Banker fees fall £143m as M&A slows
With the coronavirus pandemic seeing corporate dealmaking grind to a halt, investment bankers’ advice fees dipped by £143m in April, with advisory fees down 63%. The total number of merger and acquisition deals in April fell 87% year-on-year, with the total value of April’s deals at £409m. Bankers earned £308m for advising on transactions and providing counsel on fundraising through loans, share issues and bonds. Companies announced around £520bn of deals in the first four months of this year, down 39% compared to last year.
Price fears see fewer mortgage deals
First-time buyers may face challenges as they look to enter the reopened property market, with banks offering fewer mortgages for those with smaller deposits amid fears house prices could collapse. Analysts from Deutsche Bank have warned that house prices could fall by more than a fifth, while Lloyds Bank has predicted that prices could fall 30% in the next three years in a worst case scenario. A report issued by Moneyfacts shows that just 30 different mortgages are available to borrowers with a 5% deposit, down from 393 before the pandemic closed the property market. The number of deals for customers with a 10% deposit has fallen from 780 to 87, while there are 251 deals available for customers able to raise a 15% deposit.
Banks requesting more financial information from applicants
With millions of people requesting credit card payment holidays from banks since the coronavirus crisis began, lenders have begun investigating customers about their ability to repay loans and mortgages. NatWest, for example, is requesting that credit card applicants inform it of whether they expect their incomes to drop during the next five years, while homeowners have been asked to sign documents at the end of the mortgage process confirming that their income is as previously declared. Andrew Hagger of MoneyComms remarked: “It's no surprise that lenders, including credit card providers, have increased the level of detail they require from borrowers applying for new or increased credit limits.”
Fraud code concern
The Mail says fraud victims are “still being brushed off” by banks, despite the launch last May of a voluntary code of conduct which set out how banks should treat customers who have been tricked into making payments. While nine major banks have signed up to the code, which carries a pledge to fully reimburse those who had done nothing wrong, UK Finance data shows just £4 in every £10 lost to push payment scams was refunded last year – although this marks an improvement on the £1.90 per £10 refunded before the code was launched. The Mail highlights a review by the Lending Standards Board which says some banks had rejected certain claims before considering the full circumstances, while some are failing to keep records of how they make decisions.
Karma hires ex-Metro Bank banking head
Karma, a fintech firm looking to disrupt the payday loan market, has appointed Darren Schindler, ex-head of commercial banking at Metro Bank, as chief operating officer. Before his role at Metro Bank, Mr Schindler served as head of corporate at HBOS and held senior roles at Barclays Bank. He said he is “delighted to be joining Karma at a key stage in its growth”, saying the firm “offers a technologically-driven solution to ending the cycle of debt that causes so much pain and, I believe, will disrupt the short-term consumer loan market."
Private equity-owned companies miss out on bailout loans
Private equity-owned companies are missing out on coronavirus loans, with banks rejecting some applications as buyout groups’ use of debt can minimise share capital, triggering restrictions under EU state-aid rules.
Credit Suisse spying case sees regulator request mobile data
Data from the mobile phones of several Credit Suisse managers and supervisory board directors is being requested by Swiss regulators as part of an investigation into spying at the lender, with FINMA examining the culture and governance of the firm. The company hired private investigators to spy on former executive board members Iqbal Khan and Peter Goerke, a move which ultimately resulted in the departure of chief executive Tidjane Thiam.
Deutsche chairman faces investor backlash
Deutsche Bank faces a backlash after Pirc advised investors to vote for the removal of chairman Paul Achleitner due to mistakes that have "led to the disastrous state of the bank". Glass Lewis and ISS have told investors that removing the chairman was not in their best interests and so they should not vote for the proposal.
UBS eyes high net worth clients
UBS wants to double the amount of assets under management at its business targeting wealthy clients in Russia and central and eastern Europe, with it reportedly looking to high net worth clients with assets in the $5m-$100m range. UBS' wealth management head for Central and Eastern Europe, Caroline Kuhnert, has detailed an ambition to double revenues as well as assets under management over the next four or five years.
Hackers took EasyJet customer data
It has been revealed that personal details of almost 10m EasyJet customers have been stolen by hackers. More than 2,200 credit card details were accessed and 9.8m names, email addresses and travel details taken in the data breach that targeted flight and holiday bookings made between October 2019 and the beginning of March. The airline reportedly knew of the issue in January but was not able to stop the hackers until March, and only started contacting victims in April.
Qantas announces that flights will be filled to capacity
Qantas has announced that its flights will resume with full passenger loads, while mask-wearing on flights will be optional. Chief executive Alan Joyce claimed that only 22 passengers could fit on an aeroplane if the recommended social distance of 1.5m was observed.
London’s insurance market struggles to attract more women
Almost a third of firms in London’s specialist insurance and reinsurance sector have no women in the most senior positions, while average bonuses for men are seven times higher than those for women.
Britain needs a new 3i
The FT urges more growth-oriented finance for SMEs, citing the public purpose of 3i, “Europe’s most successful venture capital firm, and its precursor, the Industrial and Commercial Finance Corporation.”
Aviva appoints chairman
Aviva has appointed former Lloyds Bank finance director George Culmer as chairman. Mr Culmer, who previously held roles at RSA, Zurich and Prudential, replaces Adrian Montague.
Astrazeneca investment hits $2bn
The value of Astrazeneca’s stake in Moderna has risen to more than $2bn after shares in the American biotechnology group rose on the back of encouraging early trial results for its potential coronavirus vaccine. Astrazeneca made an initial $240m investment in Moderna in 2013, and raised its stake to 9% through a $140m investment in 2016.
Shetty sued for loans
Bavaguthu Raghuram Shetty, the founder of NMC Health, is being sued by India's Bank of Baroda as it looks to recover loans worth more than $250m.
LEISURE AND HOSPITALITY
Landmark Trust reports surge in reservations as holidaymakers stay home
The Landmark Trust is aiming to welcome guests again from July 4, as it reported an increase in bookings for its remote self-catering properties around the UK.
Workspace rent reduction extended
Workspace has announced an extension to its 50% rent reduction for tenants to the end of June, costing the office landlord some £5m per month. Chief executive Graham Clemett commented: “Despite the relaxation of some of the lockdown measures recently announced, it is still early days for many of our customers as they look to rebuild their businesses. We are keen to continue to support them at this difficult and uncertain time, so have committed now to maintain our 50% rent reduction to the end of June.”
Grand Prix in jeopardy ahead of quarantine
The Government has warned that the British Grand Prix, scheduled to take place on July 19, may not be able to get an exemption from the 14-day travel quarantine soon to be imposed on all visitors to the UK. A Formula 1 spokesman noted: “A 14-day quarantine would make it impossible to have a British Grand Prix this year. It has a major impact on literally tens of thousands of jobs linked to F1 and the supply chains. If all elite sport is to return to TV, then exemptions must be provided.”
Chancellor warns of 'severe recession’
Chancellor Rishi Sunak has warned that the UK is facing a “severe” recession, telling the Lords Economic Affairs Committee that the "jury is out" on the "degree of long-term scarring" that the coronavirus crisis and support measures rolled out to tackle it will cause. Mr Sunak said lockdown measures are having a significant impact on the economy, adding that the country is “likely to face a severe recession, the likes of which we haven't seen,” with it “not obvious there will be an immediate bounceback". He added: “We are clearly dealing with something unprecedented so economic forecasting is not as precise as it might normally be."
Bonus ban for bailout scheme firms
Large firms using the Government’s COVID-19 bailout scheme are to be banned from paying dividends and cash bonuses to executives under changes to the loan scheme. Companies wishing to borrow money from the Bank of England’s COVID Corporate Financing Facility (CCFF) beyond May 2021 will be required to commit to showing “restraint” on remuneration while debts are repaid. State-backed loans under the scheme can now be as large as £200m, up from £50m previously. The new rules apply to companies borrowing more than £50m.