Barnier faces backlash after ruling out protections for financial services
Michel Barnier, the EU’s chief negotiator, came in for criticism yesterday after ruling out protection for the City of London in a Brexit trade deal. Mr Barnier insisted earlier this week that Britain’s financial services industry will be blocked from freely trading across EU borders. Brexit-backing pressure group Change Britain said that other EU nations had signalled that they want access to the UK's financial services to remain open after Brexit. Meanwhile, financial services trade body TheCityUK added: “It might be Christmas but Michel Barnier doesn't need to play Scrooge.” A spokesman for Theresa May also hit back at the claims, saying the Government was “confident” of a good deal for financial services.
CYBG addresses gender pay gap
CYBG, the owner of Yorkshire and Clydesdale banks, is to link gender diversity targets to executive remuneration after revealing yesterday that its overall average hourly pay gap between male and female staff is 37%. The figure was attributed to a higher proportion of men in senior roles. CYBG, which employs more than 5,800 staff, said under an incentive plan for executive directors, part of the bonus will only be triggered if senior management is at least 38% female by 2020. At present 25% of the board and 35% of senior managers are women. Meanwhile, CYBG’s annual report revealed that CEO David Duffy earned £2.1m in the year to September 30.
Banks warned over ATM deserts
Nicky Morgan, who chairs the Treasury Select committee, has called on the Payments System Regulator to monitor plans to cut ATM fees and to “intervene effectively if consumer needs were jeopardised”. Mrs Morgan said: “Reports on the future of free-to-use ATMs have left many consumers understandably concerned about their ability to access cash in the future. The relevant parties must engage constructively. If they don't, or if consumer access to cash is at risk, the regulator should not hesitate to take appropriate action. As bank closures increase, so too does the reliance on free-to-use ATMs.” Ms Morgan has threatened to haul Link chiefs, bank bosses and independent ATM operators in front of the Treasury committee unless a sensible solution is found.
900,000 more try basic banking
Government figures show that more than 900,000 "no-frills" basic bank accounts were opened in the year to June bringing the number of the fee-free accounts to five million. The accounts offer people somewhere to have income paid in, as well as a place from which to pay bills, but they tend not to come with added features such as an overdraft.
Banking data revolution running late
Five of the nine banks ordered to be ready for the incoming Open Banking “revolution” by mid-January will miss the deadline, according to the Competition and Markets Authority, which has given a maximum of six extra weeks preparation time to Barclays, Bank of Ireland, RBS and HSBC. Santander-owned Cater Allen, a private bank that has 40,000 active business current accounts, will miss the deadline by a year, as it needs to rebuild its IT system. Allied Irish Bank, Danske, Lloyds Banking Group and Nationwide will be ready to start on time.
MPs urge Home Office to stop immigration checks on bank accounts
More than 60 MPs, academics and campaign groups have called on the Home Office to halt an “inhumane” new policy that will see banks required to check the immigration status of account holders from January. An open letter to Amber Rudd warns that the checks could see thousands wrongly blocked from using banking services.
Brussels signals tough stance on UK bank bonuses after Brexit
The FT reports that new proposals from the European Commission could mean that investment banks in Britain will have to stick closely to EU rules on issues such as bonus caps after Brexit.
Banks should beware tech disruptors
The Standard’s Jim Armitage contends that global banks should not be complacent about technology’s entrance into financial services. He notes that Ant Financial, an arm of Alibaba, now has 800m users carrying out 200m transactions a day. He adds that Ant is spreading across Asia, eating up the bread-and-butter transaction business of retail banks, and that something similar could happen in the UK.
Blue chips drive borrowing binge to record $6.8tn in 2017
Data from Dealogic shows that blue-chip corporate borrowers accounted for more than 55% of the $6.8trn raised in 2017 through organised bond sales organised by banks.
Brydon survives shareholder vote
London Stock Exchange chairman Donald Brydon has survived a vote on his future, although nearly a quarter of the LSE’s shareholders failed to back him to remain in post. The Children's Investment Fund, run by Sir Christopher Hohn, failed in its bid to have Mr Brydon removed after 79% of voting shareholders opted to go against the motion. However, Sir Christopher has refused to give up the fight. In a letter to shareholders, he says Mr Brydon no longer commands the overwhelming support of shareholders and it is therefore “imperative that a search begins immediately for a new chairman”.
Old Mutual offloads asset management arm
Old Mutual is selling its asset management arm to TA Associates for £600m. The deal ends weeks of bidding for the business after Goldman Sachs was hired to drum up interest from potential investors. It is understood that Australian bank Macquarie was also vying to take over the division, which has assets of around £25.7bn. “The process was run in tandem with more than one party but this was the best bid in terms of execution, price, risk, structure,” a spokesman said.
River and Mercantile will finance research
Asset management group River and Mercantile will swallow the £1m-£1.5m cost of research when the new Mifid II regulation comes into force next month. The comparatively small UK asset manager Liontrust, City AM notes, last month projected the same costs estimate for research.
Bitcoin risks played down
A group of leading European economists have said that Bitcoin poses no threat to financial stability and is unlikely to rattle mainstream markets in the next couple of years. A survey of almost 50 academics from universities across Europe by the Centre for Macroeconomics and the Centre for Economic Policy Research found that most are sanguine about the risks posed by the digital currency, despite repeated warnings by senior financiers.
City of London Group to apply for licence
The City of London Group said it was gearing up to apply for a banking licence after narrowing its losses. The finance investment firm booked losses before tax of £200,000 for the six months ending in September, compared to £735,000 over the period last year.
LEISURE & HOSPITALITY
PEP ready for cabin break
Phoenix Equity Partners is to buy part of Forest Holidays, valuing the cabin break business at around £100m. Previous owner LDC, the private equity arm of Lloyds Bank, will retain a significant minority stake, alongside the Forestry Commission.
MEDIA & ENTERTAINMENT
YouTube signs Universal Music deal
YouTube has signed a global, multi-year agreement with Universal Music Group (UMG), amid plans to expand its subscription businesses. UMG said the deal would provide its artists with more flexibility and pay, and strengthen YouTube's commitment to managing music rights. YouTube also reached a deal with Warner Music Group in May.
Value growth to slow in 2018
Rics has warned that house prices will see a slowdown in 2018, with growth to be hit by the gap between incomes and property prices, tax changes and interest rate rises. The report said that transactions next year are unlikely to breach the 1.2m sales seen in both 2017 and 2016, "with political and economic uncertainty proving a hindrance as well as the lack of stock, stretched affordability, tax changes and interest rate rises". In London, a net balance of 49% of surveyors expect prices to fall over the coming year, while 4% expect the same for the South East. Northern Ireland, Scotland, Wales and the North West of England are expected to see strong price gains. Meanwhile, a Reuters poll of 28 housing market specialists suggests UK property prices will climb 1.3% in 2018, 2.3% in 2019 and 3% in 2020.
Sector warns over buying with Bitcoin
With a house in Essex this month becoming the first home in the world to be sold for Bitcoin, agents and builders have voiced concern over buying property with digital currencies. Russell Quirk, founder of eMoov, warned that a crash could hit sellers, saying: “It seems far too volatile and given the length of the property-selling process in the UK from accepting an offer to actual completion, there is a high chance that the inevitable could happen and the home seller could be left out of pocket by the time the sale goes through.”
PPF opposes Toys R Us restructuring
The Pension Protection Fund has confirmed it will vote against Toys R Us's proposed rescue plan after failing to secure assurances over the future of the company’s pension scheme. The PPF's Malcolm Weir stressed that the body had spent a significant amount of time and effort assessing the current and future financial position of the company in a bid to ensure the pension scheme would not be weakened by its CVA proposals. Toys R Us had been told to put £9m into its pension fund by the PPF, in order for it to support the toy retailer's restructuring plan. Meanwhile, Frank Field MP, chairman of the Work and Pensions Committee, has written to Toys R Us boss Steve Knights to question why the retailer handed a bumper pay increase to bosses despite falling sales and growing losses.
Employers pessimistic over jobs and economy
A report by the Recruitment and Employment Confederation (REC) has suggested that businesses are growing pessimistic about the state of the economy, in findings that echo a report from the CBI earlier this week. The recruiters’ group said that no employer thought economic conditions would be easier in 2018. It said that 51% expect economic conditions to become more challenging, and 49% said they would be the same. The REC added that employers’ hiring intentions were fluctuating, particularly for agency workers.
Cost of hiring outstrips pay rises
Companies are spending more money on hiring workers, but little of the money is finding its way into wage packets. The ONS said wage costs in the three months to September were up by 2.6% on the year but other costs of employing workers were up by 6%. Auto-enrolment pensions are one possible contributor to the rise, along with business rates and the apprenticeship levy.