargo have all reported that workers in the US have the Covid-19 coronavirus, with offices in New York and San Francisco affected. Deutsche Bank said an employee working on a trading floor in Frankfurt and four retail staff across the country had tested positive for the virus.
HSBC appoints former top Citi banker Forese to the board
Jamie Forese, formerly a top executive at Citigroup, has been appointed by HSBC as a director as the lender embarks on major restructuring of its US business.
Peugeot factory to go down to four-day week
The slowdown in the European car market has prompted Peugeot to announce that its Ellesmere Port factory in Cheshire will go down to a four-day working week later this month.
Airlines cancel thousands of flights
Airlines are cancelling flights worldwide as demand slumps, with Ryanair, BA and EasyJet all saying they were stopping services to Italy from later this week until the beginning of April. Norwegian Air will cut about 15% of its capacity and has announced a temporary lay off of a large proportion of its workforce. Up to 20,000 British tourists faced being stranded in Italy. In the US, American Airlines, Delta Air Lines and United pulled their 2020 financial forecasts.
Brussels relaxes airport landing rules to stop flying empty planes
The EU has suspended rules that require airlines to fly planes even if they are empty to preserve their allocation of landing slots. European commission president, Ursula von der Leyen, said: “We want to make it easier for airlines to keep their airport slot, even if they do not operate flights in those slots, because of the declining traffic.”
Virus blow leads John Menzies to suspend dividend
Aviation services firm John Menzies will temporarily suspend its dividend for this year after warning of an expected 2020 profit blow from coronavirus. Executive chairman Philipp Joeinig said: “We are currently experiencing some headwinds due to the impact of Covid-19 on our activities but in the medium and long term we see genuine opportunities for growth.”
Balfour Beatty delays £200m share buyback
Balfour Beatty has postponed its planned £200m-plus share buyback due to coronavirus-related stock market turmoil. The group had planned to unveil the buyback today alongside the release of its annual results, but a source has revealed that Balfour has put off its plans after the London Stock Exchange suffered a series of blows over the past two weeks.
UK-US FTA would scupper plans to dethrone City
Lord David Owen has said that if the UK and the US strike a trade deal, plans by France to snatch financial services supremacy from London will be scuppered once and for all. Lord Owen added: "I don't think myself we should underestimate the City of London getting closer to American city financing, allowing us the flexibility to underbid. Being told by a politician you have to use Frankfurt or Paris is nonsense. Unless they want to go to a completely regimented, protectionist system, those people will not go. They will not get the investment." Meanwhile, the FT reports that Valdis Dombrovskis, the EU's financial regulation chief, has said any decision on equivalence would be delayed beyond June to take into account “overall developments, including any divergences from EU rules."
Standard Life Aberdeen profits down 10%
Standard Life Aberdeen’s underlying profit dropped 10% in 2019, with fee-based revenue falling 13% to £1.63bn. The Edinburgh-based group reported underlying pre-tax profit of £584m, down from £650m in 2018. SLA saw net outflows last year of £58.4bn, including £41bn lost when Lloyds Banking Group ended a £100bn-plus contract with the group. SLA said the outflows "continued reflecting investor sentiment towards emerging markets and equity markets more generally".
Aviva cuts back travel cover amid coronavirus disruption
Aviva has cut back on the cover available in new travel insurance policies because of the coronavirus outbreak. The UK insurance giant said people will still be able to buy its travel insurance - but they will not be able to add cover for travel disruption. Additionally, specialist insurance firm SportsCover Direct has announced a "coronavirus exclusion" which will apply to newly-sold policies.
M&G warns on capital position as profits fall
Asset manager and insurer M&G revealed on Tuesday a 30% fall in profits and £1.3bn of investor outflows last year. However, AUM were up from £321bn to £352bn.
LEISURE & HOSPITALITY
Safestay suffers a sharp drop in bookings
Hostel firm Safestay has warned that fears over the Coronavirus outbreak have led to a steep fall in bookings from schools and colleges. The operator said it would reduce flexible costs where possible to offset the dip in bookings.
Iofina rejects argument to replace chairman
Aim-listed Iofina has declared the attempted board coup by Arron Banks “self-serving” and accused the Brexit campaigner of making flawed arguments in his attempt to replace chairman Lance Baller. Mr Banks wants the iodine producer to appoint an independent chairman based in the US. He is also calling for the firm to either refinance or pay off its debts.
Defence spending improves Ultra's profits
An increase in defence spending, particularly in the US, has boosted profits at Ultra by 113%, the electronics group said. Profit before tax had risen to £91m in 2019 from £42.6m in 2018. Net profit was £74.5m up from £32.4m in 2018. Shares rose 10.81% as a result to 2,112p.
City hiring could stall if virus outbreak worsens
Morgan McKinley said yesterday that hiring in the Square Mile could come to a standstill if the coronavirus outbreak causes more businesses to close offices and make staff work from home. The financial services recruiter’s operations director Darren Burns said: “There's no way any of the Big Four are going to do permanent hire without an in-person panel interview.” Burns added that if the outbreak continues to spread hiring "will completely go off a cliff".
Informa to delay or cancel events over coronavirus
Informa has postponed or cancelled almost 130 business-to-business events worth more than £400m in revenue due to the coronavirus outbreak. CEO Stephen Carter noted that the cancellations would not be covered by insurance as policies either don’t cover communicable diseases or have “payouts capped or collared in some way”.
Deutsche Post eyes profit boost despite coronavirus disruption
The German logistics group Deutsche Post DHL has said it could benefit from a boom in internet orders due to Covid-19 fears, and even a no-deal Brexit, by helping its customers deal with the subsequent complexities.
Cola Holdings seeks £1bn sale of Mayfair portfolio
Westbury Hotel owner Cola Holdings is seeking a £1bn offer for its Mayfair property estate, which also includes Bond Street’s Burberry store and a private members club.
DFS unveils slump in sales
DFS Furniture fell into the red yesterday after it revealed a 5.7% fall in group revenue for the first half of the year. The retailer blamed political uncertainty for a drop in consumer confidence and reduced footfall due to coronavirus fears.
Treasury and BoE plan coordinated response
City analysts believe the Bank of England is set to announce a dramatic package of support for the British economy to help it through the coronavirus outbreak, including a cut to interest rates and relaxing borrowing conditions for high street banks. The move is likely to coincide with the Chancellor’s Budget announcement as the Government seeks to give the economy a shove as the coronavirus situation worsens. Rishi Sunak is set to pledge £600bn in spending to improve Britain’s infrastructure, provide extra cash for the NHS to cope with the spread of Covid-19 and row back on a scheduled 2p-a-litre fuel tax rise. Meanwhile, experts also expect the ECB to cut rates and announce measures to bolster bank lending across the eurozone on Thursday.
Italy needs $700bn bailout
Ashoka Mody, the IMF's former deputy director in Europe, has warned that Italy will need a $700bn bailout to stop a chain-reaction through the international financial system. But the EU is too weak to rescue Italy on its own and the US and other major powers will need to step in. The Telegraph’s Jeremy Warner suggests the strife brought on by the Covid-19 emergency could be the key to ending Italy’s resistance to EU fiscal union.