Banks sweeten deals to bring in new custom
High Street banks are offering cash rewards and interest rates as high as 5% as the battle for customers heats up. Nationwide Building Society previously offered 2% fixed for 12 months on balances up to £1,500 on its FlexDirect account, but it is more than doubling the rate on offer to 5% AER. Elsewhere, banks including First Direct are offering cash to switch while Virgin Money provides a points system which gives customers tokens to spend on rewards. First Direct offers customers £150 to switch but HSBC will give you £170 if you jump to its Advance Bank Account. Meanwhile, Leeds Building Society has launched its new fixed ISA account which is offering a "market leading" 2.75% rate.
UK state-backed development bank prepares for tech valuation falls
Catherine Lewis La Torre, acting BBB chief executive, says data seen by the bank show valuations for tech companies have begun to fall in the UK, despite record high investment in small businesses.
Blackrock pushes back on SEC climate risk disclosure proposal
Aspects of the plans put forward by the US Securities and Exchange Commission to get publicly traded companies to track and disclose their greenhouse gas emissions are being opposed by Blackrock. A letter from the asset manager argued that parts of the proposal “will decrease the effectiveness of the commission’s overarching goal of providing reliable, comparable, and consistent climate-related information to investors.” BlackRock urged the SEC to revise its proposal to provide more flexibility to companies in how they report the information and to better align with global efforts.
Selling to yourself: the private equity groups that buy companies they own
The FT reports on the trend of private equity groups buying companies they already own; a move that enables them to return cash without the need to list companies or find outside buyers.
Crypto collapses lessen pressure on banks and regulators
The recent collapse of crypto assets should spur on central banks with the digital currency programmes, the Bank for International Settlements has said. BIS general manager Agustin Carstens said the recent implosions in the cryptocurrency markets proved the long-warned-about dangers of decentralised digital money are now materialising. Asked how long before international standards for CBDC interoperability might be agreed, he said: "I think in the next couple of years. Probably 12 months is too short." The FT reports on how the crypto crash brought a sigh of relief for “Tradfi” advocates while regulators should “face an easier task reining in an industry battered by price collapses they warned about.”
VW adds second layer of banks for float
Volkswagen has picked Deutsche Bank, Morgan Stanley, BNP Paribas and UniCredit as joint bookrunners to its upcoming $100bn listing of Porsche. Bank of America, Citi, Goldman Sachs and JP Morgan were named as joint global coordinators back in March, with a Porsche IPO expected to raise as much as $20bn from the sale of new shares.
Unite rejects Rolls Royce £2,000 living-cost bonus
The union representing Rolls Royce workers has rejected the offer of a £2,000 one-off payment offered by the firm to help staff with the rising cost of living. Unite said the offer "falls far short of the real cost of living challenges which our members are experiencing." The lump sum was due to begin being rolled out in August, starting with the 3,000 non-unionised staff before being paid to the remaining 11,000 unionised workers. Unite's regional secretary Paresh Patel said the union was still in negotiations with Rolls Royce about the pay offer. Rolls Royce had also offered workers a 4% increase in pay, back-dated to March, but this too has been rejected by the union.
AssetCo acquires SVM Asset Management
AssetCo, the asset management vehicle headed up by Martin Gilbert, has acquired Scottish firm SVM Asset Management Holdings for £10.7m as it looks to broaden its footprint in Scotland. The agreement between the two firms comes after AssetCo bought Edinburgh firm Saracen Fund Managers last year. Gilbert said the move to buy SVM would now boost AssetCo's footprint in Edinburgh. He added: “SVM is a well-regarded fund management firm, with a recognised investment style and a very strong investment track record. Its business model, people and product offering are its key assets, and it is core to AssetCo's ambitions.”
UK firms overload FCA with excessive information
A former top Financial Conduct Authority official has warned that firms were overburdening the regulator with excessive amounts of information and bogging down staff at the regulator. Speaking with the Following the Rules podcast, Nick Miller, said: “There is a tendency to seek to engage too much with regulators. You need to have an ongoing dialogue with regulators, but I think just having conversations with your supervisors for the sake of telling them about the latest personnel change or whatever, might be potentially very interesting to you as a firm, but not necessarily something that would generate regulatory interests.” The comments come amid growing concern over workloads and staffing pressures at the watchdog as its remit expands.
UK watchdog to review post-Brexit Visa and Mastercard fees
The Payment Systems Regulator (PSR) has announced that it will conduct two market reviews of card fees charged by Visa and Mastercard. The first review will look at why there was a fivefold post-Brexit increase in the cross-border interchange fee that Mastercard and Visa charged retailers for consumer purchases by phone or online in the European Union, the watchdog said. The second review is into fees for services that allow retailers to accept card payments. Natalie Timan, of PSR, said the regulator wanted to “make sure that merchants, and ultimately consumers, get a good deal”.
Novartis loses appeal over multiple sclerosis drug patent
A U.S. appeals court has ruled that a patent related to Novartis AG's blockbuster multiple sclerosis drug Gilenya was invalid. The Swiss drug company reported nearly $2.8bn in Gilenya sales last year and says it is considering "all available options" to defend the patent. The finding revives Chinese drugmaker HEC Pharm Co's bid to make a generic version of the drug.
Kellogg to split into three separate food businesses
Shares in Kellogg rose 2.6% on Tuesday after the US group said it would be splitting into three separate companies. Steve Cahillane, Kellogg’s chair and chief executive, said the move would provide the company with the extra agility it needed at this time while unlocking “the full potential of our businesses”.
Pill: Further rate hikes needed to tame inflation
The Bank of England’s chief economist, Huw Pill, told an Institute of Chartered Accountants in England and Wales event on Tuesday that a further tightening of monetary policy will be required to tame inflation, which has climbed to a 40-year high of 9% and is expected to peak at just over 11% in October. However, he appeared to reject a suggestion from fellow MPC member Catherine Mann, who said on Monday that the Bank should raise rates to strengthen the pound, arguing that although Threadneedle Street should be aware of “developments in the exchange rate” it did not have an exchange rate target, or a target for real incomes, but it did have a target for inflation. Sterling has fallen almost 10% this year, making imports more expensive. Mr Pill said: “I worry that thinking that we can use that very blunt tool to do many things…. can distract us from the task we’ve been given to do and end up meaning that we are much less effective in achieving that task.” Ms Mann was one of three ‘hawks’ in the MPC who voted to increase the Bank Rate half a percentage point to 1.5% at last week’s meeting. Mr Pill was one of the doves who backed a 0.25pp increase but has said that he would support faster rises if there were signs of a sustained inflationary pressures through wage increases or firms pushing up prices.
Goldman expects Fed to accept slowdown to curb inflation
The likelihood of the United States economy suffering a recession in the next 12 months has doubled from 15% to 30%, Goldman Sachs has said, with the Federal Reserve expected to continue its aggressive response to inflation “even if activity slows sharply.”