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Daily News Roundup: Wednesday, 25th July 2018

Posted: 25th July 2018

BANKING

Account switches up 6%

New figures from Bacs, which oversees the current account switching service (Cass), have revealed that the number of current account customers ditching and switching bank or building society is up by 6% on a year-on-year basis. The data shows that between July 1st 2017 and June 30th 2018, 965,317 switches were completed. Figures recorded between January and March show that Halifax was the biggest gainer from customers using Cass, picking up 33,942 new account holders. It was followed by Nationwide (28,763 new customers) and HSBC (20,885 new customers). Barclays, Lloyds Bank and RBS were among those who made net losses of customers using Cass in the first quarter of 2018.

Metro Bank looks to raise £300m

Metro Bank has announced that it plans to raise £300m through a new share placing, as the challenger bank’s growth forces it to boost capital reserves earlier than expected. The bank told investors after markets closed yesterday that it was issuing 8.85m of new shares representing around 10% of the company's share capital. The lender has a market cap of close to £3bn. The bank added that the placement would help it to deliver its “future growth ambitions”. Meanwhile, Metro Bank posted a nearly four-fold jump in pre-tax profits to £20.8m. Deposits and lending were also up strongly at the bank, growing by 40% and 55% to £13.7bn and £12bn respectively.

SFO to revive Barclays' Qatar case

The Serious Fraud Office has applied to the High Court to reinstate all charges dismissed by the Crown Court against Barclays in relation to its Qatar fundraising during the financial crisis. Four of the bank's leaders at the time of the fundraising, former chief executive John Varley, Roger Jenkins, Thomas Kalaris and Richard Boath, face charges of fraud by false representation, while Mr Varley and Mr Jenkins also face charges of unlawful financial assistance.

Payments sector faces competition probe into services for SMEs

The Payments Systems Regulator (PSR) is probing whether Britain’s big banks and payments processors, like Worldpay and Wirecard, are overcharging smaller businesses amid a lack of competition. A spokesman for UK Finance said: “Card payments play a vital role in our economy, with card spending equivalent to about a third of the UK’s GDP. It is understandable, therefore, that the PSR would want to review this important market. We will be responding in due course.”

INTERNATIONAL

UBS cautious amid strong results

Swiss bank UBS has reported a 9% increase in net profit to 1.3bn Swiss francs (£1bn) for the second quarter, beating Reuters' expectations of 1.044bn francs. Profit before tax was up 12% year on year to 1.7bn francs, while adjusted PBT increased by 8% to 1.8bn francs, though UBS warned that “ongoing geopolitical tensions and rising protectionism” remain a threat.

Bank under scrutiny over market rigging

Italian financial services firm Banca Carige says it is "co-operating" with Italian authorities after reports that it is being investigated over alleged market manipulation.

Morgan Stanley hires new Head of Transformation

Morgan Stanley has hired Sigal Zarmi as head of the bank’s technology transformation arm. She will report to Rob Rooney, who became head of Morgan Stanley’s technology division earlier this year.

AUTOMOTIVE

Opel-Vauxhall back in profit

Opel-Vauxhall owner PSA has unveiled a return to profit for the car maker, with revenue of €9.9bn in the first half of 2018 and €502m in profit. PSA said overall group revenue growth had increased 40.1% up to €38.6bn (£29.3bn).

EU finds evidence car makers are manipulating results

The European Commission has found evidence that carmakers are manipulating new emissions standards that are set to come into force in two years’ time.

Banks loan carmaker Daimler €11bn to develop electric and self-driving cars

Mercedes parent Daimler has secured its coffers with an €11bn credit line, on a five-year term with two extension options, as the carmaker accelerates towards its electric and self-driving cars.

AVIATION

Qatar Airways handed £1m to market Wales

The Welsh Government has handed £1m to Qatar Airways to help market Wales as a destination around the world. The airline will also contribute £1m to the two-year partnership, which has an option to extend for a further two years for another £1m each.

Heathrow raises £1bn debt as it prepares for Brexit

John Holland-Kaye, the CEO of Heathrow, has said the airport has raised nearly £1bn in debt to keep it afloat through a “worst-case scenario” following a hard Brexit.

CONSTRUCTION

Builders report rising workloads

The Federation of Master Builders has reported that construction SMEs enjoyed rising workloads in the second quarter of 2018, despite continuing concerns over skills shortages and increasing costs. Brian Berry, chief executive of the FMB, said: “The second quarter of 2018 proved to be a positive one for the UK's builders. Our latest research shows that firms enjoyed stronger growth in workloads than they did in the first three months of this year.”

FINANCIAL SERVICES

City braced for post-Brexit job losses

A new forecast has predicted that up to 12,000 roles in London’s financial services could be lost to Europe following Brexit. Between 3,500 and 12,000 jobs are expected to go when Britain initially leaves the bloc, with more potentially following later depending on the circumstances, according to Catherine McGuinness, the City of London corporation's policy chairwoman. The potential job losses represent a fraction of the workforce in financial services and is far less than some scenarios have predicted. More than 2m people work in financial services in Britain, with about 396,000 in London. Ms McGuinness said: “We are not expecting a big Brexodus in the first instance … but depending on how things pan out in the longer term we may see many more go.”

Services sector ‘sacrificed for Brexit’, says Nelson

Former Lloyd’s of London chairman John Nelson has criticised the government for “sacrificing” the services sector “on the altar of Brexit”. In a letter to the FT, Mr Nelson said the UK has been let down by “the complete failure of our political establishment to govern, to communicate clearly with the public and, most importantly, be honest with the electorate.”

Just Group warns proposed mortgage rules could hit its capital

In a trading update, Just Group has warned that new mortgage rules proposed by the Prudential Regulation Authority could dent its capital position. The UK life insurer also reported a 62% rise in its sales of retirement products in the first half, well ahead of forecasts of City analysts.

City broker Cenkos drops 12% after warning of revenues drop

City stockbroker Cenkos Securities has indicated that full-year revenues will be “materially below” last year's figures as new regulations begin to bite the broking sector.

LEISURE AND HOSPITALITY

Fuller, Smith & Turner cautious amid sales rise

Pub chain Fuller Smith & Turner has revealed that like-for-like sales in its managed pubs and hotels rose 4% in the first 16 weeks of the year, while profits in its tenanted inns were 4% higher. The group warned that continuing Brexit uncertainty spells bad news for the sector.

MANUFACTURING

Corbyn: Bring manufacturing 'back to Britain'

A Labour government would seek to ensure “we build things here that for too long have been built abroad”, Jeremy Corbyn has said. He told the EEF manufacturers organisation that new train carriages, defence, NHS and new passports were areas where money was spent abroad. Mr Corbyn, launching his Build it in Britain campaign in Birmingham, said: “For the last 40 years... we've been told that it's good - advanced even - for our country to manufacture less and less and rely instead on cheap labour abroad to produce imports, while we focus on the City of London and the finance sector. “A lack of support for manufacturing industry is sucking the dynamism out of our economy, pay from the pockets of our workers and any hope of secure, well-paid jobs from a generation of young people.”

Mixed messages from manufacturers

A survey by the CBI has found that new manufacturing orders have continued to rise in the three months to July, with the measure of output hitting a high of +27, up from +13. However, investment plans fell back, with companies intending to cut down on spending on buildings and land.

MEDIA AND ENTERTAINMENT

Guardian halves losses

Guardian Media Group, the owner of The Guardian and The Observer, has suffered annual losses before exceptional items of £18.6m in the year to April 2018, down from £38.9m. Total revenues at the group rose by 1% to £217m, helped by a 15% rise in digital revenues to £108.6m.

REAL ESTATE

House transactions down amid ‘stagnant’ market

The number of residential property transactions dropped 3% between May and June to 96,370, according to data from HMRC, as the UK's stagnant property market shows little sign of picking up. House sales completions were 5.7% lower in June, compared with the same month last year.

RETAIL

Hammerson delays upgrade of Brent Cross

Hammerson has revealed that it plans to sell £1.1bn of properties by the end of 2019 amid the tough retail climate and also delay its planned upgrade of the Brent Cross shopping centre. The company reported that its net rental income was down 3% to £178m in the first half of the year.

ECONOMY

Rate rise still possible

According to a Guardian analysis of economic developments over the last month, the Bank of England is still considering raising interest rates although the UK economy is showing signs of weakening, and there are signs of danger from a hard Brexit.

OTHER

Pay rises announced for a million people

A million public sector workers are to receive their biggest pay rise in nearly 10 years. It includes 2.9% extra this year for the armed forces, 2.75% for prison officers and up to 3.5% for teachers. Police will see a 2% rise, the same increase seen by GPs and dentists. The move confirms the scrapping of the 1% pay cap last year and follows campaigns by unions for higher wage rises. The government said the increases were within its spending plans. Individual departments are having to fund the pay rises, rather than the money coming from the Treasury.

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