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Daily News Roundup: Wednesday 18th March 2020

Posted: 18th March 2020


HSBC appoints Quinn as chief executive

HSBC has appointed interim boss Noel Quinn as chief executive officer. He took interim charge of HSBC last August after the departure of John Flint. Chairman Mark Tucker commented: “Noel has proven to be the outstanding candidate to take on a role permanently that he has performed impressively on an interim basis.” It had been suggested that Mr Tucker was eyeing an external candidate, with ING chief Ralph Hamers, who has been hired as the chief executive of UBS, among names mooted for the HSBC job. Unicredit's Jean Pierre Mustier was also said to be in the running but ruled himself out.

Banks warn on Covid-19

Banking bosses have voiced concern over the impact the coronavirus pandemic will have on their earnings. Lloyds CEO Antonio Horta-Osorio says the bank will delay part of a £3bn technology investment programme in a bid to maintain its capital levels. He told a conference organised by Morgan Stanley that a decline in consumer spending would lower Lloyds’ fee income, while also suggesting a reduction in mortgages was likely. Speaking at the same conference, RBS chief executive Alison Rose said it was “too early” to know what financial impact Covid-19 would have on the bank, but said the Bank of England’s recent rate cut was likely to hurt its income.

Regulator tells lenders to be flexible

The Financial Conduct Authority has told banks and investment managers to show flexibility in regard to loan repayments, account fees and withdrawal penalties. The FCA introduced rules in September 2018 requiring lenders to contact customers in persistent debt that they have not reduced for 18 months, with lenders able to put those who have not brought down their balances after the 18-month period onto a payment plan or cancel their cards. It has now relaxed those rules, telling lenders to give customers more time. The regulator said: “Given the challenges facing many customers at present we think they should be given more time, until 1 October 2020, to respond to firms’ communications.”

Banks borrow £3.679bn in sterling funds

Banks yesterday borrowed the largest amount of six-month sterling funds from the Bank of England (BoE) since the run-up to the 2016 Brexit referendum. The BoE issued £3.679bn in its weekly indexed long-term repo operation, with banks placing bids worth £4.369bn.

TSB refunds estimated £17.5m to fraud victims

TSB has refunded an estimated £17.5m to customers who were the victims of bank payment fraud in the year since it vowed to refund customers who fell victim to authorised push payment scams.

Payments delayed in Nationwide glitch

All incoming faster payments have been delayed by Nationwide after a fault in its system was identified, coming some months after a glitch saw all payments held in a queue. The lender announced on Twitter that “All incoming payments are delayed at the moment due to a fault. We’re working hard to have this resolved ASAP.”

Savers could see rates near zero

Sylvia Morris in the Mail says banks and building societies “have been quick off the mark to slash savings rates”, saying rates started to fall within hours of the Bank of England reducing its base rate to 0.25% last week. She says savers could soon be earning close to zero, noting that four of the top easy-access accounts have disappeared, “while fixed rates have gone into freefall”. She highlights that Lloyds, Halifax, Santander and Nationwide are reviewing their savings rates. Marcus by Goldman Sachs, Ms Morris says, is the top easy-access account, paying a variable 1.3%, while Virgin Money offers 1.31% on an account with limited withdrawals.


Tegna bids lodged

Private investment firm Najafi Companies and Trinity Broadcasting Network have offered to take US regional TV station operator Tegna private at $20 per share in a deal that values Tegna at $4.4bn. Apollo Global Management and media mogul Byron Allen have also made $20-per-share all-cash offers for Tegna.


Banks groan under accounting rules burden

A member of the ECB’s governing council has voiced concern over adoption of IFRS 9, saying the accounting rules could make banks more susceptible to highs and lows of economic cycles.

Turkey’s central bank cuts rates to soften economic blow

As it looks to soften the economic blow of the coronavirus, Turkey’s central bank has cut its benchmark interest rate by 1 percentage point to 9.75%.

Credit Suisse to offer paid leave

Credit Suisse is to offer employees who need to care for children and family members affected by the coronavirus a month of paid leave, chairman Urs Rohner and chief executive Thomas Gottstein have said in a memo.


Virus sees carmakers suspend production

Coronavirus has caused the suspension of production at all of Volkswagen’s European plants while Nissan has suspended production at its Sunderland factory, Britain’s biggest car plant. Mercedes-Benz owner Daimler will stop most European production for at least a fortnight, while Ford is halting production at its European plants - though its British engine-making operations will continue to operate for the time being.


Government intervention urged at airports

Operations at Heathrow, Gatwick and Manchester airports may have to be suspended amid the coronavirus spread, with the authorities signing a joint letter to the Prime Minister cautioning that they may “have to close passenger facilities and halt operations” with thousands of jobs “instantly at real risk”. The UK-based Airports Operators Association has called for the immediate suspension of taxes and business rates as well as a package of emergency financing, warning that other airports could be forced out of business for good within weeks.


Market rout may have hit retirement plans

Barry O'Dwyer, chief executive of Royal London, says people who have too much of their pension invested in shares may have to postpone their retirement, saying the market rout brought about by the coronavirus could mean some people approaching retirement age who moved to a riskier plan or put pension savings into the stock market for a steeper return may no longer have enough money left to live off. He told BBC Radio 4's Today: “Most financial advisers would have moved their customers out of equities. If you're in a workplace pension, your provider would have moved you out of equities into bonds as you came towards retirement,” adding: “So 'having too much money in equities' shouldn't have happened if you stuck with the default fund or have followed financial advice.”


SoftBank-owned patent firm backtracks on lawsuit

Labrador Diagnostics, a SoftBank-owned patent firm, is to grant “royalty-free licenses to third parties” using its patented technology to tackle coronavirus, after it was found that BioFire, a Utah-based firm Labrador was suing, is developing tests to detect coronavirus.


Loss of sporting fixtures hits sales at City Pub Group

The coronavirus crisis is expected to affect profits at City Pub Group, which has outlined cost-cutting plans as comparable sales decreased 4.5% in the 11 weeks to March 15, with total turnover up 11%. House broker Liberum believes profits could top £5m, compared with an initial forecast of £11.5m.


Bidders circle M&C Saatchi as board appointments made

With potential suitors such as asset management firm Dbay Advisors, and Exponent, which owns publishing firm Dennis, reportedly lining up bids for advertising agency M&C Saatchi, the firm has appointed two independent non-executive directors, with Lisa Gordon and Louise Jackson to join the board with immediate effect.


Real estate funds suspended over virus concerns

Asset managers Kames Capital and Janus Henderson have both announced the temporary suspension of their UK real estate funds as coronavirus sparks market turbulence, making it difficult to accurately value the properties contained in the funds.


Laura Ashley files for administration

Laura Ashley has filed for administration after failing to secure £15m of emergency cash to stay afloat, putting around 2,700 jobs at risk. The company said that owner MUI Asia was not willing to provide the extra cash, and could not secure a loan from elsewhere. “The Covid-19 outbreak has had an immediate and significant impact on trading, and ongoing developments indicate that this will be a sustained national situation”, the retailer said.


Coronavirus causes European Championship postponement

Uefa has decided to postpone this summer’s European Championship until the summer of 2021 as the coronavirus continues to spread across the globe. A statement said: “It will be played from 11 June to 11 July next year.”


Chancellor announces business support measures

Chancellor Rishi Sunak has unveiled £330bn worth of support designed to help businesses survive the coronavirus crisis. He announced that, on top of measures set out in his Budget last week, businesses will have access to Government-backed guaranteed loans at "attractive rates", with a £330bn pot available to firms which need money to pay rent, suppliers or staff or purchase stock. A new lending facility launched with the Bank of England will support larger companies, while SMEs will be able to borrow up to £5m with no interest due in first six months - up from the £1.2m announced in the Budget. Mr Sunak also announced that retail, leisure and hospitality companies will be exempt from business rates for a whole year, while firms with a rateable value of less than £51,000 will be given a cash grant of £25,000. The Chancellor also said banks will provide a three-month mortgage holiday for those who need it. Mr Sunak also said ministers are set to discuss a potential support package for airlines and airports. He added that the Government will work with trade unions and the industry to develop a “bold and ambitious” package of “employment support”.

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