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Daily News Roundup: Wednesday 15th January 2020

Posted: 15th January 2020

BANKING

Santander cuts interest rate on current accounts

Santander has announced changes to its flagship 123 current account, with savers set to earn less interest and cashback. As of May 5, account holders will see the interest rate fall from 1.5% to 1%, while cashback earnings will be capped at £15 a month. Santander will also reduce its interest rate for customers who hold its Select and Private current accounts. Santander said that around one in 50 savers will pay more for their monthly fee than they earn in interest and cashback, adding that it will write to these customers to offer alternative accounts. The Telegraph notes that Santander will charge 39.9% for arranged overdraft borrowing from April 6.

Consumers unaware of Open Banking

A study by Which? shows that three quarters of people are still unaware of the Open Banking scheme that was launched two years ago. It also notes consumer concern over data privacy and security. Meanwhile, Franz Doerr, CEO and founder of flatfair, argues that Open Banking will deliver the “next consumer revolution,” saying the next few years will see “more and more brands” forming partnerships with challenger banks and saving apps.

PRIVATE EQUITY

Tech start-ups win record investment

Analysis by Tech Nation and Dealroom shows that the UK has risen above the US and China for growth in funding for its tech sector, with the amount of venture capital investment into British tech start-ups climbing 44% to a record $13.2bn in 2019. Investment into start-ups in the US and China dropped by 20% and 65% respectively, hitting $116bn and $33.5bn. The research found that eight new unicorns were created in the UK in 2019. Fintech start-ups in the UK raised $5.4bn in 2019, 7.5 times the amount raised by French banking start-ups.

Hedge fund puts $550m into technology stock option financing

Serengeti Asset Management is investing $550m into SecFi, a platform enabling start-up employees to cash out without waiting for their companies to go public.

Felix Capital reveals third fund

Felix Capital has revealed its third fund at $300m. It is targeting start-ups at both early and later stages. Around a third of the fund will be invested in the UK, with plans to allocate around 40% towards business-focused products.

INTERNATIONAL

JPMorgan Chase sees record annual profit

JPMorgan Chase brought in a record annual profit in 2019, its Q4 figures results reveal. The bank saw an 86% increase in bond trading that helped overall profits climb 21% to $8.5bn in the final three months of 2019. Revenue rose 9% year-on-year to hit $29.2bn. The Q4 numbers mean profit for 2019 hit a record high of $36.4bn. Meanwhile, boss Jamie Dimon has insisted he is not retiring anytime soon, saying that his fate is for the board to decide.

Citigroup sees ‘strong finish’ to 2019

Citigroup saw stronger than expected revenue growth in Q4, with it hitting $18.4bn – an increase of 7% on Q4 2018. Net income, excluding one-time tax benefits, rose 5% to $4.4bn, with earnings per share at $1.90. Citi's chief executive Michael Corbat said the results represented a "strong finish to the year".

High expenses drag on Wells Fargo earnings

Wells Fargo’s quarterly report shows revenue of $19.9bn, which fell short of analyst expectations of $20.1bn, as non-interest expenses reached $14.1bn. Earnings per share came in at 93 cents, below forecasts of $1.11.

AUTOMOTIVE

Germany charges six Volkswagen executives over Dieselgate

Six Volkswagen managers have been charged with fraud over the diesel emissions scandal in 2015, with it claimed that they either participated in or abetted the development of manipulation software.

AVIATION

Government agrees Flybe rescue deal

The Government has agreed a rescue plan for airline Flybe, with a repayment plan for a tax debt that is thought to exceed £100m agreed. Business Secretary Andrea Leadsom said the deal would keep the company operating. Flybe's shareholders, which include Virgin Atlantic and Stobart Group, have agreed to put more money into the business. The Government also announced that taxes on domestic flights would be reviewed as part of the rescue deal.

CONSTRUCTION

Market stable, says Taylor Wimpey

Taylor Wimpey has asserted that the housing market remained stable last year, despite the ongoing economic and political uncertainty. In a trading update, the housebuilder said total home completions, including joint ventures, increased 5% to 15,719 - 23% of which were affordable homes. Average selling prices on private completions increased 1% to £305,000 and the overall average selling price reached £269,000, it added, up slightly from £264,000 the year prior.

Build-to-rent division boosts Watkin Jones

Watkin Jones has reported that profit from its build-to-rent division has more than doubled. However, the developer, which also makes student housing, saw overall profit slip due to exceptional costs. Pre-tax profit fell 8.5% to £49.7m, while revenue grew 3.2% to £374.8m. Revenue from build-to-rent soared to £73.6m from just £3.8m in 2018, while profit from the arm was £13.2m.

FINANCIAL SERVICES

BlackRock issues climate change warning

BlackRock boss Larry Fink has warned that companies that fail to cut their carbon footprint and adapt to climate change will be left behind by investors. In his latest annual letter to business leaders, he asserted that global warming - the biggest threat to global profits - can no longer be ignored. In an open letter to BlackRock’s clients, Mr Fink set out changes that will place sustainability at the centre of its investment approach. BlackRock aims to be more conscious of ESG issues in companies it owns through actively managed funds and may vote against companies that refuse to tackle their carbon footprint. Companies BlackRock invests in will be asked to disclose information in line with guidelines from the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures.

‘Robo-advice’ firm closes down

‘Robo-advice’ firm Moola is set to close down at the end of next month, just 18 months after founder Gemma Godfrey sold the business to insurer and financial planning firm JLT. A statement from Moola said: “We can confirm that we have taken the decision to close down Moola. All existing investors have been contacted and given options as appropriate to them.” The demise of Moola follows a series of other robo casualties in recent times. Last year Investec decided to shut its Click & Invest unit to new clients, while UBS pulled the plug on its robo-advice platform SmartWealth in 2018.

Fidelity takes on first crypto client in London

US fund giant Fidelity’s cryptocurrencies arm has taken on its first European client. It will act as custodian for Nickel Digital Asset Management, which runs numerous Bitcoin and cryptocurrency funds for investors. It is understood Japanese bank Nomura, Goldman Sachs and Northern Trust are looking at offering custodial services.

Old Mutual wins battle to sever ties with former chief

A court in South Africa has ruled that insurer Old Mutual can sever ties with its former chief executive Peter Moyo, ruling against his claim that he should be reinstated.

LEISURE AND HOSPITALITY

Betting with credit cards to be banned

The Gambling Commission has announced a ban on using credit cards to place bets. The ban, which comes into force on April 14th, will apply to online and offline gambling, excluding over-the-counter lottery tickets. Neil McArthur, chief executive of the Gambling Commission, said: ​"Credit card gambling can lead to significant financial harm. The ban that we have announced today should minimise the risks of harm to consumers from gambling with money they do not have”.

888 Holdings CFO steps down

Online betting platform 888 has announced that Aviad Kobrine will leave his role as chief financial officer this year, having been in the role since 2005. He will remain in position until a successor is found.

MEDIA AND ENTERTAINMENT

All eyes on Future FD's pay vote

Publishing firm Future is bracing itself for shareholder criticism at its annual general meeting next month after influential proxy adviser Glass Lewis urged investors to vote down the firm’s executive pay policy. Future’s remuneration report outlines a base salary increase of more than 27% for finance director Penny Ladkin-Brand, who is set to take home £3.9m overall in 2020. Almost a third of shareholders voted against last year’s pay report.

RETAIL

Chappell ordered to pay £9.5m into pension schemes

Dominic Chappell has been ordered to pay £9.5m into BHS’s pension schemes after an unsuccessful appeal. The Pensions Regulator (TPR) said Chappell’s appeal against two contribution notices – which were first made back in January 2018 – to pay a total of £9,542,985 into the BHS’s pension schemes was struck out in its Upper Tribunal. The TPR will now look to recover the money from Mr Chappell for the two schemes.

ECONOMY

Credit card spending hits £6.6bn over Xmas

TSB research shows that Britons spent £6.6bn on credit cards over the festive period – an average of £435 each. Analysis shows that one in five people with a loan or card are concerned about meeting their repayments, while just over half worry about money at least monthly. TSB’s Craig Bundell urges those with debt problems to create a budget, saying: "If your credit card interest is too high, look at the best balance transfer offers, or consolidate debts with a personal loan.”

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