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Daily News Roundup: Wednesday, 30th May 2018

Posted: 30th May 2018


RBS halts lending for environmentally damaging projects

RBS has said it will stop financing environmentally damaging energy and mining projects. The move comes as investors increase the pressure on lenders to do more to tackle climate change. RBS said that the new policy was part of its strategy to “become a simpler, safer bank”. Katie Kedward, project officer at campaign group Share Action said: “We consider RBS's energy sector policies to be now the most robust 'of the major banks' in the UK from a climate perspective, as they include a prohibition on new coal project financing globally and also include exclusion criteria for general corporate lending. Other banks, such as HSBC and Barclays, continue to have loopholes for certain developing nations.”

Labour warns against RBS sell-off

Labour has warned the Government against selling off more of its shares in RBS amid reports that ministers are prepared to accept another hefty loss. Labour said there is “no economic justification” for another sell-off at a time the shares are worth close to half what they were when they were bought. Meanwhile, Hamish McRae writes in the Independent that the Chancellor’s sell-off of RBS looks less bad when the revenue from the bank levy is accounted for.

UBS hires Lord Hill to advise on Brexit

UBS has hired Lord Hill, Britain’s former representative to the EU, to advise its clients on Brexit. UBS said its new hire would allow it to offer customers “richer advice in relation to Brexit and the wider political and economic environment”. The bank added: “His experience in both Brussels and the UK means he is able to speak with authority on the challenges and opportunities for business arising from recent political and economic developments in Europe.”

Lloyds branches out by launching café megastore

Katherine Griffiths in the Times highlights the launch of a new Halifax branch in central London where customers can relax with a coffee, children can learn to code, and consumers can gather information on safeguarding their personal information. Launching the banking “megastore”, Lloyds’ CEO António Horta-Osório said its aims were to boost the “brand presence” of Halifax, and to offer practical improvements to the branch experience. In a separate piece, Ms Griffiths says the new branch is a sign that imaginative banks are seizing the chance to restore their street cred.

Banks seek to entice new customers

The Mail reveals that high street banks have launched a range of new switching offers worth up to £200 in a bid to attract new customers. HSBC will pay newcomers who switch to its Advance account £150 if they set up at least two direct debits and pay in £1,750 a month. Meanwhile, NatWest will pay customers £100 to move to one of its current accounts if they switch online before June 15. Marks and Spencer Bank has also launched incentives, with customers getting a £125 gift card and additional monthly top-ups.

Monese plans to go global

The Times’ James Hurley profiles mobile-only bank Monese. Founder Norris Koppel says he believes his company is well placed to build a financial firm of global scale. He notes that while many of the new entrants are targeting millennials for growth, Monese is looking in another direction, at workers who may struggle to access banking services.

Branch closures criticised

Community leaders in Edinburgh have labelled the consultation process ahead of bank branch closures an “absolute disgrace”. Allister Mackillop, chairman of Currie Community Council, told MSPs that the process had been a “tick-box exercise”. He was speaking as Holyrood’s economic committee was taking evidence on the effect of branch closures on businesses and consumers in the wake of RBS’ decision to close 62 branches.

For richer or poorer: why bank M&A is back after 10 quiet years

Patrick Jenkins in the FT examines why M&A is back in the limelight after a quiet decade. He says defensive tactics and the need for IT investment are behind rising deal appetite.


KKR buys software group BMC for $8.3bn

KKR has confirmed that it will buy BMC Software from owners including Bain Capital and Golden Gate Capital for $8.3bn.


Financial markets hurt by Italian political crisis

Fears over Italy’s political upheaval have caused financial markets in Europe and on Wall Street to fall. The prospect of fresh elections in Italy and the possibility of the Eurosceptic parties strengthening their hold over the country has raised concern about the Eurozone’s stability. Meanwhile, John Authers writes in the FT that the vulnerability of the European banking system will at some point lead to the collapse of the euro.

Graduate applications flood Deutsche and other banks

Data compiled by the FT has revealed that about 110,000 students applied for Deutsche Bank’s graduate recruitment scheme this year. Morgan Stanley and Citigroup also saw significant increases in applications. Meanwhile, Deutsche Bank’s boss Christian Sewing has said the bank will have completed the “vast majority” of front-office job cuts by the end of June. He added Deutsche Bank had put in place a "hiring freeze" on units which are "above year-end expense targets".

Switzerland to vote on banking overhaul

The FT’s Ralph Atkins looks ahead to next month’s referendum in Switzerland which will determine how the Swiss banking system operates. Campaigners have promised the reforms will end boom-and-bust.


Chinese auto supplier in €772m takeover bid for German rival

Chinese auto supplier Ningbo Jifeng is in talks to buy out its partner Grammer in a possible deal that could value the German maker of vehicle seats at about €750m.


IAG launches travel tech start-up scheme

British Airways owner​ IAG has launched its third Hangar 51 accelerator programme for new tech start-ups to develop and test their products, with a focus on data analytics, robotic processes and smart contracting. The London-based programme will choose ten start-ups to receive personalised mentoring and access to industry contacts and experts, with the successful candidates receiving funding from its multimillion digital investment pot.

Rolls-Royce launches new engine design

Rolls-Royce has launched a new family of engines for business aviation and private planes. Dubbed Pearl, it marks the sixth new civil aerospace engine introduced by the engineering firm in the past 10 years.


Standard Life Aberdeen to return £1.75bn to shareholders

Standard Life Aberdeen has said it plans to return £1.75bn to shareholders after the sale of its UK and European insurance business to Phoenix Group. The firm has said it will return £1bn to shareholders by way of a B share scheme, involving the issue of new B shares to shareholders which the company will subsequently redeem for cash. A further £750m will be spent on buying back shares. Investors appeared unimpressed with the plan, as the company’s share price dropped 2.5% after the announcement.


Smiths Group confirms merger talks

Smiths Group has confirmed that it is in talks to merge its medical group with US-listed ICU Medical. Smiths is valued at around £7bn with its healthcare division worth a potential £2bn. A merger with ICU could create a combined company worth £6bn.


Sorrell prepares to launch new venture

Sir Martin Sorrell is set to take charge of Derriston Capital, a shell company, with the intention of turning it into a new advertising venture. Sky News has revealed that Derriston will acquire S4 Capital, an entity controlled by Sir Martin, and that he would put £40m of his own money into the venture. The development comes after Sir Martin left WPP in April.


Professional services ‘booming’, says CBI

Demand for accountancy, legal work and marketing is booming, with optimism among such companies improving at the fastest rate in more than a year, the CBI has said. The organisation’s quarterly survey shows that growth in volumes for business and professional services companies jumped in the three months to May, with a balance of 25% reporting a rise, the sharpest rate of growth since August 2015. The survey also reveals that profits in business and professional services grew at the fastest pace since August 2015 and are expected to be higher over the next three months.


Office provider rejects takeover bid

The world’s largest shared office space firm IWG has rejected an offer from Los Angeles-based property investor Prime Opportunities. It did not disclose how much the cash offer would have been worth but it is understood that the price was the main factor for IWG rejecting the deal. The US investor said it would consider making another offer. It comes after earlier this month IWG revealed it had received three approaches from private equity firms Lone Star and TDR Capital, and private investment company Starwood Capital.


Dixons Carphone to close stores

Dixons Carphone has announced it plans to close 92 of its more than 700 Carphone Warehouse stores this year as it warned of a sharp fall in profits. The retailer expects pre-tax profits for 2017-18 to be £382m, but it predicts profits will fall to £300m in 2018-19. The company blamed “challenges” in the market for mobile phones and mobile services, including a declining market for long-term mobile contracts and people not renewing their handsets as frequently. Total sales, meanwhile, were 3% higher in the year to April 16, while like-for-like sales rose by 4%.


London drops down earnings list

Earnings in London are now lower than in most other capitals, including Paris, Berlin and Madrid, according to a study by UBS. London ranked eighth most expensive city in the world in 2018, with Zurich and Geneva the priciest. Furthermore, a scale of gross earnings puts Londoners at 24th place in the world. Three years ago, when the investment bank last carried out the study, London was ranked sixth on prices and 13th on earnings.

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