BANKING
ECB review could call for EU move for City bankers
International banks are set to find out whether they will need to move more workers from London to the EU. The European Central Bank (ECB) has been conducting a “desk mapping” review, looking into how commercial lenders have structured and staffed their hubs within the bloc. The central bank has reportedly finished these assessments and is preparing to give its feedback to banks privately. The Times’ Ben Martin says there is speculation in the City that the ECB could demand that lenders move more employees to the Continent, warning that this could put the central bank “at loggerheads” with Bank of England regulators. Nathanael Benjamin, an executive director at the Bank’s Prudential Regulation Authority, recently said that the ECB “have engaged well with us” on its review, signalling a collaborative approach. Since Brexit, banks have agreed to move about €1.2trn of assets into the EU from Britain. However, fears that large numbers of City jobs would be forced to rival European financial hubs have so far proved unfounded. Data shows that announced job relocations to the EU had totalled just over 7,000 as of the end of last month.
PRIVATE EQUITY
Apollo 'willing to finance a Twitter buyout'
Sources claim that bosses of private equity firm Apollo Global Management have discussed supporting an offer to purchase Twitter with equity or debt, with it suggested the firm could back Tesla founder Elon Musk's $43bn bid or help another buyer. The Mail notes that private-equity firm Thoma Bravo and Wall Street bank Morgan Stanley are among those also reportedly showing an interest in snapping up the social media firm.
Student property deal for Blackstone
Blackstone has sealed a $13bn deal to acquire one of America’s biggest student accommodation portfolios. The purchase of American Campus Communities gives the private equity firm, one of the US' biggest real estate investors, 166 properties across 71 universities.
INTERNATIONAL
Goldman CEO to get slice of private-equity profits
Goldman Sachs chief executive David Solomon and the banks top executives will get part of profits from the bank's private investment funds, sources have told the Wall Street Journal. In the past, the profits from the private investment funds were split evenly between the bank and the executives managing the funds. Going forward, those executives are set to receive just 35%, while Goldman's roughly 400 partners will get 10%, and 5% will go to Mr Solomon and his closest deputies.
FINANCIAL SERVICES
Regulators look to stablecoins
Crypto influencer Eloisa Marchesoni looks at stablecoins after the Treasury announced plans to regulate the digital currencies. She says Government agencies are giving stablecoins priority in the development of crypto regulation as they are the cryptoassets that most relate to current economic models, with their value pegged to that of the traditional currencies, such as the pound. Ms Marchesoni says that stablecoins are “the obvious starting point” for crypto regulation due to the fact that they are designed to minimise fluctuations in their value relative to a single currency or basket of currencies. She says regulators are looking at stablecoins and the larger digital asset industry due to “the commonly spoken buzzwords of anti-money laundering, know-your-customer, and security.” Ms Marchesoni notes that the Financial Conduct Authority will consult on a world-leading regime for the crypto-market, “one that will facilitate safe and sustainable, and, hopefully, rapid innovation.”
LV= chiefs accused of squandering owners' cash
Critics have accused LV= bosses of “frittering away” nearly £35m of members’ money under the shake-up launched by former chairman Alan Cook. Mr Cook and chief executive Mark Hartigan are already under fire for spending £33m on the attempt to sell the mutual insurer to private equity firm Bain Capital last year. The Mail says at least another £1.5m was “squandered” on bonuses and payoffs for staff who resigned.
Mastercard to link bonuses to ESG goals
Mastercard is to link all employee bonuses to ESG initiatives, expanding an initiative launched in March last year which was limited to its senior executives. Chief executive Michael Miebach said: “We're tying compensation to emissions, financial inclusion and the gender pay gap because we have a substantial impact in these areas and because they closely align with our vision”.
REAL ESTATE
Landsec offers new lease terms
Land Securities is launching a shake-up allowing retailers to rent space from just one day. The owner of Kent's Bluewater shopping centre has responded to changing shopping habits and the pandemic with a range of new lease terms. Starting with its Trinity Leeds centre, it will offer options from one day to three years to entice both established retailers and online firms wanting to try 'bricks and mortar' stores. Landsec's Nik Porter said: "A traditional, one-size-fits-all leasing model is no longer fit for purpose."
Demand for offices in the Square Mile hits new record
The demand for central London office space has hit a new record, dispelling concerns that it would decline amid a shift to remote working. Some £3.3bn has changed hands in the City over the past three months - almost a third higher than the previous record in the first quarter of 2007. It signals a year-on-year increase of 540%.
RETAIL
Easter footfall down
Analysis shows that retail footfall during Monday to Thursday last week was up by an average of 15%, with a 21.9% rise on Thursday. Footfall across all retail destinations rose by 5.8% on Good Friday from the week before, with coastal towns leading the way with growth of 33.6%. However, footfall fell by 0.1% over the weekend from the weekend before over Friday, Saturday and Monday. Analysts say that this Easter being the first since 2019 with no Covid measures was “likely a factor” in shoppers making trips in advance of the holiday, rather than on the weekend itself. In Central London, footfall over the Easter weekend was down 17.3% on pre-pandemic 2019 levels.
Cake Box rebounds from pandemic
Cake Box saw sales increase 50% for the year to March. Sales over the 10 months to March, excluding the period of full closures, increased by about 32%, with franchisees reporting 12% like-for-like growth. Cake Box said it was boosted by the opening of 31 stores over the period, taking it to 185 locations by the end of the year. CEO Sukh Chamdal said online delivery and click and collect options helped support growth, with franchisees reporting a 41% jump in online trade over the 12 months to March.
ECONOMY
IMF cuts economic growth forecast
The International Monetary Fund (IMF) has warned that the cost of living crisis and Russia’s invasion of Ukraine will slow Britain's economic recovery from the pandemic. Warning that inflation is set to remain elevated for longer than previously expected, it has cut growth forecasts for the UK. In its latest World Economic Outlook update, the IMF said it expects Britain’s GDP to grow by 3.7% this year, with this down on the 4.7% it predicted at the start of the year and the 5% it forecast in October. It also downgraded its expectations for 2023 to 1.2%, marking a decline on the 2.3% predicted in January. Official figures show GDP increased by 0.1% in February, slowing from the 0.8% posted in January. The economy grew 7.4% in 2021, having shrunk 10% in 2020 due to the pandemic. The IMF has also cut its global growth outlook for 2022 to 3.6% from 4.4%, warning that conditions have “worsened significantly” since its January update. Its report said: “Global economic prospects have been severely set back, largely because of Russia's invasion of Ukraine,” adding that “the crisis unfolds even as the global economy has not yet fully recovered from the pandemic.” The IMF also flagged that inflation was now a "clear and present danger" in many countries.