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Daily News Roundup: Wednesday 21st August 2019

Posted: 21st August 2019


IT problems hit bank customers

Computer issues at US payments company TSYS left some bank customers unable to access account details or pay credit card bills on Tuesday. RBS and NatWest account holders reported issues with their mobile app in the early hours of Monday, with Nationwide Building Society and Tesco Bank also experiencing issues using certain services.

Bramson continues Barclays reform push

A report from Sherborne Investors, Edward Bramson’s investment vehicle, suggests that the activist investor who failed to secure a seat on Barclays’ board, is still trying to overhaul the bank. In its half-year report, Sherborne advised Barclays to heed a suggestion from Mr Bramson, who believes the bank should downsize its investment bank, saying the move would boost its "financial strength and long-term competitive position".

Get paid early with Monzo

Monzo has introduced a new "Get Paid Early" feature, whereby the challenger bank's customers will be able to receive a salary payment via BACS credit at 4pm the day before they get paid - instead of at midnight. London-based fintech Wagestream already allows, for a small fee, employees to receive a proportion of their earned salary partway through the month.

400 Scottish bank closures

A new report from the Federation of Small Businesses has found that at least 414 banks have closed in Scotland over the past four years.

Barclays launches quick access business loan

Barclays has launched £100,000 unsecured lending for small firms on its app and online banking platform, with funds to be made available within 24 hours in some cases.


Avaya could opt for sale, not merger

Telecommunications equipment and software vendor Avaya Holdings Corp is reportedly considering an all-cash offer from private equity firm Clayton, Dubilier and Rice as an alternative to a potential merger with Mitel Networks. It is noted that Avaya has been in talks with Mitel over a deal that would value it higher than what private equity firms have offered, but would require shareholders to accept stock in the combined company, while a deal with Clayton, Dubilier and Rice would enable shareholders to cash out.

MoD responds to Cobham family over takeover

Defence Secretary Ben Wallace has told the founding family of Cobham that the Government will look into its concerns over the £4bn takeover of the defence supplier by US private equity firm Advent International, a deal Lady Nadine Cobham has argued may not be in “the UK’s national interests”.


US regulators unveil final rewrite of Volcker rule

Financial regulators in the US have relaxed a rule designed to stop banks from making risky trades, introducing a series of specific tests to determine whether large banks’ positions count as proprietary trading.

Denmark’s Jyske Bank imposes negative interest rates

Jyske Bank has introduced a negative interest rate on customer deposits. The first in the country to do so, Jyske indicated that such rates appeared "rather permanent".


Improvement costs knock Persimmon's profits

Persimmon has posted a 1.4% decline in pre-tax profit, to £509.3m, for the six months ending June 30. The UK's second largest housebuilder has spent heavily on schemes to counter complaints over the quality and fire safety of its homes - 40% more on customer service than in the same period last year - leading to an estimated £15m annual increase in customer care costs alone. Persimmon said it would be introducing a “new independent team of construction quality inspectors” to help address concerns over the quality of its homes, the average selling price of which rose to £216,942 in the period – up from £215,813 a year ago.


FCA steps in over minibond firm

Blackmore Bond, an unregulated firm that had been issuing high-interest bonds to raise money to finance property developments, has closed to new investors after an intervention from the Financial Conduct Authority (FCA). The firm, which is linked to the scandal-hit London Capital & Finance, needed an FCA authorised firm to approve the financial promotions for its minibonds and had been using Northern Provident Investments, which stopped approving Blackmore’s promotions in March after holding talks with the FCA. A spokesman for Blackmore said that it “closed to new investments in March 2019 after achieving its fundraising goals”.

Failed takeover hits NSF

Neil Woodford-backed Non Standard Finance posted a pre-tax loss of £22.8m in the six months to the end of June. The decline was driven by a £12.7m charge related to its failed attempt to buy rival subprime lender Provident Financial, while a write-down in its home credit business also contributed. Meanwhile, Mr Woodford has exited a small investment from his shuttered Equity Income fund in a near-£1m sell-off, cutting his stake in AIM-listed polymers company Itaconix from 19.2% to less than 5%.

Trading floors remain male-dominated

Katherine Griffiths in the Times says trading floors “remain one of the most male-dominated enclaves of the City”. She highlights comment from Megan Butler, director of supervision at the Financial Conduct Authority, who has pointed out that only 13% of senior individuals in trading businesses are women. Ms Griffiths goes on to note that women make up 16% of high-ranking employees at investment management firms, 19% in general insurance and 18% in retail banking.


Bayer to sell animal care unit for $7.6bn

German pharmaceuticals and chemicals group Bayer is to sell its animal health unit to Elanco for $7.6bn.


Brexit 'millstone' weighing on manufacturers

UK manufacturers' output has stabilised over the last three months, according to the CBI’s monthly industrial trends survey. Over the period, 24% of the 286 businesses surveyed reported rising output, though 27% said it was down - resulting in a minus 3% balance. CBI deputy chief economist Anna Leach said: "Despite signs of stabilisation in the data this month, UK manufacturers remain on the receiving end of a double whammy: the slowdown in the global economy and Brexit uncertainty."

Wrightbus moves closer to rescue deal

Chinese engineering company Weichai, part of state-owned conglomerate Shandong Heavy Industry, has emerged as the frontrunner in the race to save bus maker Wrightbus.


Investors told to reject both offers in Sakura takeover battle

Investor advisory group ISS has advised shareholders in Sakura Sogo Reit Investment, which is the target of a hostile takeover bid from Star Asia Investment and a friendly merger with Mirai Reit, to reject both offers.


Sainsbury’s strongest among 'big four'

Sainsbury’s put in its strongest performance since November 2017 in the last quarter, and the strongest performance of all the big four grocers, according to fresh data, but still saw its market share slip 0.6% over the period. Morrisons recorded the biggest fall in sales, of 2.7%, followed by Tesco, at 1.6% and Asda, which had a 1.5% dip. The German discount retailers Aldi and Lidl made big gains. Lidl's sales leapt 7.7%, giving it a record market share of 5.9%, while Aldi posted a 6.2% increase in sales. Online grocer Ocado was the best performing, notching up a 12.6% rise.


ONS: Economy £26bn bigger than previously thought

Calculations by the Office for National Statistics (ONS) have added an extra £26bn to annual GDP. The analysis, which looks at data going back to 1997, reveals that the economy was 1.3% bigger at the end of 2016 than previously estimated. This comes after the ONS identified that Government departments and charities replace buildings, machinery and other capital more frequently, businesses develop more software in-house, and services exports are larger. The findings, which add an average of 0.1 percentage points to annual growth over the 20 year period, also show that the financial crisis was less severe than previously thought, with the economy shrinking 6% rather than the 6.3% previously calculated. On the impact of the new calculations, it is noted that national debt is now smaller as a proportion of GDP and that the new totals plug a productivity gap between the UK and other countries, having identified output that was not previously recognised.


UK’s largest firms spend £2bn on ‘key management personnel’

A report from the High Pay Centre think-tank and the Chartered Institute of Personnel and Development shows that FTSE 100 businesses spent £2bn on pay for 1,394 individuals described as "key management personnel" last year. The figures show that the median pay for CEOs fell 13% to £3.46m as chief executives shared a pot of £465.4m, meaning a pay ratio between FTSE 100 CEOs and their employees of 114:1. The report also highlights the gender gap across large firms, with only six female bosses across FTSE 100 companies in 2018, down from seven in 2017. The analysis also looked at FTSE 250 companies, noting that pay averaged £1.58m in 2016 and 2018, climbing 2% to £1.61m in 2017.

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