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Daily News Roundup: Wednesday, 20th March 2019

Posted: 20th March 2019


Metro facing questions over BCR grant

Metro Bank is facing questions over whether it omitted key facts and downplayed the impact of an accounting error when seeking a £120m Banking Competition Remedies (BCR) grant. Prior to receiving the grant last month, Metro had reassured the BCR that the accounting error would not have a major impact. But it subsequently announced that it needed to ask shareholders for £350m to bolster its finances. Lord Cromwell, BCR chairman, wrote to Metro this month reminding management that its application for the grant had to be "true, accurate and complete and not misleading". John Mann MP, a member of the Treasury Select Committee, said the bank “has serious questions to answer over whether it is being honest with the authorities and the public,” adding that if it misled the BCR, it should be made to return the money.

Barclays calls on shareholders to vote down Bramson's board bid

Barclays has published its most detailed explanation yet of why it thinks investors should vote against Edward Bramson’s attempt to force his way on to the board. The bank published a 1,500 words explanation as to why shareholders should fend off the activist investor’s advances at its AGM in May. "The presence of Mr Bramson on the board would be detrimental to the company and result in significant disruption to the group," said Barclays chairman John McFarlane.

UBS fined £28m for misreporting transactions

UBS has been fined a record £27.6m by the Financial Conduct Authority for misreporting some 136m transactions over a period of nearly 10 years. The FCA said the bank "failed to ensure it provided complete and accurate information" in relation to around 86m transactions and filed reports on another 49m that weren't needed. A UBS spokesman said the bank has “made significant investments to enhance its transaction reporting systems and controls."

CYBG raises business banking fees after competition fund snub

Clydesdale and Yorkshire bank owner CYBG has increased its business banking fees to remain “competitive”, just weeks after missing out on a share of a £425m RBS competition fund. Earlier this month, CYBG told businesses that monthly account fees would rise for the first time since 2013 from £5 to £6.50. Separately, a report by CYBG suggests the banking industry must work to maintain trust and ensure customers are not left behind as the sector embraces technological advances. The Bank of the Future report found 81% of customers would still want to speak to someone, or visit a branch, no matter how advanced technology becomes.

Lloyds’ Horta-Osorio gives up pension perk

Lloyds Banking Group chief executive Antonio Horta-Osorio has given up his lucrative final salary pension after mounting pressure over the perk. Mr Horta-Osorio was the only employee entitled to such a pension, having overseen the ending of final salary schemes in 2014. Lloyds said in a statement on Tuesday that the change is "in line with the Investment Association guidelines for a gradual reduction in pension allowances for current executives".


PE firms make fresh bid for Inmarsat

Satellite operator Inmarsat has attracted its third takeover bid in less than a year. A consortium led by Apax Partners and Warburg Pincus has made an approach valuing the company at £2.5bn.


ECB’s doubts on national champions cast shadow over German bank tie-up

As the proposed merger between Deutsche Bank and Commerzbank gathers pace, Andrea Enria, chair of the ECB's bank supervisory agency, has criticised moves to create European champions to compete with global rivals. Meanwhile, Deutsche Bundesbank has said that in deciding to approve a potential merger between Deutsche and Commerzbank, political considerations would not be taken into account. Deutsche has hired Wall Street firm Centerview Partners to help with its merger discussions with Commerzbank, which is being advised by Goldman Sachs, Rothschild and Hengeler Mueller.

China banks face huge capital hole as stimulus spurs lending

Listed Chinese banks will need to raise $260bn in fresh capital over the next three years following a fresh round of Chinese credit stimulus and rules to curb off-balance-sheet lending.


US orders review of 737 Max licencing

The US government has ordered a review of the way Boeing's 737 Max aircraft got its licence to fly. It comes after two crashes in five months, amid suggestions from experts that there were "clear similarities" between the disasters.


Kier Group appoints new chief

Andrew Davies has been appointed chief executive at Kier Group, less than two months after the firm ousted Haydn Mursell following a £264m emergency rescue rights issue. Executive chairman Philip Cox commented: “Andrew has a strong track record of business leadership and his operational experience across a number of sectors, combined with his strategic approach, make him an excellent fit for Kier”.


Standard Life Aberdeen claims victory in Lloyds dispute

Standard Life Aberdeen has claimed victory in its conflict with Lloyds Banking Group over a £100bn contract for one of Europe’s largest investment mandates. It comes after Lloyds said it would ditch its £106bn asset management contract with Aberdeen as a result of the group’s merger with Standard Life deal. A tribunal has now ruled that Lloyds was not entitled to give notice to terminate the agreement. The decision means that Lloyds could be locked into the contract until 2022, when the agreement expires, or pay to break the deal early.

Morgan demands investigation into LC&F collapse

Nicky Morgan MP, chair of the Treasury Committee, has called for an investigation into whether there were regulatory failings surrounding the collapse of London Capital & Finance (LC&F) late last year. Mrs Morgan wrote to the board of the Financial Conduct Authority (FCA), asking it to consider whether tests around the need for a statutory investigation into possible regulatory failings have been met. John Glen MP, economic secretary, was also contacted to ask the treasury to compel the FCA to require such an investigation if the FCA declines to.

ESMA issues guidance on no-deal share trading

The European Securities and Markets Authority has published guidance identifying which shares investors in the bloc could no longer trade in London in the result of a hard Brexit. The list names 6,200 shares subject to the bloc's "trading obligation", with 14 shares listed in London but deemed to have enough trading "liquidity" on EU exchanges. The Financial Conduct Authority said the guidance meant EU banks, funds and asset managers will not be able to trade some UK or EU shares in London, even where the UK is the home listing of the British or EU company.

European stocks lose appeal

A survey by Bank of America Merrill Lynch reveals European equities as the most unpopular asset class. Investors named bearish bets on European stocks as the "most crowded" trade for the first time in the monthly survey's history, with a net 32% saying the profit outlook for European stocks was unfavourable.

TP ICAP takes asset hit

UK TP ICAP has taken a £65m non-cash charge relating to the value of its assets following a profits warning last year. The interdealer broker also said it has drawn up contingency plans to move nearly 100 of its staff to cities across Europe if the UK leaves the EU without a deal.

Octopus spreads tentacles

The Times interviews Simon Rogerson, co-founder of the financial services group Octopus. “We want to be in every household in Britain,” he says. Since it was founded in 2000, Octopus has grown to 950 staff and has £7.7bn under management, almost 80% of which is from well-off retail investors.


Gym Group sees revenue and profit boost

The Gym Group has boosted revenue 35% in 2018 to £123.9m as the firm acquired 30 new gyms. With statutory profit before tax for 2018 at £10m, up from £9.2m the year previously, shares rose nearly 7% to 216p in early trading.


Ocean Outdoor posts profits boost amid plans to expand

Ocean Outdoor has posted double-figure revenue and profit growth after rapid expansion last year, with revenue rising 15.2% to £62.2m in the 12 months to the end of December. Gross profit meanwhile increased 13.8% to £25.2m. Digital billings for the advertising firm made up 92.8% of total billings, up from 89.1% the previous year.


Sainsbury's and Asda promise £1bn merger price cuts

Sainsbury's and Asda say their planned merger will save them £1.6bn and allow them to pass on £1bn in price cuts to savers. The supermarket giants are battling to convince the Competition and Markets Authority to allow them to merge, after the regulator warned the move would result in higher prices and less choice.


Employment hits new record high

Employment rose by 220,000 in the three months ending in January, the biggest rise since November 2015. Total pay growth slowed to an annual rate of 3.4% during the period, down from an upwardly revised figure of 3.5% during the previous three months.

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