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Daily News Roundup: Wednesday 27th March 2019

Posted: 27th March 2019


Koenig: No imminent risks to banks from no-deal Brexit

Elke Koenig, head of the Single Resolution Board (SRB), has said that a no-deal Brexit would bring no imminent risks to Eurozone banks. She said that EU and UK financial institutions had put in the preparations to avoid financial instability. Ms Koenig commented: “There will be volatility, but given the level of preparations I hope and I am convinced there should be no imminent risks to financial stability [in a no-deal Brexit].” She added that a no-deal Brexit would have economic consequences. “The impact on real economy might have repercussions on the banking sector, but I am not expecting the problem to come straight from the banking sector,” she explained.

Co-op Bank probe to be published

The Treasury is planning to publish the long-awaited probe into the near-collapse of the Co-operative Bank today, nearly five-and-a-half years after it was ordered by George Osborne. Co-op Bank merged with the Britannia Building Society in 2009 and almost collapsed in 2013 when it tried to buy more than 630 branches from Lloyds Banking Group, only to discover a £1.5bn hole in its finances. Management, corporate governance and regulatory failures were all uncovered in investigations that followed by the Treasury Select Committee and the Financial Conduct Authority.

Apple offering ‘few perks’ not already on high street

The Telegraph's Adam Williams brushes off Apple’s new credit card as offering “few perks” that cannot already be found in the UK. While Apple boss Tim Cook claims that the launch will be “the most significant change to the credit card market in 50 years,” Mr Williams suggests that its “flashy metal card” is already available through Revolut, while digital banks such as Monzo and Starling already enable customers to track their daily spending, and Virgin Money and Sainsbury’s Bank already offer customers 28 months of interest-free spending. Meanwhile, Alex Brummer in the Mail warns Goldman Sachs, Apple’s partner on the credit card, that the tech group is on a constant learning curve and, once it has gained the expertise, has a habit of ditching partners and suppliers.

Barclays trader found guilty of rigging Euribor

A former Barclays trader has been found guilty of conspiring to rig the Euribor global interest rate. Carlo Palombo, who denied the charges, will be sentenced later. He is the eighth banker to have been convicted on Euribor rate rigging charges in Britain in a series of prosecutions brought by the SFO. Co-defendant Sisse Bohart, who also once worked at Barclays, was acquitted at Southwark Crown Court.

Shareholders could usurp Hill

Katherine Griffiths in the Times discusses whether Metro Bank’s shareholders will look to oust chairman Vernon Hill at its AGM next month. Shares in the bank have slumped by 63% since Metro admitted that it had made mistakes over the way it accounted for some corporate and buy-to-let loans.

Barclays Brexit fund

Barclays has set aside £14.2bn to help SMEs to manage any fallout from Brexit. The bank said the money is intended for companies at various stages of development. It is additional to what the bank expected to lend to SMEs between 2019 and 2021. Barclays CEO Jes Staley, said: “Barclays stands ready to help local businesses in towns, cities and rural communities, up and down the country, during this period of uncertainty.”

Crackdown on cheques

RBS and NatWest have become the first major banks to stop automatically replacing their customers’ cheque books when they run out. Since the start of this month, customers from both banks must order in advance by phone or in a branch. A NatWest spokesman says: “Cheque book usage is down 23% compared to last year.”


London-based fintechs lead the way in start-up scheme

Fintechs based in London dominate this year’s Future 50 programme, which helps British tech businesses to scale up by providing access to a peer network and contact with government decision-makers. The list includes Monzo, Revolut, Starling Bank and Salary Finance. London-based firms made up 10 of the 24 new entries on the list. The announcement comes after a bumper year for venture capital investment in the UK, with start-ups pulling in $7.9bn (£5.3bn) in funding last year.

Blackstone accused of exploiting tenants

The United Nations has accused Blackstone of exploiting tenants and warned that it is in danger of violating human rights for its practices as landlord to millions of tenants worldwide. Leilani Farha, the UN’s special rapporteur on the right to adequate housing, said that Blackstone’s methods of renting homes were “inconsistent with international human rights law with respect to the right to housing”. She accused the firm or “scooping up” repossessed or affordable houses, before upgrading them and then “substantially raising rents”, which then forced tenants out of their homes.

Moore named BVCA boss

Michael Moore, the former secretary of state for Scotland between 2010 and 2013, has been appointed the director general of the British Private Equity and Venture Capital Association.


Japanese watchdog raps Citigroup for ‘spoofing’ bond orders

The Japanese market watchdog has recommended that Citigroup is issued a Y133m (£911,000) fine over its alleged manipulation of government bond futures prices.

A merger between Deutsche and Commerzbank is a bad idea

Isabel Schnabel contends in the FT that a merger between Deutsche Bank and Commerzbank would be a bad idea. She says cost synergies may not be easy without widespread redundancies.


Airbus soars after Chinese deal

Shares in Airbus rose yesterday after news broke that the company had signed a deal worth around £25.7bn to sell 300 planes to China. According to Airbus’ latest China market forecast 2018 to 2037, China will need some 7,400 new passenger and freighters aircraft in the next 20 years. It represents more than 19% of the world total demand for over 37,400 new aircraft.


Galliford Try boss heading to Crest Nicholson

Galliford Try boss Peter Truscott is heading to rival construction firm Crest Nicholson, boosting the latter’s share price. Truscott has been brought in to capitalise on his track record of holding margins in tricky markets, first at Taylor Wimpey then at Galliford, where he oversaw a margin improvement from 15.6% to 20.7% at its housebuilding brand Linden Homes during his three-and-a-half year tenure.


Lloyd’s of London to tackle sexual harassment reports

Lloyd’s of London has unveiled a plan to tackle sexual harassment after reports that female employees face an “entrenched” culture of sexism at the insurance broker. As part of a range of measures, Lloyd’s said it would ban for life anyone found to be responsible for sexual harassment. The move comes after Bloomberg Businessweek accused the exchange of being “the most archaic corner left in global finance”. The magazine said it had spoken with 18 women who described an atmosphere of near-persistent harassment - ranging from inappropriate remarks to unwanted touching and sexual assault. Boss John Neal said: “No one should be subjected to this sort of behaviour, and if it does happen, everyone has the right to be heard and for those responsible to be held to account.”

Thomas Cook reviews finance division

Thomas Cook is set to review its financial services division in a bid to reduce costs. The review follows a recent announcement that the tour operator will close 21 branches and put 320 of its staff under consultation.


Avon Rubber secures deal

Avon Rubber has secured a $246m (£186m) contract with the US Department of Defense to supply American Special Forces with chemical and biological protection masks. The deal will run for up to seven years and includes self-contained breathing apparatus.

JCB builds sixth Indian factory

British digger manufacturer JCB is to spend £64m on a new factory in India, its biggest market. JCB said the factory in Surat would make parts for global production lines. The company already has factories in Delhi, Pune and Jaipur.


Mortgage approvals remain sluggish

Data from UK Finance has revealed that the UK housing market remained sluggish during February. Overall 39,083 mortgages were approved for house purchases, down from a revised figure of 39,910 for the previous month. The figures also show 26,890 re-mortgage loans were approved in February, which was lower than in January but slightly up compared with December 2018. UK Finance had to reissue the figures after initially suggesting that 35,299 mortgages were approved, which would have been the lowest figure since April 2013.

Watchdog steps in to help ‘mortgage prisoners’

The Financial Conduct Authority could amend its lending rules to help mortgage prisoners, unable to switch despite being up-to-date with their mortgage payments, gain access to more affordable deals. The City watchdog is proposing to amend its responsible lending rules and guidance so that lenders can choose to undertake a modified affordability assessment, and also that inactive lenders and administrators acting for unregulated entities review their customers’ books to identify eligible consumers to contact.


Ocado heads down under

Ocado has agreed a deal with Australian retailer Coles to provide it with the technology to launch an online grocery delivery service for the first time.


Cheer for UK economy

The Guardian’s monthly tracker of economic news has revealed that employment has reached the highest level of record and consumers are continuing to spend on the high street, despite Britain’s looming departure from the EU. Companies stepped up their hiring to add another 222,000 people to the workforce in the three months to January, according to the latest available figures. This took the overall number of people in work to a fresh record high of 32.7m. Despite the data, business groups said the political situation has developed into a full-blown national emergency, with the uncertainty over Brexit putting their investment plans in jeopardy.


The year’s best performing assets

New research from Fidelity International shows that US equities have been the best-performing investment in 2019 so far, ahead of UK and global equities. US equities have returned 6.8% over the course of the year so far, with UK equities up 6.6% and global equities 6.2%. Government bonds have been the worst-performing asset class, losing 4% of their value, despite being the best-performing asset last year.

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