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Daily News Roundup: Wednesday 18th April 2018

Posted: 18th April 2018


Lloyds Banking Group to close 49 branches

Lloyds Banking Group has announced that it will close 49 of its UK branches, with a loss of some 305 jobs, in the latest wave of reductions to its workforce as it promotes its digital services. The bank said the plan reflected changes in customer preferences, with more people using online services than going into branches.

Santander, NatWest and Barclays raise mortgage rates

Several banks, including Lloyds, Santander, NatWest and Halifax, have increased mortgage rates ahead of an anticipated bank rate rise. Lloyds Bank, for example, has replaced its mortgage range with new deals – the lowest rate now being 0.11 percentage points higher than before. Halifax increased a selection of its two-year fixed deals by up to 0.36 percentage points, whilst Santander has also pushed up its rates.

RBS to pay up to £3.5bn into pension scheme

RBS has agreed to pay up to £3.5bn to help plug its pension scheme deficit, marking an “important milestone” on the road to eventually resuming dividend payments. The bank will contribute an initial £2bn by the end of this year, with a further £1.5bn from 2020 depending on the bank’s dividend restarting.

Barclays considers cryptocurrency

Barclays is considering moving into cryptocurrency trading, potentially going into competition with US rival Goldman Sachs in the fast-emerging field, it has been reported.

Rothschild successor sets sights on US growth

Alexandre de Rothschild is determined to overcome history and successfully expand the eponymous bank’s presence in the US. Mr de Rothschild will become chairman of the bank next month.


Abraaj offers to step down as manager of $1bn healthcare fund

Abraaj has offered to stand down as manager of its $1bn healthcare fund, as the firm deals with investors angry about alleged misuse of funds.


Macron wants to change banking rules

Emmanuel Macron has said he wants to change the way European countries enforce banking and insurance capital rules in order to boost lending. "We have very strict rules with the result that banks lend less and less to small and medium sized companies," said the French PM. "We could modulate these rules for banks and insurance companies depending on the reality of the country and the economic cycle and that, when an economy recovers, we could guide banks targets - and that could be done by finance ministers and not only accounting and technical rules,” he continued. Mr Macron’s comments come as Paris seeks to lure American financiers away from London after Britain leaves the EU.

Goldman Sachs results “impressive”

Goldman Sachs has seen its revenue leap 25% in the first quarter of 2018 in results that analysts hailed as "pretty impressive". Its return on equity, on an annualised basis, came in at 15.4%. Marty Chavez, Goldman's CFO, said the company was "cautiously optimistic" about its outlook. Goldman also gained a boost from the recent US tax overhaul, saying its tax rate in the quarter was 17.2%, compared with an average over the past few years of about 30%.

Swiss central bank dovishness weakens franc against the euro

The Swiss franc, usually considered a financial haven at times of international uncertainty, has dropped to its weakest level against the euro since Switzerland's central bank abolished its cap to the single currency over three years ago.


Vauxhall cancels UK dealer contracts

Vauxhall is to terminate all 326 franchise contracts in the UK, as the brand begins a complete refranchising programme. Whilst the firm insisted that the majority would be taken back on new contracts, industry speculation suggests that Vauxhall will end up about 30% smaller with around 230 dealerships.

Legal tussle with former AA boss to cost £1m

The AA expects its legal tussle with former executive chairman Bob Mackenzie, over a physical altercation with Michael Lloyd, head of AA’s insurance division, to cost it up to £1m. The AA has not made a provision as the group expects to be successful in defending his claims, in the high court, seeking an injunction to retain his management value participation shares and up to £225m in damages from the company.

Aston Martin prepares for float with appointment of top banks

Aston Martin has appointed seven banks to act as bookrunners for its £4bn stock market flotation, according to recent reports. London is the most likely venue for the listing, although shareholders are also considering New York.


Zentiva sale financing to be led by Bank trio

Goldman Sachs, JP Morgan and Morgan Stanley are predicted to lead a debt financing totalling in excess of €1bn backing private equity firm Advent International's acquisition of Sanofi's European generics drugs arm, Zentiva, banking sources said.


Aluminium prices highest for years

Aluminium has hit an almost seven-year high amid the fallout of US sanctions against Russia's Rusal fuel supply concerns, which have already raised London aluminium prices by over 20% this month. Benchmark aluminium on the London Metal Exchange (LME) has hit a high of $2,435 a tonne, its highest price since September 2011.


Shareholders back Informa's UBM bid

Publishing group Informa's £3.9bn proposal to take over rival UBM, to potentially become the largest business-to-business events group in the world, has been approved by 99% of shareholders. Informa is confident of approval from the Competition and Markets Authority by the end of the second quarter.

WPP downgraded by ratings agency

Moody's has published a grim portrait of WPP and revised its outlook on the under-siege advertising behemoth to negative. The move follows the departure of CEO Sir Martin Sorrell, who has quit after 33 years in charge.


UK homeowner house purchases highest in over a decade

Homeowner house purchases reached 50,000 in February, according to the latest study on mortgage trends by UK Finance, the highest level for the month since 2007. There were 25,200 new first-time buyer mortgages completed in February 2018, up about 2.4% from the same month in 2017, and 35,400 new homeowner re-mortgages, an 11.3% increase than in the same month last year, with the resulting £6bn in re-mortgaging for the month up 11.1% year-on-year.


Primark sales hit £3.5bn

Primark bucked high street pessimism as it announced more store openings and grew sales, despite not having an e-commerce site. UK sales from existing stores grew by 3% in the 24 weeks ending March 3, allowing owner Associated British Foods to boost the interim dividend by 3% to 11.7p per share.


Wage growth chasing inflation

Using the consumer prices index (CPI) for the three months to February, average wages went up by 2.8%, just behind the 2.9% inflation rate. While the number of people in work reached a record high of 32.2m, unemployment in the period fell by 16,000 to 1.42m - the rate of 4.2% being the lowest since the three months to May 1975. The claimant count, which includes people on Jobseeker's Allowance and the unemployment element of Universal Credit, increased by 11,600 last month to 855,300, the highest for more than three years, while the number of self-employed workers fell for the second successive quarter - down by 18,000 to 4.76m.

Global growth set for seven-year high

The IMF has forecast that 2018 will be the strongest year for global growth since 2011. In its new assessment of the World Economic Outlook, the IMF predicts growth this year and next of 3.9%. For the UK, the IMF has made a modest upgrade for growth this year to 1.6%. For next year, the forecast has been slightly reduced, to 1.5%. The global financial watchdog also said the Bank of England should raise interest rates to stave off inflation.

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