BANKING
Hammond calls for tough disputes scheme
Chancellor Philip Hammond has called for a proposed redress scheme for small businesses to be toughened. In a letter to UK Finance chief executive Stephen Jones, Mr Hammond emphasised a need for a steering group to have "balanced representation" from banks and business representatives, saying it is “vital” that different perspectives are heard to ensure schemes are “truly robust and independent.” The all-party parliamentary group for fair business banking welcomed the call, saying it was “particularly pleased” that the Chancellor said there should be no cap on compensation payouts. Meanwhile, shadow city minister Jonathan Reynolds says a specialist tribunal for small businesses “would be a critical step towards creating a level playing field between businesses and their banks.” Writing in the Times, he adds a call for an independent compensation scheme.
Link increases fees for remote ATM operators
Link is increasing the fee it pays cash machine operators to keep remote free-to-use machines available, offering them up to £2.75 per withdrawal. A super premium introduced in April will be offered to around 3,500 free-to-use ATMs that are currently 1km or more away from the nearest free-to use ATM. Between 50 and 100 of these will be eligible for the full £2.75 subsidy. Link boss John Howells said the move will safeguard ATMs in remote and less well-off areas.
First Direct tops customer service poll
The Institute of Customer Service’s latest UK Customer Satisfaction Index has seen First Direct come out on top with a score of 86.7 out of 100, while M&S Bank was third among the 246 companies ranked. Nationwide Building Society also secured a spot in the overall top 10, coming sixth. RBS was the worst of the 15 banks in the list, scoring 73.5, putting it just below TSB.
MasterCard fined £500m over EU laws
MasterCard has been fined €570.6m by the European Commission for breaching EU anti-trust regulations, with it found to have obstructed merchants' access to cross-border card payment services. Commissioner Margrethe Vestager said MasterCard had prevented retailers from seeking cheaper fee rates outside their home country's banks and “artificially raised the costs of card payments, harming consumers and retailers in the EU."
Bankers see dip in optimism
Speaking at the World Economic Forum in Davos, Barclays chief executive Jes Staley said the mood among the banking sector has turned from "excessive optimism to heavy concern" in recent times, pointing to the impact of geopolitical uncertainty and the reversal of monetary easing. Standard Chartered's CFO Andy Halford offered a similar view, saying: “Going back a year or so there was abnormally large positivity as we went into the year. It's amazing how a year later that barometer has definitely taken two or three nudges down." Meanwhile, Credit Suisse says fears of a global systemic debt crisis are overblown, although there are “a number of specific pockets of risk.”
More savers opt for ethical banks
Ethical Consumer analysis shows that money paid into ethical banks has risen from £2,077bn to £2,518bn in 12 months. Triodos Bank, Charity Bank, Reliance Bank, Ecology Building Society and The Co-operative Bank are among those which claim to be ethical.
Savers hit by rates and living costs
Daily Mail research suggests that savers with large banks have lost as much as a fifth of their savings in real terms over the past decade, with low interest rates and a rise in the cost of living taking a toll.
Close Brothers expects ‘solid’ HY
Close Brothers expects a "solid outcome" for its fiscal half year, saying the loan book at its banking division rose to £7.5bn in the five months to December 31, compared to £7.2bn on August 1. Client assets at its asset management arm fell to £11.7bn, from £12.2bn at the end of July, with managed assets down 3%.
Barclays to cut jobs
Barclays has told 280 staff at offices in Leeds that their roles are at risk due to "changes in the business", while 115 other staff will be redeployed. About 800 people will remain at the site, which is due to close altogether in November 2021.
PRIVATE EQUITY
Ardian raises record €6bn infrastructure fund
Ardian has created the biggest infrastructure fund in Europe, with the Paris-based private equity company’s €6bn fundraising more than double the €2.7bn it raised three years ago.
Private equity bidders circle Acuris
Hellman & Friedman, Advent International, Apax Partners and EQT are reportedly interested in Acuris, owner of financial information service Mergermarket. Owner BC Partners has appointed JPMorgan Chase and Goldman Sachs to run the sale.
VC firm in £5m of deals
Par Equity closed investments worth £4.85m over a two-day spell at the end of December, partnering with the Scottish Investment Bank on all of the five deals.
INTERNATIONAL
UBS sees $862m Q4 profit
UBS has posted an $862m fourth-quarter pre-tax profit. Full-year net profit rose to $4.897bn, up from $969m in 2017 - when a one-off hit from US tax reforms dampened results. The bank saw $7.9bn in wealth management net new money outflows in Q4, with adjusted pre-tax earnings in its wealth management business down 22%. It also saw $4.9bn of investor withdrawals at its asset management business while its investment bank suffered a $47m loss compared to a $46m profit in Q4 2017. UBS warned that “historically tough” conditions experienced toward the end of 2018 are likely to drag on activity in the coming months.
FSA: Danske scandal hit Denmark’s reputation
Denmark’s Financial Supervisory Authority has warned that Denmark's reputation for being "one of the least corrupt countries in the world" has suffered "great damage" from alleged money laundering at the Estonian branch of Danske Bank. It warned that a repeat of such a scandal could hit Danish financial companies’ ability to attract investment. Lawmakers in Denmark are currently looking to tighten liability rules and boost the powers of the country’s financial regulator. Danske Bank is also facing shareholder action over the €200bn money laundering scandal. IMF Litigation Funding Services claims the bank has breached the Danish Securities Trading Act and EU anti money laundering rules.
Citi to do less in the City
Citigroup chief executive Michael Corbat says the firm will be "doing less" business in London after Brexit, saying it has prepared to move its Europe-related division to the continent.
Australian bank probe report on the horizon
Katherine Griffiths in the Times looks ahead to a report on bad practices at Australia’s banks, asset managers and insurers, saying chairman Kenneth Hayne is expected to call for reforms to the pensions market and encouragement for new banks to challenge the dominance of Westpac, ANZ Bank, Commonwealth Bank of Australia and National Australia Bank. She also considers the likelihood of Britain conducting a similar investigation.
AUTOMOTIVE
Tomtom intensifying driverless tech focus
Satnav maker Tomtom is selling its telematics business unit to tyre and rubber firm Bridgestone as it focuses on driverless car technologies. Tomtom intends to return the lion’s share of the €910m (£801m) proceeds to shareholders.
AVIATION
EasyJet flyers undeterred by Brexit
EasyJet’s revenues rose 13.7% to £1.3bn for the last three months of 2018, as the airline checked in 15.1% more passengers to a total of 21.6m. The airline said that flight disruption caused by drone sightings at Gatwick in December had cost it £15m, with £10m going on customer welfare costs and £5m in lost revenues.
CONSTRUCTION
Kier boss exits over rights issue
Kier Group chief executive Haydn Mursell has stood down from the business, with immediate effect. Kier asserted in a trading update that it remains on track to meet full year expectations, after bringing average monthly debt down to £370m for the six months through to the end of 2018, and several key contract wins, including £500m in regional building contracts in November and December.
FINANCIAL SERVICES
Ombudsman backlog worse since revamp
A whistleblower has told the Treasury select committee that the Financial Ombudsman Service’s case backlog is 10 times longer than it was before the financial complaints regulator was restructured in 2016. They added that 30,000 cases are still to reach the first stage of the complaints process, while 8,000 investigated cases are awaiting an outcome.
Fintech start-up scores £45m backing
Fintech business Nutmeg has been backed by investors including Goldman Sachs through a £45m investment round. The funding is subject to approval from the Financial Conduct Authority.
Co-op Insurance to continue legal action against IBM
Co-op Insurance has confirmed it will continue its legal proceedings against IBM following its acquisition by Markerstudy. The breach of contract lawsuit, reported to be worth £130m, was filed in December 2017. The insurer cited damages in excess of £200m due to “serious and chronic delays.”
Gilbert eyes SLA exit
Standard Life Aberdeen joint chief Martin Gilbert is preparing for retirement after 36 years at the helm. Speaking in Davos, he noted that he is the second-oldest chief executive of a British blue-chip company, “as well as the longest-serving”.
LSE breaks into cryptocurrency industry by selling trading tech
The London Stock Exchange is selling trading technology to Hong Kong-based digital asset exchange AAX. Crypto-related investment, including from venture capital, almost doubled in 2018 to $24.4bn.
IG Group revenue and profit slide after regulatory clampdown
IG Group has revealed an 18% decline in profits for the six months to the end of November, with net trading revenue down 6%, amid the tighter regulatory landscape.
Fintech adds US trading to app
Commission-free trading fintech Freetrade has introduced stateside stock trading to its app, with a curated list of 120 stocks including Apple, Amazon and Tesla. US rival Robinhood is said to be hiring in London for an impending UK launch.
LEISURE AND HOSPITALITY
Patisserie Valerie enters administration
Patisserie Valerie has entered administration after the failure of rescue talks with lenders, including HSBC and Barclays. The café chain said it did not have enough money to meet its debts. Administrators said 70 stores will close immediately, meaning a "significant number of redundancies". This comes after Patisserie Valerie uncovered "significant, and potentially fraudulent, accounting irregularities" in October.
REAL ESTATE
Number of ten-year fixes soars
Analysis reveals that the number of ten-year fixed rate mortgages available has jumped from 16 to 150 in the past five years. The moneyfacts.co.uk report also shows that the average rate on the deals is currently 3.05% - down from 4.61% at the beginning of 2014.
ECONOMY
Employment hits new high
Employment rose to a record high of 75.8% in the three months to November, according to the Office for National Statistics. The ONS also revealed that wage growth had hit a 10-year peak - up 3.3% on last year to £527 per week.
Gen Z fretting over finances
Generation Z are far more concerned about their finances this year compared to 2018, according to a study by NatWest. The bank’s research shows nearly half of 18-24 year olds expect tough financial times ahead with 44% saying the rising costs of essentials such as food and travel is the biggest financial concern.
OTHER
UBS boss fears no-deal Brexit
Axel Weber, head of UBS and chairman of the Institute of International Finance, has warned of "unthinkable consequences" for the global financial system in the event of a no-deal Brexit. Speaking on the margins of the World Economic Forum in Davos, he said: “An unmitigated, uncontrolled Brexit is the worst outcome we could imagine. Nobody wants this kind of tail-risk”. Meanwhile, Investec joint chief executive Hendrik du Toit warned that failure to deliver Brexit would “corrupt democracy.” He added the current deadlock over a deal is leaving foreign investors "very confused".