BANKING
Small businesses gain access to Financial Ombudsman Service
The Financial Conduct Authority has announced that that small businesses, with annual turnovers of below £6.5m, can now utilise the Financial Ombudsman Service to complain about banks. This means an additional 210,000 SMEs will have access to redress via the free-to-access ombudsman rather than taking a complaint through courts. Andrew Bailey, chief executive of the FCA, said: “The changes are an important extension of the ombudsman service's role and remit. We will work closely with them to ensure that they are ready, so that 'small businesses' are able to benefit from the new rules as soon as they come into force.”
Banks doing bare minimum on PPI
The consumer group Which? has said that banks could owe millions of pounds more in PPI compensation as they have paid out a “bare minimum” and not on all policies claimants held. Which? found all the high street banks - Barclays, HSBC, RBS, Lloyds, Santander and Nationwide - check only individual policies named by a claimant.
HSBC suffers IT glitch
HSBC said yesterday that some of its customers were struggling to access online banking, the second outage of the lender's digital services in weeks. Technical problems at banks have prompted concern from lawmakers, who in September called on Royal Bank of Scotland and Barclays to explain what caused the problems and how they would compensate affected customers.
Digital bank OakNorth hires former senior BoE regulator
OakNorth has appointed Martin Stewart, the Bank of England's former director of banks, building societies and credit unions, and former member of the Prudential Regulation Authority, to its advisory board.
INTERNATIONAL
Goldman beats Wall Street forecasts
Goldman Sachs beat expectations in the third quarter as revenues at its investment banking units surged. The US bank reported net income of $2.45bn (£1.86bn) almost 20% higher than the analyst consensus. Revenues came in at $8.65bn for the three months ending in September, 3.8% higher than the same period last year, while costs came in at $5.57bn, a 4% rise.
Morgan Stanley's investment banking booming
Morgan Stanley has posted a 17% rise in net income to $2.1bn for the quarter, on the back of a 26% jump in profits in its institutional securities arm. The bank reported $9.9bn in overall revenues for the three months ending in September, a 7% year-on-year increase, while equity underwriting revenues rose by 62% year-on-year to $441m. Higher asset management revenues boosted its wealth management profits to $1.2bn.
Wells Fargo applies for French licence
Wells Fargo has applied for an investment firm license in France as part of its Brexit strategy. Subject to approval, it will offer a range of capital markets and investment banking services to European and international customers. Alicia Reyes, the head of the bank's European arm, said: “Through Wells Fargo Securities Europe, we expect to leverage our network in the region and beyond by establishing a Paris hub in continental Europe.”
BlackRock faces slowing inflows on rising market jitters
Asset manager BlackRock's inflows hit a two-year low in the third quarter, after institutional investors pulled over $30bn in the period. Larry Fink blamed global uncertainty and tightening monetary policy.
AUTOMOTIVE
Uber mulls flotation
Uber is weighing up a potential flotation after the Wall Street banks advising the ride-hailing app suggested it was worth more than three times as much as Ford. Morgan Stanley has valued the firm at around £90.8bn, more than the combined market capitalisations of General Motors, Ford and Fiat Chrysler. Goldman Sachs, meanwhile, is said to have suggested a lower figure.
Volvo engines may have breached emissions limits
Volvo shares slumped yesterday after the Swedish truck maker revealed that some of its vehicle engines could be exceeding emissions limits due to a faulty component. Volvo Group indicated that the largest volume of potentially-affected engines had been sold in North America and Europe.
AVIATION
BA owner warned it will have no special treatment after Brexit
EU transport commissioner Violeta Bulc will not assert special privileges to British Airways-owner IAG, likely to be hit hard, in the event of a no-deal Brexit scenario.
CONSTRUCTION
Bellway warns Brexit may deal blow even as profits rise briskly
Brexit could still hit hard, homebuilder Bellway has warned, despite unveiling sales up 16% to £3bn in the year to July 31, with profit before tax up 14% to £641.1m. It sold 10,307 homes, up from 9,644 last year, with nearly 40% of completions backed by the government’s Help to Buy scheme. Chief executive Jason Honeyman said trading was robust but warned that the approach of Brexit “could pose a threat to consumer confidence during the busy spring selling season”.
McAlpine gets Deutsche's Moorgate contract
Landsec has awarded Sir Robert McAlpine London’s biggest building deal of the year so far, the construction of Deutsche Bank’s new headquarters above Moorgate Tube station - worth an estimated £350m.
FINANCIAL SERVICES
US and UK lobbied top harmonise financial services regulation
Financial services lobby groups The City UK and the Securities Industry and Financial Markets Association (SIFMA) in the US are urging their respective governments to increase co-operation on financial services regulation. They have formed a coalition to lobby the Treasury Department of the US and HM Treasury to enhance financial services trade between the two economies. According to City AM, the coalition will focus on three broad themes: fostering deeper regulatory cooperation, maximising cross-border market access in trade and investment and recognising the importance of the evolving technological landscape to financial services by looking at areas such as fintech and artificial intelligence.
Pensions worth £20bn left unclaimed
Research carried out on behalf of the Association of British Insurers (ABI) by the Pensions Policy Institute indicates that the UK has 1.6m pension pots worth nearly £20bn left unclaimed. Yvonne Braun, the ABI's director of long-term savings and protection, said: "These findings highlight the jaw-dropping scale of the lost pensions problem. Unclaimed pensions can make a real difference to millions of savers who have simply lost touch with their pension providers.”
Former OFT boss warns over 'radical' M&A regime changes
John Fingleton, the former head of the Office of Fair Trading (OFT), has spoken out about the government's “radical” M&A proposals, warning that they could create regulatory bureaucracy and hit foreign investment. He told the Radio 4 Today Programme: “The scale of it is almost industrial. We've had nine national security cases in the last 15 years, they're proposing 100 cases a year under the new system.”
Fund managers gloomy
Bank of America Merrill Lynch’s monthly survey has found that fund managers are at their most pessimistic on the prospects for the global economy since the financial crash in 2008. Investors are worried about global trade tensions and expectations that the US Federal Reserve will carry on its tightening policy by raising short-term interest rates.
MEDIA AND ENTERTAINMENT
BMG acquires music record label behind Buena Vista Social Club
BMG has acquired World Circuit, which specialises in music from Latin America and west Africa, for an undisclosed amount.
REAL ESTATE
Mortgage approvals to first-time buyers highest for over a year
The number of first-time buyer mortgage approvals rose to 35,500 in August, according to UK Finance's Mortgage Trends Update, up 2% on July and its highest level since June 2017. New lending to first-time homeowners hit £6.2bn, up 5.2% year-on-year. There were 38,000 new mortgages completed by home movers during August, some 2.3% down on the same month a year earlier. The value of mortgages to home movers was flat at £8.5bn. The appetite for remortgages cooled, with 37,100 new homeowner remortgages completed in the month, a 0.3% fall on the same month a year earlier. Meanwhile there were 6,000 new buy-to-let mortgages, down 13% year-on-year.
Iconic Canary Wharf tower enters the market
The iconic Citigroup tower in London’s Canary Wharf is reportedly being put up for sale for £1.2bn by AGC Equity Partners five years after it bought the flagship building for a reported £1bn.
RETAIL
CMA widens probe into grocery merger
The Competition and Market Authority will now consider the rise of discounters like Aldi and Lidl while mulling the £12bn Sainsbury’s and Asda mega-merger, as well as non-grocery competitors like B&M, Amazon and John Lewis. Stuart McIntosh, chairman of the CMA’s inquiry group, said the discounters' rapid expansion has changed customer perceptions of value: “All UK grocers have had to adapt their strategies in response; Tesco launching Jack’s is the latest example of this,” he added. The CMA’s investigation will also consider whether the tie-up could lead to less choice, higher prices or poorer quality services, and whether the merged company could use its increased buying clout to squeeze suppliers.
SPORT
Premiership Rugby deal back on the table
Premiership Rugby has said it is now “highly likely” that a deal will be struck to sell a minority stake in the competition to an investor, which is expected to generate more than £300m for the clubs involved. CVC are thought to have tabled a revised offer for a minority shareholding but now face strong competition, according to the Telegraph.
ECONOMY
Inflation biting into wage growth
Employees’ average weekly earnings received a rise of 3.1% excluding bonuses in the three months to the end of August, according to data from the Office for National Statistics. Including bonuses the figure was 2.7%. While wages grew at their fastest rate since the financial crisis, inflation ate into the gains - cutting wage growth in real terms back to 0.4% including bonuses.
OTHER
Exporters shrug off Brexit woes
A study by Santander reveals that 70% of trading firms expect to expand their international activity over the next 12 months, shrugging off any disruption that may be triggered by Brexit. However, 43% of respondents said that Brexit would negatively affect their operations. John Carroll, head of Santander UK’s international division, said: “Brexit is not deterring many from pursuing growth opportunities in the European Union and farther afield.”
More join Saudi boycott
Bosses at HSBC, Credit Suisse and Standard Chartered have become the latest to withdraw from the high profile Saudi investor conference next week. The withdrawals are in protest at the kingdom's alleged involvement in the disappearance of journalist Jamal Khashoggi.