Bumper mortgages return
House hunters now have more mortgage options as banks are beginning to raise their lending caps. Lenders have begun to relax affordability rules for borrowers after tightening them last year amid concerns that COVID-19 may hit peoples finances. Banks including NatWest, HSBC and Lloyds will once again offer mortgages worth five times a borrower's yearly salary, while Barclays and Santander now lend up to 5.5 times an applicant's income. For most of last year, borrowers were only eligible for loans worth up to 4-4.5 times their income. The Telegraph says banks' easing of affordability criteria is the latest sign the mortgage market is opening back up after a year of restrictions.
Fairbairn lined up for HSBC role
Dame Carolyn Fairbairn is being lined up to join the board of HSBC, with her possible appointment yet to be cleared by the banking regulators. Sources close to the matter say that an announcement could be made at or before the bank's annual meeting in the spring. Meanwhile, Sky News looks ahead to HSBC’s annual results, saying they will be closely watched for the scale of coronavirus-related loan impairments, while the resumption of HSBC's dividend will be “eagerly anticipated” by investors.
Virgin Money relaunches switch deal
Virgin Money has relaunched its Brighter Money Bundle offer, with the deal including a £50 donation from the bank to any charity registered to Virgin Money Giving. The bank said it expects to donate £500,000 to charities through the new switching offer. Switchers will also get a case of wine worth £138from Virgin Wines.
Citi cannot recoup mistaken payments
A US court has ruled that Citigroup cannot reclaim around $500m that was wired to the wrong recipients. Judge Jesse Furman said the bank was not entitled to recoup its funds, even though they were "indisputably transferred by mistake". Citi was supposed to have sent interest payments on behalf of its client, cosmetic company Revlon, but instead fully repaid the firm's loans, wiring almost $900m instead of around $8m. Judge Furman said he was bound by law which has previously found that funds received to recoup a debt do not need to be returned, if "they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake". Citi said it will appeal the decision.
Ex-Goldman Sachs analyst charged with insider trading
A former Goldman Sachs analyst and his lawyer brother have appeared in court charged with insider trading and fraud. Mohammed Zina and Suhail Zina, who was a solicitor at Clifford Chance, were charged with six offences of insider dealing and three counts of fraud by false representation by the Financial Conduct Authority. The pair stand accused of making a profit of about £142,000 from insider dealing, with investments funded by fraudulently-obtained loans from Tesco Bank.
Goldman Sachs to launch digital investment platform
Goldman Sachs is launching a digital wealth-management platform that allocates and rebalances customers' wealth across portfolios of stocks and bonds. Marcus Invest will allocate wealth based on models developed by the bank's investment-strategy group.
JPMorgan mulls bitcoin move
Daniel Pinto, co-president of JPMorgan Chase, has suggested the bank could trade in bitcoin, saying: “If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved. The demand isn’t there yet, but I’m sure it will be at some point.”
Woodford could launch firm in Jersey
Investor Neil Woodford, who has announced plans for a comeback following the collapse of Woodford Investment Management, is planning to register his new business in Jersey, a move which could potentially see him avoid oversight by the Financial Conduct Authority (FCA). Experts say basing the firm on the island could see it overseen by the Jersey Financial Services Commission (JFSC) rather than the City watchdog which is still looking into the collapse of Mr Woodford’s previous operation. The FCA has said it will perform character assessments in its decision over whether to grant a licence to Mr Woodford’s new outfit. Noting reports that the firm may operate from Jersey, FCA enforcement director Mark Steward said the regulator is in contact with the JFSC and the watchdogs have agreed to share information on any application made in their respective jurisdictions. Alan and Gina Miller, co-founders of the True and Fair Campaign, have written to the Treasury Select Committee calling for an independent investigation into the collapse of Mr Woodford’s empire and his current plans, suggesting the probe should include analysis of the FCA's conduct. They argue that confusion over which regulator might oversee the new firm "reinforces that there must be an independent enquiry".
Japanese pension market larger than UK’s
Willis Towers Watson has revealed that Japan has become the world’s second largest pension market, with the UK now in third place. The US retained its position as the largest pension market in the world, making up 62% of worldwide pensions assets. Japan and the UK represented 6.9% and 6.8% respectively. Marisa Hall, co-head of Willis Towers Watson’s Thinking Ahead Institute, commented: “We believe one of the main challenges for pension funds, and opportunities for impact, is the effective stewardship of their assets. It is clear that the unstoppable ‘ESG train’ is picking up pace, and in some cases is being turbo-charged by climate change and the accelerating path to net zero. It is this focus on sustainability that will truly shape the pensions industry in the coming decades.”
Hargreaves Lansdown co-founder cashes in £300m stake
Peter Hargreaves is cashing in a £300m stake in Hargreaves Lansdown. The Hargreaves co-founder is the company’s biggest shareholder with a near 24% stake worth almost £1.9bn. The planned share sale equates to about a sixth of his holding.
Inside Pensions bought by Zedra
Inside Pensions has been acquired by Zedra, which specialises in active wealth and fund services. It is Zedra’s second UK acquisition in six months, after it bought consultant Fitzgerald & Law in September 2020.
Medical cannabis firm sees shares soar on first day of listing
Medical cannabis firm Kanabo Group’s first day listed on the LSE saw its share price rise 66.64%, with CEO Avihu Tamir saying: “With the support of the Financial Conduct Authority and LSE, the medical cannabis industry is set to take off in the UK and in Europe, similar to what’s happened in North America in recent times. This is just the beginning.”
LEISURE AND HOSPITALITY
BBPA warns over outdoor service plan
The British Beer and Pubs Association (BBPA) has said that more than 50% of pubs will not reopen, with those which do open under provisional plans to allow beer garden service from April running the risk of having few customers due to the weather. Opening hospitality businesses with only outdoor service allowed would lead to a £1.5bn loss in turnover for the sector, the BBPA has warned.
Virgin Wines planning London float
Alcohol delivery subscription service Virgin Wines is planning to list on the London Stock Exchange’s AIM market later in the year, having experienced major growth amid lockdown restrictions.
MEDIA AND ENTERTAINMENT
Billboard operator adjusts earnings forecast for 2020
Digital advertising firm Ocean Outdoor expects to post a loss for 2020, with adjusted earnings predicted to fall from £33m to a loss of £400,000 and revenue expected to decline 38% to £86m.
CMA: Gumtree deal raises competition concerns
The Competition and Markets Authority (CMA) has warned that Shpock operator Adevinta’s proposed purchase of Gumtree from eBay could reduce consumer choice. The CMA says the $9.2bn merger could lead to a loss of competition between Shpock, Gumtree and eBay’s marketplace, with the tie-up leaving Facebook Marketplace as the only remaining big competitor. The competition watchdog said: “This could reduce consumer choice, increase fees or lower innovation in the supply of platforms that allow people to buy and sell goods online”. Adevinta and eBay have until February 23 to offer legally binding solutions to resolve the CMA’s competition concerns.
UK well placed to bounce back
Ambrose Evans-Pritchard in the Telegraph says the UK economy did not suffer a bigger contraction than the eurozone last year, despite some analysts suggesting otherwise. He says that it “never made sense that the UK’s output figures should have been exceptionally disastrous”, adding that close analysis of data points to a “story of apples and oranges”, arguing that confusion over figures is due to measurement models that have delivered “an epidemic of bogus quantification”. Mr Evans-Pritchard highlights that like-for-like nominal GDP contraction was 10% in Spain, 6.2% in France, 4.8% in the UK, 3.8% in Germany and 2.3% in the US. Neil Shearing from Capital Economics says the UK is “clustered in the middle of the pack with Germany, France, and Italy”, adding:” We might beat some of the others and get back to pre-pandemic levels by the end of this year, if there are no nasty surprises”. David Owen of Jefferies comments: “The UK actually outperformed other countries in Europe slightly if you look at nominal GDP, and we’re expecting another outperformance this year.” On the impact exiting the EU may have on the UK’s economic bounce-back, Mr Evans-Pritchard says that while much has been made of the immediate economic shocks of Brexit, little has been said on the “silent offsetting effects”.
Moody’s: UK leads Europe for distressed firms
Research by Moody’s has found that the UK has the highest number of distressed companies in Europe. Across the continent, there were 113 companies with a B3 negative rating or lower in December, with the UK accounting for the highest proportion with 28 distressed companies. Kristin Yeatman, vice president and senior analyst at Moody’s Investors Service, said: “We expect the number of companies rated B3 and lower to remain broadly stable over the first six months of 2021 as defaults, upgrades, and withdrawals are set to outnumber downgrades at those levels.”