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Daily News Roundup: Wednesday, 3rd April 201

Posted: 3rd April 2019

BANKING

MPs set to launch RBS cash pot probe

MPs are said to be preparing to launch an investigation into the way smaller lenders were awarded a share of the £775m RBS Remedies fund earlier this year. Metro Bank was awarded the largest portion of the cash, which was set aside by RBS in exchange for its bailout during the financial crisis and its failure to spin off its subsidiary Williams & Glyn. Other companies to be awarded cash under the RBS scheme included digital bank Starling, clearing bank ClearBank and start-up Tide. More established players TSB, Co-op Bank and CYBG missed out on the awards. According to the FT, the Treasury select committee is considering a probe into how decisions were made over which companies would be handed cash under the scheme and what promises those companies made in their proposals.

Banks ready to extend disputes scheme

The banking industry has agreed to look at extending the scope of a new redress scheme for business owners to cover complaints dating back two decades. Britain’s biggest banks are working with representatives of small businesses on the dispute resolution service, a new voluntary, industry-funded ombudsman scheme for companies not covered by newly expanded access to the Financial Ombudsman Service. In addition, a new scheme will allow the owners of small companies to ask for past grievances against banks to be examined where their complaint has not been assessed by a previous compensation scheme. UK Finance said that the steering group setting up the schemes would “consider the basis on which the start date might be extended back to January 1, 2000”.

UKar sells Northern Rock loans

UK Asset Resolution (UKar), which took on the closed mortgage books of Northern Rock and Bradford and Bingley after the financial crash, has sold £4.9bn of former Northern Rock loans to Citi. The latest sale reduces Ukar’s balance sheet to £8bn, a reduction of 90% since its formation.

PRIVATE EQUITY

Fintech Opengamma secures $10m funding

Derivative analytics platform Opengamma has secured $10m (£7.6m) in funding led by Dawn Capital. The funding will allow the fintech group to expand its teams in London, New York and Singapore and launch new products in the collateral and treasury sector.

Timely warnings about private equity debt levels

The FT’s leader suggests that Bain Capital co-managing partner Jonathan Lavine was right to signal his concern about private equity groups’ appetite for debt this week.

INTERNATIONAL

IMF warns of unsettled outlook

IMF had Christine Lagarde has warned that most countries around the world can expect slower growth in 2019 as the global economy loses momentum. She told an audience in Washington that rising trade tensions, concerns over Brexit and tougher financial conditions as central banks raise interest rates had "increasingly unsettled" the world economy over recent months.

Indian court quashes corporate default rules

India's supreme court has struck down a directive from the Reserve Bank of India ordering banks to declare a default on the first day of delayed loan repayments from corporate clients.

Bitcoin surges to more than $5,000

Bitcoin broke through the $5,000 mark yesterday for the first time since November, amid speculation that a buyer in Asia had made a bumper order.

AVIATION

Ryanair traffic continues to soar

Ryanair’s traffic grew 9% year-on-year last month, as passenger numbers hit 10.9m. The airline’s rolling annual total is 132.1m - up from 130.3m in the year to March 2018.

CONSTRUCTION

Brexit puts the brakes on UK construction

The UK construction sector contracted again in March, according to IHS Markit and the Chartered Institute of Purchasing and Supply (CIPS) construction purchasing managers’ index, which stood at 49.7 for the month - down from 49.5 in February and the first consecutive fall in output since August 2016. Notably, commercial construction was the worst performing area - with widespread reports of the continuing Brexit uncertainty leading to lower client demand.

L&Q to spend £4bn building homes in Northwest England

Housing association L&Q is focusing on Northwest England after slow progress in the Southeast, with plans to acquire Trafford Housing Trust and build 20,000 new homes.

FINANCIAL SERVICES

FCA warns over high-risk Isas as LC&F probe looms

The Financial Conduct Authority has warned consumers against investing in “high-risk” peer-to-peer lending through innovative finance ISAs (IFISAS). “These types of investments may not be protected by the Financial Services Compensation Scheme so customers may lose money invested or find it hard to get back,” the watchdog said. The warning came after savings firm London Capital & Finance collapsed in January, owing £237m to 11,500 investors. The FCA is appointing an independent reviewer to investigate regulatory failings exposed by the collapse of the company, but has rejected suggestions it has been forced to do so. FCA chairman Charles Randell said the regulator chose to investigate itself after LC&F’s collapse because of “the broader public interest questions which arise in relation to the issue and sale of mini-bonds by unregulated firms”. However, former City minister Lord Myners has warned the investigation has “all the smell of an institutional cover up”, citing concerns about its independence.

Provident challenges legality of Non-Standard's finance

Amid a hostile takeover bid with suitor Non-Standard Finance, doorstep lender Provident Financial has challenged the legality of historic shareholder payouts made by its rival. Provident suggested that NSF may have broken company law when it made a wealth of dividends and share buybacks between 2016 and 2018. Analysts said that the allegations, if true, might require NSF shareholders to repay the money.

Payday lender's borrowers to miss out on compensation

Hundreds of thousands of people who were mis-sold payday loans will receive a fraction of the compensation they are entitled to after a lender collapsed. WageDay Advance had given loans to about 800,000 people but went into administration earlier this year. In a case that mirrors the demise of Wonga, the company folded after being hit by a wave of compensation claims for mis-sold loans.

BlackRock shakes up management as fee pressure grows

BlackRock is overhauling its management ranks, promoting new executives and making changes to its “alternatives” business as the asset management industry comes under increasing pressure.

MEDIA AND ENTERTAINMENT

UK gaming market worth £5.7bn

The UK gaming market is now worth a record £5.7bn - in part thanks to titles like PlayerUnknown's Battlegrounds and Fortnite. The two online-only games, released in 2018, helped push revenues for gaming software to a record £2bn - according to Ukie, the trade body for UK gaming.

Music revenues grow at fastest rate for two decades

Global music revenues grew at the fastest rate in more than two decades last year, as the streaming revolution continues to gather pace. Worldwide recorded music revenues surged 9.7% to $19.1bn (£14.6bn) in 2018, the fastest rate of growth since at least 1997.

RETAIL

Superdry chiefs resign after founder secures return

Superdry executives, including the chairman and chief executive, have resigned after founder Julian Dunkerton won his bid to be reinstated to the board. In a narrow victory on Tuesday, Mr Dunkerton won the support of 51.15% of shareholders who voted. After an emergency board meeting eight directors resigned en masse. Mr Dunkerton, who left the chain a year ago, has been appointed interim chief executive.

ECONOMY

M&A dips despite more tech deals

The value of UK M&A has fallen this quarter as Brexit uncertainty lingers, although tech deals have grown to the highest year-to-date level in at least 18 years. Data from Mergermarket shows a total of £27.4bn has been spent on UK assets so far this year, representing a 1.9% decrease compared to the fourth quarter of 2018. However, technology sector deals have increased, accounting for 16% of deals in the UK so far.

UK inflation highest of G7 countries, OECD says

Britain's annual inflation rate was the highest of the G7 countries in February, according to data from the Organisation for Economic Co-operation and Development (OECD), due partly to the fall in the value of the pound pushing up the cost of imported goods. The UK inflation rate hit 1.8% in February, compared to the Eurozone's 1.5%.

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