Metro punished after pulling £200m bond offering
Metro Bank’s shares fell by 35.8% yesterday as traders reacted to the challenger bank’s decision to pull a £250m senior non-preferred bond offering on Monday due to insufficient interest, despite offering a yield of 7.5%. Senior non-preferred bonds are exposed to writedown or conversion into equity by the regulator if a bank is put into resolution and are required to meet European rules. In a statement Metro said: “Metro Bank has a strong capital position and therefore the flexibility to raise new capital at the right time between now and the end of the calendar year.” Metro could try again to raise debt after it publishes its third-quarter results on October 23, or it may request more time from regulators. However, John Cronin, an analyst at Goodbody, the stockbroker, said that the most likely outcome was “a sale to a third party”.
HSBC's Euribor fine scrapped
The £27.9m fine levied on HSBC in 2016 by EU antitrust regulators over rigging the Euribor financial benchmark has been annulled. Europe’s second highest court quashed the fine for “insufficient reasoning”. HSCB, Credit Agricole and JPMorgan were penalised a combined €485m by the European Commission in 2016. JPMorgan’s appeal and Credit Agricole’s challenge are both still pending. Separately, The FT considers whether HSBC’s future lies with China and speculates on whether the bank could soon be Chinese-owned - Beijing values HSBC highly thanks to its ability to raise dollar funding.
Small print baffles savers
Analysis of banks and building societies' terms and conditions by the Mail has found many documents are lengthy and hard to understand. Principality Building Society's terms and conditions run to more than 20,500 words. TSB is rated top for its personal banking terms and conditions, which includes ordinary current accounts, with text simple enough for children. But it is nearly 15,000 words long. Justin Modray, of Candid Financial Advice, says: “Banks and building societies should focus on making things simpler, not more complicated, although I suspect the latter tends to be more profitable for them.”
CYBG to cut 330 jobs after Virgin Money takeover
CYBG, the owner of Clydesdale and Yorkshire Bank, is planning to cut around 330 jobs in the wake of its £1.7bn takeover of Virgin Money. CYBG is closing three offices - in Edinburgh, Norwich and Leeds - but hopes to relocate roles where possible to other sites.
Grieving customers left ignorant of death notification service
The Mail reports that high street banks are still not pointing customers to the death notification service, which allows the bereaved to tell multiple banks a customer has died using only one form. The paper suggests that due to a high rate of form-filling errors banks want to wait for improvements to the service before they proactively refer customers.
Public remain wary of digital-only banks
A new survey has found two-fifths of UK consumers will not consider using a bank with no presence on the high street, demonstrating more needs to be done to give consumers confidence in digital-only banking.
Family offices prepare for market downturn
A survey of 360 family offices by UBS and Campden Wealth found that 55% expected the global economy to sink into a recession before the end of 2020. Some 63% of family offices believe that Brexit will be negative for the UK as a destination for investment long-term while over 90% cited tensions between the US and China as a concern. Dr Rebecca Gooch, Campden Wealth’s director of research says while family offices are not making “wholesale changes” to portfolios, mitigating risk is becoming a priority, with 45% re-aligning investment strategies and 42% building up cash reserves.
SoftBank executives baulk at big loans to invest in Vision Fund
Some SoftBank executives are resisting pressure to borrow heavily from a subsidiary company to buy into the Japanese group’s portfolio of technology companies amid an increase in the perceived risks of Vision Fund’s technology investing. Some executives have been encouraged to borrow over 10 times their salary under the programme which is described internally as a test of staff’s loyalty to founder Masayoshi Son.
Shares in private equity group EQT surge 25% after IPO
Shares in Swedish private equity firm EQT jumped from SKr67 to SKr84.57 after the group listed on Tuesday, giving it a market capitalisation of more than €7bn.
Credit Suisse disputes allegations about private investigator
Credit Suisse has challenged the account given by former wealth management head Iqbal Khan about being pursued by private investigators, hired by the bank following his defection to UBS.
Former Danske Bank chief missing in Estonia
Former Danske Bank executive Aivar Rehe, who managed the operations at the heart of a €200bn money-laundering scandal, was reported missing by his family on Monday.
China central bank head warns on strength of regional lenders
The head of China’s central bank, Yi Gang, has warned that some regional lenders had “overstretched” themselves and their major shareholders would face “primary responsibility” for any future bank failures.
Prebensen to leave Close Brothers
Close Brothers has announced that Preben Prebensen will be standing down after ten years, triggering a search for a new CEO for the banking group.
Trading costs rise after Switzerland’s loss of EU access rights
Analysis by Virtu Financial shows Switzerland’s loss of access rights to EU stock markets has concentrated trading in Zurich while raising costs for buying shares in smaller companies.
Cut airline growth in half to meet climate target, government told
The UK Government’s Climate Change Committee has said the predicted growth in air travel will need to be halved if the country is to meet its emissions commitments.
Pensions should be invested in private companies too, says report
A report written by the British Business Bank and consultancy Oliver Wyman has recommended that money from pension savers should be invested via open-ended funds to buy illiquid, unlisted stocks. The Future of Defined Contribution Pensions report says that defined-contribution schemes are missing out by not being able to invest in open-ended funds that back venture capital and other private companies. Risk would be mitigated by limiting investment in such assets to 5% of a pension scheme’s total portfolio. The Treasury-backed study argues that young people today would be 7% to 12% better off in retirement if the barriers to investment were removed.
PayPal fined over acquisition of Swedish start-up iZettle
The Competition and Markets Authority has fined PayPal for breaching rules concerning its $2.2bn acquisition of Swedish start-up iZettle. The regulator said PayPal had flouted its rules by cross-selling to customers based in the UK, resulting in a £250,000 fine. Elsewhere, Australia’s financial crime agency has ordered an audit of PayPal following concerns that the online payments company is not meeting the reporting rules aimed at fighting serious crimes such as child sex exploitation.
HKEX chief appeals again for £32bn LSE tie-up
The CEO of Hong Kong Exchanges and Clearing has repeated his plea for the London Stock Exchange to back his £32bn merger offer. Speaking at the Sibos banking conference in London's Docklands, Charles Li claimed that "together, we complete each other". The overtures failed to impress LSE boss David Schwimmer, however.
Hargreaves lets investors leave without penalty fees
Hargreaves Lansdown customers are now free to move their investments penalty-free as the firm tries to repair its reputation in the wake of the Neil Woodford scandal. Analysts say the move is designed to pre-empt the Financial Conduct Authority, which is deliberating whether to ban or restrict exit fees but has yet to announce a final decision.
Fidel secures £16.3m in funding
Citi Ventures and Royal Bank of Canada have supported an $18m (£16.3m) funding round for Soho-headquartered fintech firm Fidel – a start-up which connects developers directly to payments data from Visa, Mastercard and American Express to enable them to link up customers' credit or debit card details to their software.
LEISURE & HOSPITALITY
FRC mulling Thomas Cook investigation
The Financial Reporting Council has announced that it is considering investigating the collapse of travel company Thomas Cook. The move comes amid reports that Royal Bank of Scotland and Lloyds Bank had called for extra funding at the beginning of August – much earlier than CEO Peter Fankhauser had claimed.
Everyman plans more cinema openings
Cinema chain Everyman outlined plans for 15 further openings on Tuesday as it announced a 16% hike in revenues to £28.9m. Pre-tax profits at the firm decreased to £445,000 from £1.4m due to expansion costs.
Manufacturers predict decline over next three months
UK factories are continuing to struggle, according to the latest monthly CBI Industrial Trends Survey, weighed down by Brexit and the global manufacturing slowdown. The survey found that output expectations this month are at their lowest level since April 2009. Order books weakened and stockpiling reached the highest level since the downturn. Anna Leach, deputy chief economist at the CBI, said: “UK manufacturers have become noticeably gloomier in September.”
MEDIA & ENTERTAINMENT
Google advertising overtakes Facebook
Google has increased its share of the app installation sector eightfold in the last five years and is now the largest player in the app marketing space, according to marketing analytics firm Appsflyer, which says Google ads now drive more app downloads than adverts on rival Facebook.
M&C Saatchi hit by profit warning and accounting scandal
M&C Saatchi shares fell sharply yesterday after it warned that full-year profits would be lower than expected. The firm also said it had appointed PwC to review its books after it was caught up in an accounting scandal earlier this year.
Property transactions broadly flat, HMRC says
Property transactions in August fell year-on-year, according to new data from HMRC, with 99,890 residential deals in the month, down 0.9% on last year but up 15.8% on July 2019. The average price of newly listed homes fell by 0.2% month-on-month in September, according to Rightmove. Nick Leeming, chairman of Jackson-Stops, said: “Brexit and the recent political uncertainty has undoubtedly delayed the market’s seasonal bounce this year. Finally, after months of waiting we’ve seen a healthy uptick in transactions in August.”
WeWork’s Adam Neumann to step down as chief executive
WeWork's Adam Neumann has agreed to step down as CEO of the office rental firm saying it is in the "best interests" of the company. Mr Neumann has also agreed to cede control as he will no longer hold a majority of voting rights. The FT suggests JP Morgan’s support for Neumann despite his flouting of corporate governance norms risks tainting its reputation.
Sales in good shape at Moss Bros
Sales at Moss Bros rose by 1.4% to £65.3m in the six months to the end of July, although losses were £2.7m compared with £1.7m in the same period last year. The company also said that it was in “active” talks with landlords to cut rents.
Man Utd scores record revenues
Manchester United Football Club’s executive vice chairman Ed Woodward announced record fiscal revenues of £627.1m on Tuesday. However, poor performance on the pitch means the club is predicting a fall in revenues this season.
UK public borrowing soars
A change in the accounting of student loans, accepting that most will never be paid back in full, increased public sector borrowing by £12.4bn for the year ended in March. The Government borrowed almost £18bn more than previously recognised last year, £41.3bn, so the deficit is 75% bigger than first thought.