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Daily News Roundup: Wednesday 21st February 2018

Posted: 21st February 2018

BANKING

Corbyn wants City to become “Soviet-style capital”

Jeremy Corbyn’s pledge to rein in the financial services industry if Labour gets into power has led to a backlash from City figures, with commentator David Buik stating that the Labour leader wanted to "turn London into the last Soviet-era capital west of Pyongyang". Mr Corbyn said the City’s had an “obvious and destructive” dominance over industry and its “control of politics” was “pernicious and undemocratic." Miles Celic, chief executive of The City UK, said: "As well as providing jobs and tax revenue, this industry helps people save for a mortgage, start a business, invest in new technologies or plan for retirement." Elsewhere, Stephen Jones, chief executive of UK Finance, said “the UK finance industry plays a key role in supporting people to achieve their ambitions and contribute to the wider economy.” Clare Foges says in the Sun that “the City is the golden goose of the UK economy - and Corbyn wants to take the goose outside, strangle it, shoot it and drown it for good measure.”

HSBC profits jump to $17.2bn on Asia growth

HSBC has posted a pre-tax profit of $17.2bn (£12.3bn) in 2017, saying its focus on Asia was driving growth. The results represent a 141% jump on the $7.1bn profit of the previous year. HSBC said its pivot to Asia in recent years was paying off, with wealth management, commercial and retail banking becoming key drivers of growth. Across 2017, the bank said its pre-tax profits from Asia rose by 89.3% from a year earlier to $15.3bn - the bulk of its global profits for the year. That compares with a loss of $1.9bn recorded in Europe. Total revenues for the year rose 7% to $51.4bn, up from $48bn the year before.

Tandem launches credit card

Tandem has launched its first UK credit card promising a market-leading exchange rate. The card will offer 0.5% cashback, will have no fees when being used abroad and comes with an 18.9% APR. The card will also be connected to the Tandem app, through which users can manage multiple accounts and track spending.

Carney: Bitcoin is currency failure

Bitcoin has failed as a currency measured by standard benchmarks, according to Bank of England Governor Mark Carney, who said it is neither a store of value, nor is it being used to buy things, the traditional features of money. "It has pretty much failed thus far," Mr Carney told students at Regent's University in London.

INTERNATIONAL

Six arrested over £1.2bn fraud claims

Six people have been arrested in an alleged £1.2bn Indian bank fraud case. Central Bureau of Investigation spokesman Abhished Dayal said five bank workers and an employee of main suspect Nirav Modi, a billionaire jeweller, allegedly conspired to cheat the state-run Punjab National Bank by using fake "letters of understanding" to get loans.

Latvian bank chief stays on

The head of Latvia's central bank has said he will not resign following an investigation into suspected bribery. Ilmars Rimsevics, who is also on the European Central Bank's top policymaking council, said he had "made a decision not to step down because I am not guilty".

FINANCIAL SERVICES

Incoming FCA chair grilled over tax avoidance

The Financial Conduct Authority’s incoming chair, Charles Randell, has been questioned over his involvement in a tax avoidance scheme. When quizzed by the Treasury Select Committee over his involvement with Ingenious Film Partners 2, Mr Randell told MPs it was an “error of judgement”. He said he had invested in the scheme "promoted by my financial adviser in 2006". When HMRC ruled that the tax scheme was not valid, Mr Randell had to pay back £114,000 plus interest. At the time of his investments in the Ingenious scheme he was a partner at the city law firm Slaughter and May and an advisor to the government. Robert Palmer, of Tax Justice UK, commented: “Charles Randell appears to be someone who is willing to play the system to make himself richer. It can be really tough for someone like that to crack down on abusive banks. This is self-policing by the financial elite.”

FCA explores the case for automated reporting

The Financial Conduct Authority (FCA) is seeking industry feedback on how new technology could improve regulatory reporting for businesses. The idea is that a tool developed by the regulator, the Bank of England and tech startups could lead to automated reporting, reducing costs and lowering the barrier to entry

Temenos in talks to buy UK financial data business Fidessa

Temenos is in talks to acquire Fidessa. The company said it had proposed an all-cash offer worth £36.467 per Fidessa share, valuing the UK business at more than £1.3bn.

Ford to establish German bank

Ford has confirmed that it plans to set up a bank in Germany in the second half of this year. Ford Credit Europe, an indirect subsidiary of Ford which provides financial services, has been drawing up Brexit contingency plans.

Augmentum Fintech set for IPO

Augmentum Fintech, a closed-ended investment firm backed by RIT Capital Partners, plans to raise at least £100m through an IPO in London.

LEISURE AND HOSPITALITY

William Hill fined £6m for control failures

William Hill has been hit with a £6.2m fine for "systematic social responsibility and money laundering failures". The Gambling Commission fined the bookmaker after it found customers were able to deposit large amounts of money linked to criminal offences.

MANUFACTURING

UK manufacturing output growth remains robust

Manufacturing order books and export order books remained well above their long run averages in the three months to February, despite losing some momentum from the previous month, according to the latest monthly CBI Industrial Trends Survey. Demand in the manufacturing sector should continue to be buoyed by the lower pound and buoyant global economy, the survey said. However, Anna Leach, CBI head of economic intelligence, added: “With the Brexit negotiations reaching a critical juncture, many businesses are concerned about future barriers to trade and are looking for clarity over the future relationship with the EU.”

REAL ESTATE

Big UK housebuilders increase land holdings

Data from the CPRE shows that Britain’s 10 biggest housebuilders increased the amount of land they hold with planning permission to nearly 399,000 plots in 2016, from around 330,000 in 2006 and 230,000 in 1998.

ECONOMY

Economists argue no-deal Brexit would be a massive boost for Britain

The Economists for Free Trade group has published a report into the Treasury’s Brexit impact assessment, claiming they failed to use stated government policy in their assumptions, leading to flawed projections for the UK economy after Brexit. The Alternative Brexit Impact Assessment found the economy would grow 2%-4% more if the UK is outside the EU than if it stayed in, and a that a "no deal" scenario gives Britain a £651bn boost while the EU would lose £507bn. Tory Brexiteer Iain Duncan Smith said: "This new study by some of our most respected economists […] deserves to be taken very seriously. It shows that far from depressing UK economic growth in the years to come, escaping from the EU will boost domestic economic growth and raise living standards right across the country, particularly for the poorest."

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