Andrew Bailey warns against easing social distancing too early
The governor of the Bank of England, Andrew Bailey, has warned that a premature end to coronavirus restrictions resulting in a further lockdown would have a severe impact on confidence and inflict further damage on the economy. In an interview with the Mail, Mr Bailey reiterated his desire to see banks getting cash to small businesses, conceding that assessing risk was “gumming-up” the operational side. “I gee up the banks regularly, he said. “The Chancellor and I are both extremely keen that credit flows to firms.” Separately, John Glen, the City minister, has written to banks thanking them for their "Herculean efforts" to support the country and promised them they will be "remembered for getting the nation through this crisis". The letter is viewed as an attempt to counter what a Treasury source described as weeks of "banker-bashing".
Pandemic hands fintech lenders a chance to prove their worth
With banks criticised for being too slow to get cash to small businesses, fintechs are seeing the COVID-19 crisis as a chance to show their value as alternative lenders. Now, Innovate Finance, the trade body for financial technology companies, is calling on the Bank of England to provide liquidity support for non-bank lenders to deliver emergency government loans.
Post Office launches cash delivery service
The Post Office has launched a new cash delivery service with the Department for Work and Pensions (DWP) to ensure the most at-risk households can access pensions and benefits. Vulnerable Post Office Card Account customers and those advised to shield by the NHS can be sent up to £2,500 cash if they do not have any other options to access their money.
NS&I keeps Premium Bond rate
National Savings and Investments (NS&I) has abandoned plans to cut rewards on Premium Bonds and Income Bonds bringing relief to some 181,000 savers. However, fixed-term accounts will see rates cut, costing savers around £38m in interest.
Expedia looking to tap private equity for $1bn
Apollo Global Management and Silver Lake could invest $1bn in Expedia as the online-booking company braces for further strains in the travel industry because of the coronavirus pandemic.
Credit Suisse shareholders advised to vote against re-electing chairman
Shareholders of Credit Suisse have been advised to vote against re-electing Chairman Urs Rohner at the bank’s annual general meeting later this month. Proxy adviser Ethos said in a statement: "Ethos recommends not to grant the discharge to the bank's governing bodies, in light of the serious governance failings revealed by the surveillance of the bank's former managers," while describing a bonus given to former Chief Executive Tidjane Thiam as "excessive".
Bank of Japan flags coronavirus risks to financial stability
Japan’s financial system “remains and will remain stable” according to the Bank of Japan, which highlighted three significant risks to lenders in the country in its semi-annual Financial System Report.
PSA reports fall in sales as a result of coronavirus
PSA Group has posted a double-digit first quarter decline in sales, with revenue of €15.2bn (£13.3bn). This represents a fall of 15.6% from the year-earlier period, with revenue from its automotive division falling to €11.9bn. CFO Philippe de Rovira remarked: “Having secured its liquidity and drastically cut its costs, the group now fully focuses on preparing the rebound in a chaotic economic environment.”
Virgin Australia goes into administration
Sir Richard Branson has warned that Virgin Atlantic will collapse without government assistance, and has offered to remortgage his Caribbean home, Necker Island, to help save the carrier. This follows the announcement that Virgin Australia has entered administration, with 16,000 jobs in jeopardy. Sir Richard stated: "We will do everything we can to keep the airline [Virgin Atlantic] going - but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.” Meanwhile, Wizz Air has been told it can access the Bank of England's emergency loan scheme for larger businesses.
London’s skyscraper boom runs out of steam
A study published by New London Architecture has concluded that work on new high-rise projects in the capital is slowing, while 60 towers were completed last year.
Admiral to refund £110m of premiums as drivers stay at home
With people driving less as a result of coronavirus restrictions, Admiral is to refund £110m of premiums to motor insurance customers, following similar moves by US firms. The FT’s Lombard says Admiral’s move is “positively enlightened” for an industry more likely to stand “on semantics to avoid claims.” Meanwhile, the bosses of Aviva, RSA and Convex are among industry leaders to join a steering group which aims to work out how customers can be covered in future without bankrupting major insurers under an avalanche of claims.
LSE to pay dividend after riding market turbulence
The London Stock Exchange Group will hand £174m to shareholders after emerging as one of the winners from the market turmoil unleashed by the coronavirus crisis. CEO David Schwimmer said that abandoning the dividend and keeping hold of excess capital would not make a difference to the performance of the business, and added: "Our balance sheet is in good shape, we continue to generate cashflow."
Envision Healthcare hires restructuring advisers
KKR-backed medical staffing group Envision Healthcare has hired advisers to help restructure its $7bn debt burden as it tries to avoid bankruptcy due to the coronavirus crisis.
LEISURE & HOSPITALITY
Fears for hospitality after lockdown
HospitalityUK has warned that a third of pubs, hotels and restaurants in Britain could close as the coronavirus lockdown is lifted. The group’s chief executive Kate Nicholls told MPs the government should allow for unpaid rent to be deferred to the end of loans or leases, or businesses will face a "mountain of debt" when quarterly payments come due in June.
MEDIA & ENTERTAINMENT
Vivendi buys stake in Lagardère ahead of activist showdown
Vivendi has bought a 10.6% stake in French media group Lagardère just as the activist hedge fund Amber Capital submits resolutions to replace most of the board.
Lenders face retail property loan pain
Research by Cass Business School suggests banks and other lenders face between £8bn and £10bn of losses and write-offs from loans made against shops, retail parks and shopping centres. More landlords are expected to default on loans and breach debt covenants as the value of shops continues to fall and income drops.
Cath Kidston closes high street stores
Cath Kidston has been sold back to its private equity owners, Baring Private Equity Asia, in a pre-pack deal that makes 900 workers redundant and closes 60 of its UK shops. About 30 staff are being kept on to work on its online business. Meanwhile, Primark has revealed that sales had dropped from £650m per month to zero as a result of all its stores closing in Europe and the US.
Joules agrees £15m credit boost with Barclays
Fashion retailer Joules has added £15m to its revolving credit facility after reaching an agreement with Barclays. This follows a number of measures to try to offset the impact of the coronavirus pandemic, including scrapping its interim dividend and reducing staff, supplier and rent costs, with the company reporting net debt of £6.9m at 19 April and cash headroom of £43.1m.
Sponsorship blow for elite women's hockey
Investec’s nine-year partnership with England's elite women's hockey league will end this summer, the bank has announced.
March sees thousands laid off in UK
Nearly 20,000 people became unemployed last month as a result of the coronavirus crisis, early estimates from the Office for National Statistics (ONS) suggest, while separate figures released by the Department for Work and Pensions show there have been 1.5m new claimants for Universal Credit since the middle of March. Labour market analyst John Philpott remarked: “Whether this has implications for how well the jobs market recovers after the lockdown is unclear but in any case we won’t be seeing the unemployment rate anywhere close to 4% for several years."