Nationwide profit falls 7%
Nationwide has reported a 7% drop in statutory profits to £977m for the year to 4 April, down from £1.05bn a year earlier. Joe Garner, chief executive, commented: “We anticipate modest growth in our core product markets, reflecting the outlook for the economy as a whole. With employment growth expected to slow and pressure on household budgets fading only gradually, mortgage lending is likely to rise at a fairly pedestrian pace.”
FCA tells banks to use artificial intelligence to combat crime
The Financial Conduct Authority has called on banks to use artificial intelligence and machine learning to fight crime, rather than just spending money on the issue to appear virtuous. FCA executive Megan Butler commented: “Excessive risk aversion is not going to help us win an arms race that is so heavily rooted in automation. We need to turn technology against criminals”.
High Street bank overdraft seven times more expensive than payday loan
Consumer group Which? has found that customers of major high street banks face overdraft fees that cost up to seven times more than a payday loan. A cross-party group of eighty-four MPs have joined a campaign by Which? urging the Financial Conduct Authority to crack down on the charges.
TSB had issued smartphones to replace card readers ahead of IT issues
TSB issued around 1,500 free Android smartphones to business banking customers, to replace card readers which were rendered almost useless amid its IT upgrade issues.
Bank of England tips six rate rises coming
Bank of England policymaker Gertjan Vlieghe has indicated that interest rates could rise up to six times over the next three years. Giving written evidence to the Commons' Treasury Select Committee, he said the base rate could hit 2% by 2021.
Strict climate risk rules urged for BoE
Activist investor Christopher Hohn has urged the Bank of England to introduce strict rules on how lenders deal with climate change risks.
Costa eyed by private equity firms
Costa Coffee’s owner, Whitbread, has been approached informally over a potential buyout of the café chain, with private equity groups Bain Capital, CVC and TPG believed to be interested.
Iris deal for Intermediate Capital Group
Intermediate Capital Group is nearing a deal to acquire a stake in business software provider Iris, valuing the latter at about £1.2bn.
Fresh investor pressure on Deutsche Bank chairman ahead of AGM
Paul Achleitner, chairman of Deutsche Bank, is under investor pressure after being criticised for his handling of last month’s replacement of the bank’s chief executive. Hermes Investment Management executive director Hans-Christoph Hirt commented: “Paul Achleitner has not only overseen significant CEO and management board turnover during his six-year tenure but also a number of attempts to define and implement a value creating strategy for Deutsche Bank… This included strategic U-turns, not least regarding both the bank’s retail and asset management businesses, and to date, a failure to move decisively on the troubled investment bank.”
Sberbank Turkish arm sold to focus on domestic market
Russian state-run lender Sberbank has sold its Turkish arm DenizBank for the equivalent of $3.2bn to Dubai-based Emirates NBD, allowing it to focus on the Russian market.
MEDIA AND ENTERTAINMENT
Four-year deal extension signed between BT Sport and Sunset+Vine
BT Sport and specialist sports producer Sunset+Vine have agreed a four-year extension to a deal securing coverage until the end of BT Sport’s current Premier League football rights deal.
WPP loses key client
HSBC has moved its media buying account from WPP to rival Omnicom, dealing another blow to the advertising giant after founder Sir Martin Sorrell resigned in April following claims of personal misconduct.
Sony buys majority holding in EMI Music
Sony is to spend $2.3bn (£1.7bn) acquiring another 60% stake in EMI Music Publishing, to add to the 30% it already owns.
London buyers paying twice as much as in rest of UK
Research from Lloyds Bank shows that first-time property buyers in London are paying twice as much as those in the rest of the country, spending £420,132 compared to the £210,515 outside the capital. Andrew Mason, Lloyds Bank mortgage products director, commented: “Despite the recent slowdown in London house prices this latest data shows how expensive it has become to live in the capital. This is particularly true for young people trying to get on the ladder for the first time. As a result, first-time buyers have to wait until they are 34.”
UK house sales fell in April, HMRC says
UK house sales fell 2.7% in April compared to the same month last year, according to HM Revenue and Customs' monthly UK housing transactions report, which shows that while the seasonally-adjusted estimate of house sales increased by 3.5% between March and April, transactions were 2.7% lower compared with the same month last year. Commercial real estate fared better, with the number of non-residential property transactions up 7.6% between March and April, 6.6% above the same month last year.
M&S adds 14 stores to its list of closures
Marks and Spencer has announced the closure of 14 stores over this year and next as part of its restructuring drive. The move will take the total number of closures to over 100. M&S, in announcing the latest batch of store closures, confirmed that 872 employees will be affected, with some to be redeployed while others will be made redundant. Sacha Berendji, the retailer’s retail, operations and property director, said: “Closing stores isn’t easy but it is vital for the future of M&S.”
Tesco Direct website to shut
The Tesco Direct website is to be shut down, with around 500 staff at risk of redundancy. Charles Wilson, who recently was appointed to lead Tesco's UK chain, commented: “This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future”.
Brexit has wiped up to £40bn from UK economy, Mark Carney says
Bank of England Governor Mark Carney has said the Brexit vote has already taken around £40bn, or 2% off the size of the country’s economy, with the cost to each UK household around £900. He commented: “If you look at where the economy is today, relative to that forecast, it’s more than 1% below where it was despite very large stimulus provided by the Bank of England, a fiscal easing by the government, and global and European economies, which are much much stronger than they were previously… If you adjust for those factors, the economy is about one and three-quarters – one and a half, one and three-quarters, up to 2%- lower than it would have been.”
UK deficit lowest since 2007
Public sector net borrowing in the UK dropped by £5.7bn in the last financial year to its lowest level since 2007, according to the Office for National Statistics (ONS), which pegged borrowing at £40.5bn - £4.7bn less than expected by the Office for Budgetary Responsibility (OBR). Public sector net borrowing decreased by £1.6bn in April 2018, compared with April 2017, while the deficit now stands at 2% of GDP - the smallest budget deficit as a share of GDP since 2002.
Government chasing debt-busting bank account
The government is seeking to unlock a bank account, containing £400m, set up 90 years ago by an anonymous donor to pay off the national debt. The terms of the bequest mean the money remains locked in the specially-created National Fund, so Attorney General Jeremy Wright QC has applied to the High Court to ask for the terms to be amended so that the money can be released.