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Daily News Roundup: Wednesday 22nd August 2018

Posted: 22nd August 2018

BANKING

Banks must treat fraud victims fairly

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service (FOS), has said that banks should not brush off their customers as being “grossly negligent” just because they have fallen victim to a scam. She said that with frauds becoming increasingly sophisticated it is “not fair to automatically call a customer grossly negligent simply because they've fallen for a scam”. The FOS received 8,500 fraud and scam complaints last year, almost a fifth more than in 2016. The frauds included disputed cash withdrawals, identity theft and fake banking websites. According to the government, fraud is now “the most prevalent crime in this country”, with 3.3m cases in the 12 months to June 2017.

Barclays hires Goldman e-trading engineer to reboot markets business

Barclays has appointed Goldman Sachs veteran Justin Brickwood to integrate AI and machine learning into its trading platforms. It is already using AI firm Simudyne Technology to model “unpredictable events”.

HSBC’s top UK dealmaker leaves for Jefferies

Philip Noblet is leaving his role as a vice chair in global banking at HSBC to join rival Jefferies as head of UK banking. He will be joined in the move by managing director Paul Bundred and director James Thomlinson.

INTERNATIONAL

South Korea exchange ups scrutiny of Merrill Lynch trading

The Korea Exchange has said it is monitoring Merrill Lynch’s Seoul operations after media reports and petitions regarding the investment bank’s trades.

AUTOMOTIVE

Wall Street veteran Nelson Chai named as Uber finance chief

Uber has named Nelson Chai as CFO ahead of a planned IPO. Chai has previously worked as the finance chief at Merrill Lynch and the New York Stock Exchange.

AVIATION

Travel industry keen for Brexit progress

Mark Tanzer, the CEO of travel association ABTA, has warned that the industry is increasingly nervous as the deadline for a Brexit deal nears and there are no obvious signs of an arrangement being reached. He said: “We don’t see there’s been huge progress around the key issues that we raised in terms of aviation access and the ability to post key workers to support tourists and their business.” Travel companies have also reported recruitment difficulties, with EU workers unwilling to commit long-term to the UK amid the mood of uncertainty.

CONSTRUCTION

Government scrutiny of Carillion inadequate

In an interview with Channel 4’s Dispatches, former auditor general Sir John Bourn described Carillion as “like a Ponzi scheme” because it was “taking small contracts as a way of keeping the bigger contracts going.” He also told the programme that the Government should not have continued to give the outsourcing giant contracts after it issued an £845m profits warning in July 2017.

FINANCIAL SERVICES

Banking impact among no-deal studies

The first set of Government Brexit assessments set to be published tomorrow will include one outlining the impact of a no-deal scenario on Britain’s financial services industry. It is considered a surprise inclusion as Downing Street had hoped the initial batch of documents would generate little controversy. Trade body UK Finance has said the potential of a no-deal situation needed to be addressed urgently "to avoid the risk of a serious breakdown in cross-border financial services in March 2019". Its concerns centre around continuity in contracts and flows of data across the UK-EU border.

Britain enhances currency king reputation

Reuters analysis shows that in the two years since voting to leave the EU, Britain has extended its lead in the global currency trading business. Foreign exchange trading volumes in the UK had grown by 23% to a record daily average of $2.7trn (£2.1trn) in April compared to April 2016. This was double the pace of nearest rival the US, which rose 11% to $994bn. The figures mean around two-fifths of all trades are handled in Britain, nearly all of them in London, the latest indication that the City will remain a financial powerhouse after Brexit.

Halal investment platform approved

The FCA has approved the UK’s first digital halal investment platform. New York-based Wahed Invest will invest in a global portfolio of ethically responsible stocks, Islamic bonds and gold, which will be assessed by a full-time ethical review board. Wahed UK head Mohammed Ibrahim Morshed said: "For too long, the needs of the community have been overlooked, with many Muslims finding it impossible to build nest eggs that are in line with their faith."

Charter Court posts rise in profits

Charter Court has reported that its profit before tax rose 57% year-on-year to £93.1m for the first half of 2018. The Wolverhampton-based specialist bank's loan book expanded by more than £1bn year-on-year to reach £5.7bn, a 29% increase. The business has enjoyed strong growth in recent years as demand for buy-to-let mortgages has remained strong despite tax changes.

LEISURE AND HOSPITALITY

Brits shunning summer leaves Hostelworld trailing

Online booking firm Hostelworld has said Brits shunning summer getaways to enjoy the warm weather and World Cup at home will likely leave like-for-like growth in group bookings flat for the full year.

MANUFACTURING

Manufacturing growth steady but Brexit fears remain

The CBI has revealed a slowdown in order growth among manufacturers in August, although the weak pound is still benefitting the sector. The group’s latest Industrial Trends Survey showed the factory order book balance falling to +7% from +11, but this is still comfortably above the long-run. The CBI warned that Brexit uncertainty remains a risk to the growth, and said that “a ‘no deal’ scenario would be immensely damaging not just for UK manufacturers, but also the rest of the EU.”

British Steel owners on hunt for acquisitions

A leading partner at Greybull Capital has said the private equity firm is looking for deals to bulk up British Steel, which it bought for £1 two years ago.

PROFESSIONAL SERVICES

Capita hires Go-Ahead finance boss

Outsourcing group Capita has hired Patrick Butcher as CFO from transport group Go-Ahead. He will take over from Nick Greatorex, who Capita said would be stepping down last month.

REAL ESTATE

Housing transactions remain stagnant

The number of houses being bought and sold edged further down last month, with residential transactions 3.2% lower in July 2018 compared with the same month last year, according to the latest HMRC data. Deals also fell 0.8% from June to July, with 99,270 residential transactions reached. Kevin Roberts, director of Legal & General Mortgage Club, said: “A fundamental imbalance between supply and demand continues to stifle the market, and until this issue is properly addressed, homeowners will find it difficult to downsize or upsize.”

Persimmon profits jump 13% with boost from Help-To-Buy

On the back of the government’s Help-to-Buy scheme and low interest rates, housebuilder Persimmon has posted pre-tax profits of £513.8m, up 13%, for the first half of the year.

RETAIL

Shareholder backs Sainsbury’s and Asda deal

Martin Walker, UK equities fund manager at Invesco Perpetual, the third largest shareholder in Sainsbury, has resoundingly backed the grocer’s proposed £12bn merger with Asda, saying it would help the retailer to go “toe-to-toe” with Asda. Mr Walker, the first significant investor to publicly back the merger, said: “There are some real positives here in this deal and when I appraise it financially the earnings accretion are huge. The synergy costs are conservative and could be much bigger, but what I am most interested in is that the deal would appear to offer returns in excess of Sainsbury’s cost of capital.”

ECONOMY

UK posts biggest July government surplus since 2000

The government ran a £2bn July budget surplus, the biggest since 2000, the Office for National Statistics has said, with taxes on income and wealth up 6.4% on last year. Borrowing was down to £12.8bn in the first four months of this financial year from £21.3bn in the same period a year ago - the lowest figure since 2002. However, the Office for Budget Responsibility said, “one-off factors, such as changes in timing to payments to the EU and a levelling off in inflation-linked bond payments, flattered the figures”.

OTHER

Adoboli should be allowed to stay

James Moore argues in the Independent that Kweku Adoboli, the rogue trader who nearly destroyed UBS, should not be deported from the UK. He contends that Adoboli has served his time, poses no real risk of reoffending, and could be useful to Britain having given lectures and speeches on banking reform and how to prevent his actions from being repeated.

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