Carney asked to stay on as BoE governor
The Evening Standard reports that Mark Carney has been quietly approached by the Government to stay on as Bank of England governor for another year. According to the paper, the Treasury is keen for him to stay on until 2020 so that he can provide continuity during the turbulence of Brexit. On the possibility of Mr Carney extending his time in the role, Ruth Lea of Arbuthnot Banking Group said: “There is a good case for Mark Carney to stay on to navigate monetary policy and the supervision of the financial sector after Brexit. Continuity would be helpful. But it would also be helpful if he could adopt a more positive tone.” Meanwhile, Mr Carney has promised to provide MPs with an analysis of the economic impacts of leaving the EU before the critical Commons vote on Brexit.
Lloyds completes share buyback
Lloyds Banking Group has completed its buyback of £1bn of shares. The London branch of UBS managed the buyback, which started on 8 March, paying for 1.6bn shares over the four-month process before selling them back to Lloyds. The bank kicked off the buyback to reduce its ordinary share capital, valuing shares at 1.4p, after opting against issuing a special dividend earlier this year in order to enact the buyback.
Holidaymakers join small banks to cut charges
The Mail reports that a number of holidaymakers are opening current accounts with small start-up banks to avoid fees when they spend abroad, with many allowing customers to use a debit card overseas free of charge while larger rivals charge fees of up to 3%. The paper highlights services at Starling Bank, Monzo and Metro Bank, and also cites Tashema Jackson of uSwitch, who says: “Now there is real choice for those who travel regularly or just want a better deal on their foreign transactions. Free - or cheaper - spending when travelling is a big draw for customers.”
Savers do not see rate rise
Moneyfacts research shows that only one bank has passed on the Bank of England's rate rise in full to savers, with Santander increasing the rate on its instant-access savings account by 0.25%. Rachel Springall, finance expert at Moneyfacts, said while savers using certain accounts may have benefitted: "The major banks aren't really beating the base rate increase at the moment. They don't need the money, so they don't need to entice savers.”
Europe’s banking union lacks the key element of deposit insurance
Isabel Schnabel, a member of the German Council of Economic Experts, writes in the FT on her belief that Europe’s banking union lacks the key element of deposit insurance.
Bank of Cyprus sells bad loans
Apollo Global has agreed to acquire a €2.7bn non-performing loan portfolio from Bank of Cyprus. Apollo will pay €1.4bn for the non-performing loan portfolio - known as "Project Helix" - of mortgage lending to more than 14,000 companies.
ECI invests in grad training consultancy
ECI Partners has invested into MThree, a global technology consultancy that trains graduates for roles in financial services organisations and tech companies. The investment, believed to be around £45m, will allow MThree to increase overseas expansion and accelerate growth.
Credit Suisse to buy back $6bn of crisis-era debt
Credit Suisse said it will buy back $6bn of debt raised from the Qatar Investment Authority and Saudi Arabia's Olayan Group through coco bonds issued in 2012 and 2013.
Earnings up for Canadian rivals
Bank of Montreal says earnings per share, excluding one-off items, were up 16% to C$2.36 in the quarter ended July 31, exceeding the average analyst forecast of C$2.27. Meanwhile, Scotiabank reported a 5% increase in third-quarter earnings, rising to C$1.76 ($1.35) in the same period. This is up from C$1.68 a year ago.
China Construction Bank profit rises
China Construction Bank has reported 6% growth in first-half profit. China’s second-biggest lender by assets saw profit rise to 147.0 billion yuan in the six months ended June, from 138.3 billion yuan a year earlier.
Aston Martin to announce IPO
Aston Martin is set to announce its stock market flotation as it reveals its interim results today, reports Sky News. The car-maker’s IPO will involve the sale of approximately £1bn of shares, the reports suggest, adding that the firm is targeting a valuation of up to £5bn in a flotation that will see about a fifth of the company sold by existing investors.
Nissan begins electric car production
Nissan has begun producing its first electric car aimed at China, according to media reports. Working with a Chinese partner, Nissan is making a battery powered version of the popular Sylphy.
Investor snaps up Ryanair shares
US activist investor Harris Associates has bought a 3.1% stake in Ryanair, meaning it now holds £457m worth of stock and is in the airline’s top five shareholders. News of the move has seen Ryanair shares climb 2.6%.
Lump sum payouts putting pension schemes at risk
The Pensions Regulator has warned that "overly generous" lump sum payouts to people in retirement could be putting pension schemes at risk. It has urged the trustees of 14 defined benefit company schemes to review their cash sum offers amid concerns that savers are being lured into withdrawing their money when they would be better off staying put. The amount withdrawn from the traditionally generous company pension plans has risen from £7.9bn in 2016 to £20.8bn last year, according to figures from the Financial Conduct Authority.
Apollo to buy Aspen for $2.6bn
Private equity group Apollo is to buy Lloyd’s of London insurer and reinsurer Aspen in a $2.6bn deal. Chris O’Kane, who will stay on as Aspen’s chief executive, said: “Under the ownership of the Apollo Funds, Aspen will have additional scale and access to Apollo’s investment and strategic guidance, which will help us to accelerate our strategy and take Aspen to the next level.”
Wonga mis-selling victims could be left with nothing
Thousands of mis-selling victims seeking compensation from Wonga could be left with nothing if the payday lender enters administration. Wonga’s most recent accounts show that at the end of 2016 it owed £108.6m. If the figure has not improved since then, there is likely to be a long line of firms demanding repayment if it goes bust. Meanwhile, Labour MP Stella Creasy has warned that new lenders are exploiting the gap in the market left by the decline of Wonga.
Seedrs partners with US crowdfunding site
Seedrs has agreed a deal with US crowdfunding site Republic. The partnership means UK start-ups will be able to run joint crowdfunding campaigns in both countries, targeting investors on either side of the Atlantic. Republic, which is the sister company to individual investor site Angelist, said the relationship will also foster a closer relationship between start-ups in the US and investors in the UK and Europe.
GAM lays out plans to pay back investors in crisis-hit funds
GAM has said that it intends to make initial payments to investors worth up to 87% of assets held in crisis-hit funds it is liquidating in the wake of the suspension of one its portfolio managers.
LEISURE & HOSPITALITY
Gaucho to be rescued
Investec and boutique investment house SC Lowy are believed to have teamed up to acquire the Gaucho restaurant chain’s debt as a prelude to taking control of the business. They are understood to have agreed terms to acquire outright control of the chain of 16 restaurants.
Investors approve Countrywide fundraising
Investors in Countrywide have approved a £140m emergency fundraising. The UK's largest estate agency owner, owns 50 brands including Bairstow Eves and Hamptons International and employs 8,000 people. A £200m debt pile and difficult trading conditions have forced Countrywide to raise funds to stay afloat. Just 2% of votes were cast against the fundraising, in which Oaktree Capital will buy shares worth £24m.
Loan hit over Taylor Wimpey leasehold
Barclays has refused to offer mortgages at a flagship Taylor Wimpey development in the Queen Elizabeth Olympic Park in London because of fears over leaseholds. Barclays said it had refused to lend against a property as under the terms of the head lease it could be "disclaimed by the crown or by a liquidator or trustee in bankruptcy of the tenant". It added: "Barclays does not assess the solvency of the head tenants when we lend against an underlease, and we have no control or oversight over the head tenant's solvency throughout the term of our loan."
Yum China rejects $17bn buyout
Yum China has rejected a $17bn buyout offer from a consortium of private equity firms backed by KKR and Baring Private Equity Asia and led by Hillhouse Capital. The group offered to buy Yum China, which operates of KFC, Pizza Hut and Taco Bell restaurants in China, for $46 per share.
Pound could be dumped after no-deal Brexit
Bank of America Merrill Lynch has warned that central banks worldwide could dump their holdings of sterling if Britain crashes out of the EU without a deal. Analysts estimated that £100bn of selling by central banks would knock 1% off the value of pound. Kamal Sharma, a foreign exchange strategist, has forecast that the pound would rise back above $1.30 if a transition was delivered and to $1.40 if negotiations delivered a soft Brexit. "The most positive outcome remains no Brexit, at $1.50, which we think is unlikely," he said.