BANKING
Hiring for bankers hits three-year high
Recruitment for bankers has hit a three-year high, according to research by Morgan McKinley and Vacancysoft. The analysis shows that Britain’s top banks posted 1,163 professional banking vacancies last month, with this a 43.9% increase on the same period last year. The report also reveals that overall vacancies in the sector rose 19.4% year-on-year, their highest point since July 2019. Hakan Enver, managing director of Morgan McKinley, said the “bullish figures show there’s fight left in UK financial services yet”, adding that banks are continuing to bolster their ranks “despite warnings of a mass exodus of talent”. He added that while it is “unavoidable” that the banking industry will face challenges because of Brexit, recruiters in financial services are finding this “an unexpectedly busy period.” Analysis shows that a number of banks experienced year-on-year declines in recruitment, including Lloyds Bank (-65%), Barclays (-43%) and NatWest (-33.1%), while increases were seen at JPMorgan (+51%) and Citi (+85.7%).
Regulators query fire sale of assets
UK and US regulators are reportedly looking into whether investment banks breached rules by holding group discussions before launching a fire sale of nearly $20bn worth of assets belonging to hedge fund Archegos Capital Management. The US Securities Exchange Commission is said to have requested further information about a meeting with Archegos founder Bill Hwang from Goldman Sachs, Wells Fargo and Morgan Stanley - as well as Japan’s Nomura and Swiss lender Credit Suisse. The Financial Conduct Authority is also believed to have contacted the lenders’ UK operations over the matter, while Finra, Wall Street’s self-regulatory body, has also contacted the banks.
Record first-quarter fees for City banks
Investment banks raked in record revenues in the first quarter of the year, according to data from Dealogic. British investment banking fees from floats in Q1 hit £133m, far exceeding the £90m first quarter record seen in 2015. Net revenues from mergers and acquisitions and equity raising also hit record highs for Q1, with banks earning £487m and £215m respectively.
Cash Isa savers see worst tax year on record
Cash Isa savers have seen the worst tax year on record with returns averaging just 0.63% over the last 12 months. Inflation since April 2020 has averaged 0.78%, outstripping the typical Isa rate. Research from Moneyfacts shows that investors fared better, with an average return of 13.5% from stocks and shares Isas. This compares to a 13.3% loss investors suffered during the previous tax year. Despite payouts on cash falling as the Bank of England cut rates amid the pandemic, savers have deposited more money into cash Isas than ever before, with balances peaking at £302bn in May 2020.
INTERNATIONAL
Credit Suisse faces investor backlash
Credit Suisse is facing an investor backlash, with shareholder advisory group Ethos recommending investors vote against the board and its executive pay plan after the bank said it would take a £2bn to £3bn hit due to the Archegos crisis. Ethos Foundation chief executive Vincent Kaufmann said there has been “an incredible number of governance failures” during Credit Suisse chair Urs Rohner’s tenure.
Wells Fargo plans September office return
Wells Fargo plans to start bringing workers back to its offices after Labor Day in the US, with a memo circulated to staff flagging September 6 as the day it hopes operations will return to normal thanks to the increasing availability of vaccines. About 200,000 employees of the bank have been working from home amid the pandemic. Goldman Sachs CEO David Solomon recently told the bank's employees that he hoped to have them working in offices again by this summer.
AUTOMOTIVE
BMW CEO notes EV focus
BMW CEO Oliver Zipse has said the company’s stock could compete with Tesla thanks to its recent focus on electric vehicles. The firm has signed a $335m contract with lithium provider Livent, under which the carmaker will gain a key ingredient in battery cells for its new range.
City AM
FINANCIAL SERVICES
Financial services pact sets up meetings between regulators
A post-Brexit financial services agreement will reportedly see UK and EU regulators meet twice a year but will not implement any new access arrangements. With officials having discussed a financial services Memorandum of Understanding over the past three months, a leaked copy of the yet to be released pact says both sides will “jointly endeavour to pursue a robust and ambitious bilateral regulatory cooperation” by meeting twice a year. It adds: “Forum activities may include dialog on the participants’ autonomous decisions to adopt, suspend or withdraw equivalence relevant to one or the other side”. The new Memorandum of Understanding reportedly does not include any bilateral mechanism to grant equivalence, with this set to remain entirely in the remit of the EU.
City AM
Asset manager’s tough stance on CEO pay
With annual meeting season approaching, Legal and General Investment Management, the UK’s largest asset manager, says it will vote against companies that fail to rein in CEO pay following the coronavirus crisis. The firm said it opposed the election of more than 4,700 company directors last year as it voiced concerns about their corporate governance. It conducted 21% more engagements with companies compared with 2019, opposing 128 new remuneration policies proposed by companies, or 37.5%.
PayPal in crypto announcement
PayPal has announced that it is to offer an option allowing customers to use cryptocurrency assets to pay online, with the ability to convert bitcoin, ether, bitcoin cash and litecoin into fiat currencies at checkouts. PayPal president and CEO, Dan Schulman, remarked: “This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet.” He went on: “We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants.”
Numis revenue up 75%
Broker Numis has revealed that revenue for the first half of the year is expected at around £110m, representing an increase of 75% on the year earlier period. The firm said the “positive equity market backdrop” has supported an increase in IPO and M&A activity which has “more than offset the tapering of fundraising activity for corporate clients”.
PensionBee confirms LSE float plans
Fintech firm PensionBee is to list on the High Growth segment of the London Stock Exchange. The company currently has some 130,000 active customers and £1.5bn assets under management.
City policy chair says most workers will return to offices
City of London policy chair Catherine McGuinness says the financial centre is likely to see most workers return to their offices after the pandemic, although there are likely to be changes to the way people work. She told the BBC: “What people are telling us is that they are expecting their central office base to remain at the core of their business with people coming in three or four days, working different hours, so we are expecting the bulk of the return … What it will mean in terms of the overall footfall, we are not yet quite clear.”
HEALTHCARE
Biotech company in London float announcement
Biotech firm Oxford Nanopore is to float in London, with a stock market value of some £2.3bn placed on the group which provides gene sequencing services for labs and research institutes.
LEISURE AND HOSPITALITY
Deliveroo sets listing price at bottom of initial range
Deliveroo has set the final price for its IPO at £3.90 a share, the bottom of its initial range and valuing the food delivery company at £1.3bn less than the top end of its original expectations. The firm put the decision down to deteriorating stock market conditions and a desire to avoid a situation where the shares fall after the IPO.
Wetherspoons announces investment programme
Pub chain JD Wetherspoon is to create some 20,000 jobs over the next 10 years, with an initial pipeline of 75 projects lined up. The company estimates investing an initial £145m on expansion work.
MEDIA & ENTERTAINMENT
Epic Games hits out at Apple
Epic Games, the maker of popular video game Fortnite, has accused Apple of anti-competitive behaviour. While the Competition and Markets Authority continues an investigation into Apple, Epic Games founder and chief executive Tim Sweeney accused the tech giant of “kneecapping the competition and exerting its monopoly power”.
RETAIL
Grocery sales fell in March
New figures show that grocery sales fell 3% in the four weeks to March 21 compared with the year earlier period. This marks a decline on the 15% year-on-year increase recorded a year ago which had been driven by panic buying ahead of the UK’s first national lockdown. The data shows that shoppers made 117m fewer trips to the supermarket this month compared with March 2020. Online sales were 89% higher than a year ago, although the grocery share of the market slipped to 14.5% from a record 15.4% seen in February.
ECONOMY
IMF head: Growth prospects rising but dangers remain
Kristalina Georgieva, managing director of the International Monetary Fund (IMF), says that while prospects for global growth have improved since January, uneven progress in fighting the coronavirus pandemic could jeopardise the economic gains. Noting that the IMF’s updated economic forecast will next week show the global economy growing at a faster pace than the 5.5% gain projected at the start of the year, she said this has been driven by a $1.9trn US rescue package and rising confidence from increased vaccinations in many advanced economies. However, Ms Georgieva warned that economic prospects are "diverging dangerously" and called on major central banks to “carefully communicate their policy plans to prevent excess financial volatility at home and abroad."
OTHER
Vaccine a shot in the arm for business confidence
The latest Lloyds Business Barometer shows that the vaccine rollout has helped drive business confidence to its highest point in a year. The analysis shows that overall business confidence has increased 13 percentage points to 15% in the last month, the highest level since March 2020. Firms’ trading prospects for 2021 have jumped 10 points to 12%, with 34% of firms anticipating a pick-up in activity. On the outlook for hiring, over a quarter of companies anticipate expanding their workforce while 22% expect reductions. Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It’s been a year since the first lockdown and the surge in confidence this month tells us firms are increasingly confident about economic recovery.” He added: “The broadly positive outlook is driven by steady vaccine deployment, the roadmap out of lockdown and the extension of government support measures.”