BANKING
UK businesses facing a new credit squeeze
Businesses taking out new loans are being hit with an average interest rate of 3.05% – up from 2.56% at the end of August - the highest in a decade. The hike in the cost of credit is said to be a result of banks becoming more wary ahead of Brexit. Businesses have increasingly been turning to the financial markets rather than banks to raise cash, with £6.5bn raised from issuing bonds last month, the most since October last year. The Bank of England's latest credit conditions survey warned businesses face the biggest crunch in lending since the financial crisis. Growth in consumer credit also slipped to 6% last month as the surge in household borrowing continues to unwind, the Bank of England data revealed. Total borrowing by individuals fell back to £4.6bn. Separately, borrowers spent £11bn on credit cards last month - 10.1% more than in September 2018, according to UK Finance.
Mortgage approvals up ahead of EU departure
The latest figures from the Bank of England have shown that mortgage approvals were up last month as buyers sought to complete purchases before October 31st. Some 65,919 mortgages for house purchases were approved in September, up from a three-month low of 65,681 in August. Andrews Property Group head of financial services Sam Harhat stated: “Mortgage numbers are a long way off their record highs but approvals are proving exceptionally resilient given the environment we are in”.
Tax burden mounts for UK banks
UK banks paid out almost £40bn in taxes last year with London’s total tax rate for typical corporate and investment banks higher than rivals New York and Frankfurt. The tax burden borne by the banking sector has risen by 50% over the past five years, according to a report out today from UK Finance. Stephen Jones, chief executive of UK Finance, called for "a rethink of bank taxation policies that prioritises our global competitiveness".
African bank follows Kaspi.kz in pulling IPO
The African Export-Import Bank has cancelled its London stock market float, citing “unfavourable market conditions”. With Dealogic data revealing a 58% fall in the number of UK listings in 2019 compared with last year, Afreximbank's decision follows that of Kaspi.kz, which was due to go public with a market value of $5bn (£4bn) but cancelled its plans earlier this month.
Savers find £7.4bn in forgotten savings
One in 10 savers has discovered money in forgotten bank accounts, according to research by Ford Money. Some 7% of survey respondents found money in an unused account, while 4% had funds in one that had been declared dormant by their provider. An average of £1,528 was found by savers in these lost accounts - the equivalent of £7.4bn if extended to the whole of the country.
NatWest restricts savers
NatWest savers will no longer be able to use their accounts to pay bills or transfer money. Savers can now only send cash to their own NatWest current accounts. The bank is also phasing out its savings account cards. A NatWest spokesman said: “We want to help our customers save more and are doing this by differentiating our savings accounts from our current accounts.”
Hampden& Co takes on Smith & Williamson's £35m loan book
Hampden & Co has inherited £35m worth of loans made to Smith & Williamson's clients after the firm decided to give up its banking licence. The deal will significantly bolster the private bank's lending book, which grew by 40% to £132.5m in the 12 months to December 2018.
Barclays’ corporate division sees H1 progress
Barclays Corporate Banking has hailed a "strong" 5% growth in its loan book and 15 new deals in the Scottish market. The bank said it has achieved double-digit income growth every year for the past decade.
Starling Bank issues euro debit card
Starling Bank has launched a business euro account and a dual-currency debit card in a direct challenge to fintech giant Revolut. Customers with Starling Bank debit cards will now have the option to spend directly in pounds or euros using a single card.
PRIVATE EQUITY
Inmarsat gets green light for £2.6bn private buyout
A consortium led by Apax Partners and Warburg Pincus has been given the go ahead to acquire British satellite giant Inmarsat.
INTERNATIONAL
UBS becomes first foreign IPO sponsor on China’s Star Market
UBS has become the first foreign bank to sponsor an IPO on China’s tech-focused Star Market, where underwriters are required to invest in the listings they bring to the market.
Russia's Sberbank to buy stake in internet group Mail.ru
Russia’s Sberbank has said it will buy a 35% stake in internet company Mail.ru from Gazprombank, with the terms of the deal undisclosed.Financial Times
AUTOMOTIVE
Automaker warns of $2.9bn blow from US factory strike
General Motors has slashed its 2019 profit forecast, with the 40-day strike at its US factories costing $3bn. Full-year adjusted earnings outlook is now between $4.50 and $4.80 a share.
Fiat Chrysler and Peugeot in merger talks
Fiat Chrysler Automobiles (FCA) and Peugeot-Vauxhall-owner PSA Group have been talking over a possible $50bn (£39bn) merger. The move would give FCA access to PSA’s electric vehicle work while PSA will gain more exposure to the US market through FCA.
AVIATION
WOW air may return as cargo carrier
Failed Icelandic airline WOW air could return as a cargo carrier, after ceasing trading earlier this year. After being rescued by American heiress Michele Ballarin, her spokesperson Gunnar Steinn Pálsson, said initial WOW air flights between Washington DC and Keflavik will carry freight, but noted that regular passenger services are part of its long-term plan.
CONSTRUCTION
Building holding back amid economic uncertainty
Building firms are holding off hiring new staff or even reducing the size of their workforce amid continuing political uncertainty, according to a survey from the Federation of Master Builders (FMB). The FMB's State of Trade Survey for Q3 found the number of small construction companies reporting a growing workforce had fallen, from 19% to 15%, while almost a quarter (23%) reported they had reduced their headcount – up from 21% on the same period last year.
FINANCIAL SERVICES
Slater & Gordon joins legal fight against Hargreaves Lansdown
Slater & Gordon is preparing legal action against Hargreaves Lansdown over its support for Neil Woodford. A statement on the Australian law firm’s website said: “Our group litigation team is investigating possible claims for investors who invested in Woodford funds through Hargreaves Lansdown. We’re concerned to establish if there was any actionable wrongdoing or conflict of interest by Hargreaves Lansdown in continuing to include Woodford funds on their ‘Best Buy’ Lists if it had concerns as to their underlying investments.” Nearly 300,000 savers used Hargreaves to push their cash into Woodford's flagship Equity Income Fund which is being shut down, with savers facing massive losses.
Blackmore Bonds delays dividend payment to thousands of investors again
Blackmore Bonds has warned investors of a second delay to dividend payments, blaming a delay in the sales of a block of flats with varying completion dates. A spokesman for the firm noted: "The slowdown in the property market has delayed the sale of some sites. This includes a multi-unit development which was due to complete in full in October but has now been deferred until a guaranteed date in November. Further sites will not be finalised until the end of 2019.”
Schroders offloads stake in UK investment boutique RWC
Schroders is selling its 41% stake in British investment boutique RWC Partners with the shares being bought back by RWC, its staff and US investment group Lincoln Peak Capital.
Alan Howard to step down as Brevan Howard CEO
Billionaire trader Alan Howard is handing day-to-day management of hedge fund firm Brevan Howard to risk chief Aron Landy so he can concentrate on investing and overseeing a widening group of businesses.
Robust consumer pushes Mastercard results past expectations
Mastercard saw purchase volume on its network rise by 14% in the third quarter, with revenue at $4.5bn and adjusted earnings at $2.15 a share, compared with projections of $2.01.
Libra threat has central banks eyeing faster payments
Claire Jones explains in the FT how the threat of Facebook’s Libra digital currency taking hold has spurred central bankers to improve cross border payment systems.
HEALTHCARE
Merck results lifted by strong sales of cancer drug
Merck beat third quarter expectations with net income of $1.9bn and revenue of $12.4bn, helped by growing sales of cancer drug Keytruda and a cervical cancer virus vaccine.
Pfizer results boosted by innovative drugs and EM growth
Third quarter net income at Pfizer was $7.7bn and revenue $12.7bn, as strong medicines sales and emerging markets growth helping the firm spin off its generics and consumer healthcare operations.
MEDIA & ENTERTAINMENT
Bytedance may list in Hong Kong
Chinese firm Bytedance, which owns the hugely popular video app Tiktok, is reportedly considering an IPO in Hong Kong as soon as 2020.
REAL ESTATE
Average home up £800 on last year, Nationwide says
Figures from the Nationwide show that the price of the average home increased by £800 in the last 12 months. Robert Gardner, the firm’s chief economist, said the turbulent political backdrop had not affected house prices unduly, with the number of people in work in the UK offsetting Brexit-related uncertainty.
RETAIL
M&S to offer buy now, pay later option
Marks & Spencer is preparing to offer a “buy now, pay later” option on its website next month as it seeks to attract younger shoppers and increase trade heading into Christmas. The company has teamed up with Clearpay to offer customers the option of paying for orders of more than £30 in interest-free instalments.
ECONOMY
Employers' confidence dips
Data from the Recruitment & Employment Confederation (REC) show employers' confidence in the UK economy dropped to -31 in October (0 is a neutral reading) - its lowest level since mid-2016 - as firms scale back hiring plans because of Brexit. Neil Carberry of the REC said: “These figures show the damage that political indecision is causing.”
OTHER
Brexit coins to be melted down
The Treasury has confirmed that hundreds of thousands of coins minted with the planned 31 October Brexit date will now be melted down after the Prime Minister accepted an extension from the EU.