Emergency business loan fraud concerns
Royal Bank of Scotland has had to review as many as 20% of the applications for the emergency business loan scheme after they were flagged as potentially fraudulent, the Telegraph reports. According to UK Finance, over 304,000 businesses have now received almost £15bn through the state-backed coronavirus loan programmes. John Cronin, a Goodbody analyst, said fraudulent claims are a concern for banks’ lending under the scheme. “I also am concerned about banks’ lending to businesses that are not creditworthy ,” he added. “There is no pre-COVID-19 viability assessment.” Separately, Rishi Sunak, the Chancellor, yesterday revealed that 267,000 loans worth £8.4bn had been made under the government's Bounce Back Loan Scheme since it launched on May 4th. Meanwhile, the latest figures from Lloyds Banking Group show the lender has already provided £4bn of finance for businesses needing emergency support, with £2.4bn of this in Bounce Back loans.
Bank of England to keep negative rates under review
Bank of England deputy governor Ben Broadbent has said the Bank will keep the idea of negative interest rates in the UK under review, as it had done since the financial crisis. Asked about the policy on CNBC, he said it was a matter of “balanced judgement”. He went on to say that it is “quite possible that more monetary easing will be needed over time,” with many analysts believing this stimulus will come in the form of an increase in the Bank’s £645bn QE programme.
Numis lines up for wave of deals
Numis Corporation co-chief executive Alex Ham said yesterday that although deal-making was almost down to zero this would change soon with an “ increase in industry consolidation and broader M&A”. Mr Ham was speaking as the independent British investment bank posted half-year results showing that a strong performance from its equities division had offset lower revenues at its investment banking business.
Tesco launches cash delivery service
A cash delivery service has been launched by Tesco Bank to support vulnerable customers who cannot go to an ATM while self-isolating or shielding. A minimum of £20 and maximum of £500 will be sent by Royal Mail Special Delivery.
BlackRock throws support behind US stock exchange start-up MEMX
BlackRock is among the backers of Members Exchange, the new US stock-trading venue mounting a challenge to the New York Stock Exchange and Nasdaq.
Norway draws on wealth fund after double-whammy hit to economy
Norway plans to withdraw a record 382bn kroner $37bn from its sovereign wealth fund exposing the scale of the economic damage done by COVID-19 and a collapse in global oil markets. The fund’s cash flow this year is 249bn kroner meaning asset sales could reach 133bn kroner to realise the total.
Deutsche Bank execs to waive a month’s pay
Deutsche Bank CEO Christian Sewing will next week announce that top managers at the bank will waive one month of fixed pay in an effort to cut costs at the lender. Deutsche Bank is also considering cutting costs related to travel and office space following its experience with enforced changes due to the coronavirus outbreak. Sewing will also say that the bank’s restructuring, which includes scrapping 18,000 jobs, will go ahead as planned after being temporarily delayed. Additionally, Deutsche Bank has sold €1.25bn of new bonds that count towards its capital buffer.
Toyota warns of profit collapse as COVID-19 crisis hits vehicle sales
Toyota has warned that the effect of coronavirus on sales would be worse than during the global financial crisis, predicting an 80% fall in operating profits over the next year.
Tesla California plant reopens in defiance of county rules
Elon Musk has claimed that his electric car manufacturer Tesla is restarting production at its California plant in defiance of an order to remain closed. Authorities in various other states are attempting to persuade Mr Musk to relocate his operations from California.
EasyJet founder offers £5m of own cash in bid to prevent deal
As his battle with easyJet management continues, founder Sir Stelios Haji-Ioannou is offering £5m of his own money to whistle-blowers who can help to bring about the cancellation of the airline’s order for over 100 new Airbus aircraft. He is seeking information from “current or past hard-working easyJet employees or anyone else who has seen anything suspicious by anyone inside easyJet in their dealings with Airbus,” with anonymity assured and legal costs covered.
Ryanair and Virgin outline relaunch plans
Low-cost carrier Ryanair is planning to begin operating two-fifths of scheduled flights from 1 July, with almost 1,000 daily flights across 90% of its pre-coronavirus route network planned. Various safety measures are planned including face masks and temperature checks. Meanwhile, Virgin Atlantic has launched its flight programme for summer 2021, when it will operate 24 routes from London Heathrow, Manchester, Glasgow and Belfast.
Standard Life Aberdeen coronavirus effect ‘modest’
The coronavirus crisis has had only a modest impact on Standard Life Aberdeen’s business, with the firm reporting estimated total assets of £490bn at the end of last month. Chief executive Keith Skeoch said that the latest number was "an encouraging signal". Meanwhile, SLA shareholders have voted down a proposal that could have allowed the group to replace physical annual general meetings with virtual ones. The Times’ Patrick Hosking points out that the revolt took place at an AGM which had to be held online because of lockdown rules that currently prevent public assemblies.
Allianz warns of €1bn profit wipeout from COVID-19
Allianz has warned that the fallout from the coronavirus pandemic is likely to wipe out more than €1bn profit this year, and has set aside €400m in the first quarter to cover payments to customers.
LEISURE & HOSPITALITY
Pub industry trade body welcomes furlough extension
The chief executive of the British Beer & Pub Association has welcomed Chancellor Rishi Sunak’s four-month extension the Coronavirus Job Retention Scheme, which will now run until the end of October. Emma McClarkin said: “As a sector employing 900,000 people and where 90% of the staff have been furloughed, we cautiously welcome the extension and increased flexibility of the Job Retention Scheme”.
Hollywood Bowl announces loan from government
Bowling alley operator Hollywood Bowl has secured £10m from the government’s Coronavirus Large Business Interruption Loan Scheme, with the loan to be provided by Lloyds Bank. Employees temporarily laid off under the coronavirus jobs retention scheme would be kept on full pay for as long as possible, the firm stated.
Carnival UK planning ‘large number’ of redundancies
Carnival UK has revealed a plan to make large numbers of staff redundant in Southampton. The company’s Cunard Line and P&O Cruises brands employ around 1,100 people in the area. President Josh Weinstein warned that if severe measures weren’t taken Carnival “may not successfully get to the other side of this”.
MEDIA & ENTERTAINMENT
Vodafone guidance for next year abandoned
Vodafone has abandoned 2021 financial year guidance as a result of the effects of the coronavirus pandemic. This comes as the firm outlines €1bn in cost savings, while suggesting a possible IPO of its mobile masts operations early next year. Operating profit went from a loss of €951m in the 2019 financial year to €4.09bn, while revenue was up 3% year on year to €44.9bn, with net debt up 56% to €42.2bn.
Landsec reports fall of £1.2bn in value of estate
Land Securities has announced a £1.2bn fall in the value of its estate to a total of £12.8bn over the year. Chief executive Mark Allan commented: “A third of that [fall] is valuer’s recognition of the impact of COVID-19, two-thirds is the structural shift from retail,” with shares in the firm down nearly 14% in morning trading.
House moves and viewings to resume in England
House moves and viewings will be able to resume again in England from today, under new coronavirus rules announced by housing secretary Robert Jenrick. Carrying out viewings, house moves and trips to letting or estate agents will now be legal again. According to property website Zoopla, around 373,000 property transactions across the UK, with a total value of £82bn, have been put on hold due to lockdown measures.
UK consumer spending drops over a third during lockdown
Consumer spending fell 36.5% in April compared with the same month last year, according to Barclaycard data, as shops and pubs shut to limit the spread of COVID-19. The contraction came despite a strong performance of grocery shopping and online sales. Separate data from the British Retail Consortium show that online sales rose 60% in April, well above the 12-month average of 8%. Overall sales fell 19.1% last month compared with an increase of 2.4% last year, the BRC said, the steepest fall since the trade body started recording sales in January 1995.
TM Lewin sale sewn up
Menswear brand TM Lewin has been sold by Bain Capital to SCP Private Equity for an undisclosed sum. SCP will fold the company into Torque Brands, a new vehicle to acquire UK brands in niche markets with global appeal.
Football clubs face possible £350m bill to broadcasters
Premier League clubs may be forced to repay £350m to broadcasters even if the remainder of the season’s games take place behind closed doors. Broadcasters are arguing that the remaining 92 games are not being shown as per their contracts, with some clubs questioning whether the season should be completed at all under such circumstances.
Treasury assessment points to tax hikes to pay £300bn virus bill
A Treasury document outlining possible measures to recover the UK’s finances after what could be a £300bn bill for rescuing the economy in 2020 indicates income tax could rise and the triple lock on state pension increases could come to an end. A two-year public pay freeze could also be announced as part of efforts to restore fiscal credibility and boost investor confidence in the UK, the document states.