RBS pays £3.8bn to settle US claims
The US Justice Department has announced that RBS will pay £3.85bn ($4.9bn) to settle charges it misled investors on mortgage-backed securities ahead of the financial crisis. The department says RBS disputes the allegations and does not admit wrongdoing. Jesse Panuccio, US acting associate attorney general, said: “This settlement holds RBS accountable for serious misconduct that contributed to that financial crisis, and it sends an important message that the Department of Justice will pursue financial institutions that illicitly harm the American economy and our consumers." Ross McEwan, RBS chief executive, commented: "We are pleased to have reached a final settlement with the Justice Department and that we can focus our energy on serving our customers better and returning capital to our shareholders.” The bank also revealed it would be paying an interim ordinary dividend of 2p a share on October 12.
Lloyds replacing five Avios credit cards with a single card
Lloyds Bank’s flights reward scheme is being overhauled, with customers facing cuts to their perks. Lloyds is replacing its five Avios credit cards with a single card that offers fewer points for every pound you spend. The changes mean customers will no longer qualify for free British Airways flights for their partners, upgrades to business class or fee-free spending on holiday. Customers are being contacted, with letters telling them they will be switched to its new Avios Rewards Mastercard. They will keep any Avios points they have already accrued, with these to be transferred to the new card.
Banks must reveal data
As of today, banks must publish information to help business and personal current account holders to compare services, with the Competition and Markets Authority and the Financial Conduct Authority saying providers must deliver "objective and standardised" data every six months. This will include information on service downtime and security disruptions. From February the lenders will also be forced to publish metrics such as the time it takes to open a current account.
Banks lure students with freebies
A number of banks are looking to entice student savers, with NatWest offering new student customers one-year Amazon Prime membership and a National Express Coach card. Lloyds Bank has added a free NUS Extra card for student accounts – alongside an interest-free overdraft of up to £1,500. Rachel Springall of Moneyfacts says banks are promoting account freebies rather than the level of interest-free overdrafts offered, with this likely to be linked to “a greater public awareness of consumer debt.”
Private equity spending pace slows to 10-year low
Private equity firms utilised just 1% of their capital in the last three months of 2017, according to new analysis, down from over 5% in 2006.
Esure founder to be chair after takeover
The board of Esure has agreed to a £1.2bn takeover by private equity outfit Bain Capital and will recommend Bain's formal 280p a share offer to investors. Sir Peter Wood, who is selling most of his 31% stake, is staying on as chairman of the firm he founded. He will reinvest £50m of his £360m stake.
Deutsche Bank board to discuss executive contracts
Deutsche Bank’s supervisory board will consider extending the contracts of several of its senior executives - including investment bank boss Garth Richie, whose contract expires soon. A Deutsche spokesperson said: "All our management board contracts are fixed term. Several will come to an end within the next year. These contracts are due for renewal, and will be on the agenda at the next regular supervisory board meeting in October".
Polypipe boosted by building
Polypipe says its construction markets in the UK are growing at 5% a year, saying it is benefiting from the rise in housebuilding and the government demand for 300,000 new homes a year.
Buy-to-let lending slumps
The number of new home loans taken out by buy-to-let landlords fell by nearly one-fifth following a series of tax changes and new regulations. UK Finance said that 5,400 buy-to-let mortgages completed in June, a 19.4% fall from June 2017, when 6,700 were completed.
Homebase puts 1,500 jobs at risk with plan to close 42 stores
Homebase has announced a company voluntary arrangement that will lead to the closure of 42 unprofitable stores – 39 in the UK and three in the Republic of Ireland – by early 2019, with the loss of up to 1,500 jobs. Homebase wants to cut rents on a further 70 stores, including asking for reductions of up to 90% on 18 shops. Creditors will vote on the CVA plan on August 31.
Who needs fans?
New research has shown that the Premier League's £8.3bn broadcast deal is so lucrative that 10 clubs in the 2016-17 campaign, the first benefiting from the current arrangement, would have recorded pre-tax profits even with match day incomes stripped away.
Rugby tops list for highest-paid chiefs
The Rugby Football Union has topped the list for salaries paid to chief executives by sport's governing bodies last year. Outgoing RFU chief Ian Ritchie earned £710,000 during 2017, slightly more than the £699,000 earned by Martin Glenn, the chief executive of the FA.
Wage growth slowing amid record low unemployment figures
The unemployment rate fell to 4% in the three months to June, according to the ONS, the lowest figure for more than 40 years. The number of unemployed Britons fell by 65,000 to 1.36m while the number in work increased by 42,000 to 32.4m. However, wage growth slowed to 2.4% in June, with earnings rising exactly as much as prices over the past year. There was more encouraging news on productivity, as output per hour improved to 1.5% in the three months to June from 0.9% in the first quarter.
CEO pay soars
Median pay for FTSE 100 chief executives rose by 11% last year to £3.93m, while workers received a 2% rise over the same period. The study by the Chartered Institute of Personnel and Development and the High Pay Centre found that 68 FTSE 100 chiefs now earn more than 100 times the average worker’s salary, up from 60 in the study last year. While shareholders have succeeded in putting some downward pressure on basic salaries, bonuses still grew strongly because they were paid largely in shares. Rachel Reeves, Labour chairwoman of the Commons business select committee, said the figures undermined public trust in business.