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Daily News Roundup: Wednesday, 17th July 2019

Posted: 17th July 2019

BANKING

Banks back Investing In Women Code

Banks including RBS, Barclays, Lloyds, Santander, TSB, Metro, Co-op Bank and Bank of Ireland have signed up to a Government initiative to boost funding for female entrepreneurs. As part of the Investing in Women Code, firms will agree to boost equality for small business founders and publish gender funding data. Venture capital firms Frontline and Episode 1 have also joined in, alongside the British Business Bank and the UK Business Angels Association. However, HSBC has not signed up to the code, with officials at the bank said to be concerned about the requirement to hand over data about the gender of their customers to the Treasury.

State bank boosts funding for small firms

The British Business Bank increased funding for start-ups and smaller companies to £6.6bn in 2018-19 as it prepares to help cover the withdrawal of EU money after Brexit. The national development bank supported more than 89,000 companies with £6.6bn of funding as of the end of March - a 27% increase from £5.2bn a year earlier. Keith Morgan, its chief executive, said that the bank had "delivered strongly" against its objectives over the year.

PRIVATE EQUITY

Inmarsat buyout faces scrutiny

The Competition and Markets Authority has launched an inquiry into the £2.6bn takeover of Britain’s largest satellite communications provider Inmarsat. The regulator flagged the acquisition by Connect Bidco, a consortium including Warburg Pincus and Apax partners, to the Government amid concerns about public interest.

IQ Capital raises $300m for deep tech push

Cambridge-based venture capital firm IQ Capital has raised more than $300m to invest in long-term "deep tech" projects.

INTERNATIONAL

JP Morgan reports 16% increase in profits

JP Morgan has reported a 16% rise in second quarter profit to $9.65bn, or $2.82 per share, beating Refinitiv estimates of $2.50 per share. Lending margins were nevertheless squeezed by the tight gap between long and short term yields in the US. Revenue rose 4% from a year earlier during the quarter, hitting $28.9bn. Revenue in JP Morgan’s investment banking business fell by 14%.

Goldman boosted by strength in equities and lending

Goldman Sachs has reported revenues of $9.46bn for the second quarter, down 2% year on year but much better than the $8.8bn expected by analysts. Goldman said its investing and lending business rose 16% - its best quarterly performance in eight years - while its equity traders helped offset the falls in its fixed-income trading.

Profits climb for Wells Fargo

Wells Fargo has reported a rise in quarterly profits, comfortably beating expectations. The bank posted earnings per share of $1.30 during the second quarter of 2019, rising from $0.98 per share a year ago. Loan balances hit $949.9bn, rising $1.6bn from the previous quarter as lending in real estate, credit card and automobile all increased.

Facebook grilled on cryptocurrency plans

Facebook's plans for a cryptocurrency have come under further attack at a US hearing, with politicians on the Senate Banking Committee calling the company "delusional" and not trusted. Facebook had showed "through scandal after scandal that it doesn't deserve our trust", said senator Sherrod Brown.

Deutsche woos 13 wealth bankers from Credit Suisse

Deutsche Bank is hiring a team of 13 bankers from Credit Suisse in Italy as part of an effort to expand its wealth management business.

Lagarde resigns as head of IMF

Christine Lagarde has said she will step down as managing director of the IMF on 12 September. It comes ahead of a decision on her nomination to become head of the European Central Bank.

StanChart investors say Winters is ‘tin eared’ on pay

Standard Chartered shareholders have reiterated their intention to tackle high pay at the bank after they were branded “immature” by chief executive Bill Winters.

AVIATION

Ryanair warns on growth after grounding of Boeing Max jets

Ryanair said it would cut flights and growth forecasts following the grounding of Boeing’s 737 Max jet in the wake of two fatal crashes. But the carrier added that it “remains committed” to the jets and is confident they will be back in the air this year.

CONSTRUCTION

CRH enters deal with Blackstone

Dublin-based building materials group CRH has agreed to sell its European general builders merchants division to Blackstone for €1.64bn (£1.48bn) in cash, including net debt.

FINANCIAL SERVICES

Lloyds and Schroders launch financial planning business

The service offered by the new financial planning business from Lloyds Bank and Schroders is now open to select Lloyds customers. Schroders Personal Wealth is aimed at investors with £100,000 in savings, investments, personal pensions or as an annual income. James Rainbow, chief executive of Schroders Personal Wealth, says the aim is to be a top three UK financial planning business within five years to help plug the advice gap in the UK.

Hastings takes hit from change to payout formula

Motor insurer Hastings says it will take a one-off pre-tax charge of £8.4m this year, after the government changed the way it calculates compensation for accident victims. It follows the MoJ’s announcement that the Ogden rate will increase from -0.75% to -0.25%, a smaller rise than the insurance industry had hoped for.

MEDIA AND ENTERTAINMENT

Advertising data platform Near raises $100m

Advertising tech platform Near has secured $100m (£80m) in funding from Greater Pacific Capital, as it looks to expand its global presence. Near’s platform uses AI to help brands track real-life data from more than 1.6bn monthly users, enabling them to tap into customers’ behaviour offline as well as online.

PROFESSIONAL SERVICES

Recruiters contend with tough market

Hays has posted flat revenue growth in the last quarter of its financial year. The recruitment agency said income declined in a “tougher” private sector market in the UK and Ireland. Hays reiterated its full-year operating profit guidance, saying it will hit market expectations of £248m. Meanwhile, James Reed, chairman of Britain’s biggest recruiter Reed, has revealed that the company saw the biggest fall in job vacancies since 2010 in June, an indication that “worrying storm clouds are forming around the UK’s job market.”

Revenues surge at Gateley

Gateley has posted record results in the year to 30 April 2019. The listed law firm saw revenues rise 20% to £104m, with profit after tax increasing 10.6% to £13m.

REAL ESTATE

London Tulip skyscraper plan rejected

Sadiq Khan has advised planners to reject proposals for a new skyscraper to be built beside the Gherkin tower. The London Mayor said a number of concerns raised in a London Review Panel report meant the Tulip tower would harm the skyline and had few public benefits.

RETAIL

Anti-fraud measures could disrupt e-commerce

New anti-fraud measures coming in September are expected to cause chaos and confusion for online shoppers, as up to a third of transactions could fail. Shoppers will be required to relay passwords sent by text or email on any order of more than £27. The BRC has written to the FCA, which is implementing the new “strong customer authentication” rules, warning: “Confusion will lead to abandoned purchases, decline of valid transactions and poor customer experiences.”

Tisci boosts sales for Burberry

Burberry has reported a better-than-expected 4% rise in first-quarter like-for-like sales, boosted by new designs from chief designer Riccardo Tisci, who replaced Christopher Bailey last year. The company maintained its forecast for broadly stable revenue and operating margin at constant exchange rates for the 2020 financial year.

ECONOMY

Wage growth at highest rate since 2008

Wage growth in the UK rose to 3.6% in the year to May 2019, the highest growth rate since 2008, according to Office for National Statistics figures. Wages have been outpacing inflation since March 2018. A record high of 32.75m people were in employment up to the end of May, while 1.29m were out of work, the lowest since at least 1992. "The labour market continues to be strong," said ONS deputy head of labour market statistics Matt Hughes. "The number of self-employed part-timers has passed one and a half million for the first time, well over double what it was 25 years ago," he added. "Regular pay is growing at its fastest for nearly 11 years in cash terms, and its quickest for over three years after taking account of inflation."

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