Skip to Content
Skip to Main Menu

Daily News Roundup: Wednesday , 21st October 2020

Posted: 21st October 2020


Co-op Bank appoints sixth chief executive in a decade

The Co-operative Bank has promoted chief financial officer Nick Slape to become its sixth chief executive in nine years. He replaces Andrew Bester, who announced his departure just two years into the role. Slape, who will be tasked with completing the turnaround plan started by his predecessor, will become the bank's chief executive on October 31st. Co-operative Bank chairman Bob Dench said: "As a result of robust succession planning, he is the natural choice to lead the bank as we move towards achieving sustainable profitability." Slape has previously worked at investment banking firms including Lehman Bros, Deutsche Bank and Merrill Lynch.

Moody’s downgrades three UK banks

Moody’s has downgraded the UK units of HSBC, Lloyds Banking Group and Banco Santander one notch to A1 with stable outlook from Aa3. The move comes after the credit-rating agency cut the nation’s sovereign debt rating to Aa3 last week, citing concerns over weakening economic, fiscal strength and the UK Government’s inability to reach a deal with the European Union. Moody’s said on Tuesday that the cut in the sovereign debt rating affects the ratings of banks because it may reduce the Government’s ability to support lenders.

Banking industry could establish new debt collection agency

UK Finance is conducting a feasibility study into the creation of a new agency to manage the collection of overdue government-backed bounceback loans. The new body would reduce pressure on banks to collect debt and could bring a more consistent approach to borrowers, according to the Times.

Monzo customers steel themselves for £180-a-year premium account

Monzo has launched a card made from stainless steel to accompany a new £180-a-year premium account. The “Monzo Premium” account includes benefits its previous free account did not offer, including travel insurance and a 1.5% interest rate on deposits up to £2,000. Revolut and Curve have both previously launched metal cards.

US and UK agree on transactions

The Bank of England and the US Commodities and Futures Trading Commission have signed a new agreement to cooperate on the supervision of cross-border clearing of financial transactions.

Deposits jump at Hampden & Co

Edinburgh-based private bank Hampden & Co has reporting strong third-quarter results despite the impact of coronavirus. Total lending was up 16% compared with the previous quarter at £289m and increased 77% on a year-on-year basis. Deposits were up 13% at £65m, year-on-year.


UBS reports a 99% surge in profits

UBS has posted a 99% leap in profits - its best third quarter figures for a decade - and set aside $2.5bn (£1.9bn) for investors. The company reported profit of $2.1bn in third quarter in the wake of strong trading revenues from the investment bank and good returns from its wealth management unit. Outgoing CEO Sergio Ermotti said: “It is very difficult not to be happy with this set of numbers.” Revenues for the third quarter grew 25% to $8.9bn. Meanwhile, the Times reports that UBS will provide an extra week's wages for lower-paid staff in an effort to soften the financial blow of the pandemic.

Goldman Sachs ‘to pay $2bn fine’ in 1MDB probe

Goldman Sachs has reportedly reached an agreement with the US Department of Justice (DoJ) to pay more than $2bn (£1.54bn) over its fundraising for Malaysian Sovereign wealth fund 1MDB. The deal lets the lender escape a criminal conviction. Goldman Sachs had generated about

Bank of America names EU bank head as Brexit deadline closes in

Fernando Vicario has been appointed chief executive of Bank of America’s new EU hub in Ireland as the lender finalises its Brexit preparations ahead of the year-end deal deadline.

Hong Kong banks told to report if security law broken

Hong Kong-based banks have been told to report any transactions which they believe may violate the national security law imposed on the city by Beijing in late June in new advice by the financial regulator.


Hyundai shares skid on warning of $3bn earnings hit

A new round of recalls for its electric vehicles saw shares in Hyundai Motor fall as much as 7% on Tuesday as the South Korean carmaker earmarked $3bn in provisions for the problem.


Operators say airports are losing £83m a week

The UK's airports are losing £83m a week due to COVID-19, according to analysis by the Airport Operators Association, which urged the Government to suspend air duty on passengers and retain VAT-free sales airside. Meanwhile, Heathrow is offering £80 on-the-spot Covid tests for passengers in an attempt to boost international air travel.


Bellway reveals profit hit but reinstates dividend

Pre-tax profits at Bellway Homes fell 64.3% in the year to July 31st to £237m, after coronavirus forced the housebuilder to suspend operations for months. The company nevertheless resumed paying a dividend following a rapid recovery in house sales after reopening its sites in May. Bellway said trading in the first nine weeks of the new financial year has been robust although the builder warned that a return to normal could take two to three years. In the year to the end of July, Bellway sold 7,522 homes compared to 10,892 in the prior 12 months. Overall average week reservations have increased 30.6% to 239, and the forward order book stood at £1.9bn on October 4th, compared to £1.3bn a year earlier.


Treasury launches review of financial services regulation

City Minister John Glen has launched a regulatory framework review for the UK to “take back control of the decisions” governing the country’s financial services sector. Glen said: “We now have a unique opportunity, following our departure from the European Union, to take back control of the decisions governing the sector. Over time, much of our regulatory approach to financial services has been prescribed by EU legislation and this has not always been appropriate for the UK’s financial services industry.” Glen adds in a letter to the Times that the financial services sector will continue to thrive, whatever the shape of the UK’s relationship with the EU.

Hargreaves Lansdown announces new agreement with co-founder

Hargreaves Lansdown has announced an agreement with co-founder Peter Hargreaves to enter into a new shareholder agreement which will allow Hargreaves to nominate a non-independent, non-executive director. Adrian Collins has been nominated as a shareholder representative of Hargreaves, under the terms of the new agreement that will give him the right to appoint a board member for as long as he controls at least 10% of the firm’s voting rights. Peter Hargreaves is the fund manager’s largest investor with a 24% stake.

Euronext says technical glitches weren't caused by cyberattack

Exchange operator Euronext says an outage that suspended trading in several European cities on Monday and another glitch that meant markets failed to close was not caused by a cyberattack, but by a technical failure that hit one of Euronext’s systems “in charge of managing persistence of data,” a spokesperson said. “It is a huge embarrassment to Euronext,” observed James Angel, a finance professor at Georgetown University, adding that “trading networks are very complex IT systems” and such difficulties could be expected to occur more frequently.

EU enjoys ‘outrageous demand’ for first Covid-related bond

The EU saw huge demand for an issue of new coronavirus-related bonds yesterday. The EU’s €100bn SURE programme will provide loans to support member states’ efforts to keep workers in jobs.


Google sued over anti-competitive practices

The US Justice Department has filed an antitrust lawsuit against Google’s parent company, Alphabet, claiming Google’s partnership with Apple, which sees its search engine made the default on Apple’s Safari phone browser, effectively shut out Google’s competitors from mobile distribution. Google is also accused of freezing out competition in phones that run its Android software.


Reckitt Benckiser lifts FY sales forecast

Reckitt Benckiser has lifted its full-year sales forecast, with recent quarters seeing consumers stocking up on its cleaning products. The company behind brands such as Dettol, Harpic and Lysol said third-quarter net revenue came in at £3.51bn, up from £3.21bn a year earlier. Like-for-like sales rose 19.5% in the company’s hygiene business, 12.6% in its health business and 4.1% in its nutrition business. The company's fastest-growing region was North America, with sales rising 19% on the year. Reckitt says it now expects “low double-digit” growth for the full year, up from high single digits previously forecast.


Negative rates may be needed to boost recovery

Gertjan Vlieghe, a member of the BoE’s MPC, has indicated that negative interest rates could soon be needed to boost the economy as the second Covid wave hits the recovery. Mr Vlieghe said that in countries where negative rates have been tried, “the effect has generally been positive”. The BoE has taken interest rates to a record low of 0.1% and used QE to inject more money into the system and lower rates in financial markets. However, Mr Vlieghe said that “QE is probably less potent now than in March”, which meant the Bank needed to consider other options including taking rates below zero. He said: “In my view, the outlook for monetary policy is skewed towards adding further stimulus. My own view is that the risk that negative rates end up being counterproductive to the aims of monetary policy is low.”

Close Menu