BANKING
Labour criticises Credit Suisse over tax claim
Shadow chancellor John McDonnell has accused Credit Suisse of “outrageous” behaviour after the Swiss bank kicked off a legal battle to claw back £239m of bonus taxes it paid during the financial crisis. Credit Suisse is suing HMRC to recover taxes it paid on bonuses for 2009, which were subject to a one-off levy introduced by then Labour chancellor Alistair Darling at a time of widespread anger over bankers’ pay. Mr McDonnell told the FT: “This is outrageous and Credit Suisse should pay these taxes. People in this country want the rich to shoulder their fair share of responsibilities.”
Loyal customers losing out
The Financial Services Consumer Panel (FSCP) has concluded that loyal customers should be automatically upgraded if they are losing out on deals. It comes after research carried out by FSCP found that some loyal customers may be spending as much as 10% of their income on needless "loyalty penalties" because they are stuck in poor value deals, most notably for mortgages or credit cards. It said this may be because they are "time poor" or find it hard to understand the "jargon" used by many companies. The panel also suggested the Financial Conduct Authority should expand its ongoing market research in the insurance, mortgage and investment sectors into other industries, including savings and credit cards, and calculate the total detriment to customers of the loyalty penalty.
Regulator steps up scrutiny of fintech banks
Banking applications from fintechs appear to be falling under greater scrutiny, as regulators act on concerns about risk management. According to data from Fscom, the Prudential Regulation Authority only approved four applications for banking licences in the past year, down from 14 in the previous year, despite the number of applications remaining largely flat.
INTERNATIONAL
Deutsche faces big hits on US leveraged-loan losses
Deutsche Bank is facing multimillion-dollar losses within its US investment banking unit after struggling to offload two risky corporate loans the German bank agreed to underwrite for private equity clients.
Three Chinese banks hit by US probe into North Korea links
Shares in China Merchants Bank, Shanghai Pudong Development Bank and Bank of Communications fell yesterday on fears they could be singled out for US penalties over alleged breaches of North Korean sanctions.
Former UBS executive guilty of insider trading plot
UBS's former head of compliance has been convicted of leaking inside information following an 11-week trial brought by the Financial Conduct Authority. Fabiana Abdel-Malek, 36, was convicted at Southwark Crown Court alongside her friend Walid Anis Choucair, a 40-year-old former trader, for three counts of insider dealing.
Tikehau raises €715m in fresh capital
Tikehau has raised €715m in fresh capital - the largest amount raised so far this year in France, but below the target of €800m announced by the asset manager last week.
AUTOMOTIVE
No-deal Brexit could cost car industry £70m daily
The Society of Motor Manufacturers and Traders has warned that Britain’s car makers face “crippling disruption” if a free trade deal is not secured with the EU. According to the trade body, introducing customs checks would upset the industry’s “just in time” model, with border delays for imports potentially costing the industry more than £70m a day.
FCA looking at Lookers
Car dealer group Lookers has revealed that it is being investigated by the Financial Conduct Authority over its sales practices. It said the board last year "became aware of certain matters requiring review" in some areas regulated by the FCA, adding that it appointed external advisers to examine matters including its internal control, risk assurance systems and internal audit.
AVIATION
Bombardier exits commercial aviation
Bombardier is to sell its CRJ regional jet business to Mitsubishi Heavy Industries, of Japan, for $550m in cash, marking the Canadian aircraft and train maker's exit from commercial aviation.
FINANCIAL SERVICES
FCA chief defends regulator’s performance
Andrew Bailey, head of the Financial Conduct Authority, has told MPs that the suspension of Neil Woodford’s flagship fund this month was due to a failure of rules rather than of regulation. In an evidence session with the Treasury select committee, Mr Bailey said that Woodford was “using the rules to the full” and that they need changing. He also defended the regulator from criticism that it had been to slow to respond to concerns about London Capital & Finance ahead of its collapse in January. Mr Bailey said that the FCA had intervened with the company on five different occasions between 2015 and 2018 but, because its products were not authorised, the FCA had not been aggressive enough and its risk warnings “didn’t do the job.” Meanwhile, FCA chairman Charles Randell told the committee that a 'war room' to tackle suspect investment schemes advertised online has been set up. The FT’s Matthew Vincent suggests that if Mr Bailey’s grilling by MPs was effectively a job interview for the role of Bank of England governor, he passed it with ease.
Woodford trust to ditch tech company shares
Neil Woodford’s listed investment trust is to sell its holding in an unquoted technology company for about £20m. Woodford Patient Capital Trust holds about 20% in Ultrahaptics, but is in talks to sell the stake in a deal expected to conclude this week. Woodford is expected to sell the shares at about 30% less than the price given to a recent tranche of shares in Ultrahaptics after its last fundraising round in December, which valued the company at over £150m.
London exchanges to ban Swiss stocks
London-based exchanges have warned clients that they will be unable to trade Swiss stocks after 30 June. The London Stock Exchange, Cboe Europe, Aquis Exchange and UBS have all told clients they will be unable to trade Swiss stocks in London starting next week. The move follows the EU’s failure to extend stock market equivalence to Switzerland past a 30 June deadline after Brussels grew frustrated with a lack of movement on a proposed EU-Swiss accord.
H20 funds asset loss extends to $2.6bn as crisis deepens
Six of H2O Asset Management’s funds saw their combined assets reduce by €2.6bn last week, after details emerged of their exposure to controversial German financier Lars Windhorst.
Global regulators deal blow to Facebook’s Libra currency plan
Regulators including the Financial Conduct Authority and the Financial Stability Board have said they will not allow Facebook to launch its planned digital currency without close scrutiny.
HEALTHCARE
AbbVie to acquire Botox maker Allergan for $63bn
US drugs firm AbbVie has agreed to buy Irish domiciled Botox-maker Allergan for £63bn, to hedge against potential losses from generic versions of its popular anti-inflammatory drug Humira.
REAL ESTATE
Crown Estate delivers record £343m despite property slowdown
The Crown Estate returned a record £343.5m to the Treasury in 2018, after the value of its energy, minerals and infrastructure portfolio grew about 14% to £1.6bn last year.
RETAIL
UK retail endures biggest hit in a decade
UK retail sales fell at their fastest pace in over 10 years in June, according to the Confederation of British Industry (CBI). Due in part to the warm weather, and last summer's football World Cup, the CBI survey indicated that 58% of retailers said sales volumes were lower in June than a year ago, while just 16% said they were higher.