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Daily News Roundup: Wednesday 3rd July 2019

Posted: 3rd July 2019

BANKING

OakNorth still growing

UK SME-focused challenger bank OakNorth is on track to double its headcount after authoring a deal to provide credit analysis and monitoring technology to Dutch lender NIBC Bank. The London-based lender, which claims to be growing by around 15 people a week, has already increased its staff headcount from below 300 last year to 520 at present.

Investec founders set to move on

Investec has confirmed that co-founders Stephen Koseff and Bernard Kantor will be leaving the firm in August. Two new non-executives will join: Henrietta Baldock, a former Royal Bank of Scotland advisor and board director of L&G, and Philisiwe Sibiya, founder and chief executive of Shingai Group. Investec is splitting its asset management division from its banking business.

Crabb critical of closures

The Conservative MP Stephen Crabb has said that communities across Britain are being “deliberately starved” of cash due to the closures of High Street banks. He said: “There are communities right now up and down Britain being deliberately starved of cash and banking services as the banks, with the support of Government, are trying to create a near-cashless society.”

Denton named CEO of Scottish Building Society

Paul Denton has been named as chief executive of the Scottish Building Society. He was previously MD at Co-op Funeralcare Operations, and has 25-plus years’ experience in the banking sector, including as head of trading for retail banking at RBS/NatWest.

INTERNATIONAL

EU banks facing €135bn capital shortfall

The European Banking Authority has said that major banks in the EU would face a collective shortfall of €135bn to comply in full with global Basel III bank capital requirements by 2027. The banking watchdog said that would mean a “conservative” 24.4% increase in capital overall.

BBVA’s former operating chief named in corporate spying probe

Angel Cano, the former COO of BBVA, and seven other current and former bank executives have been named as persons of interest in an investigation into spying at the bank.

Credit Suisse wealth management head leaves after power struggle

The FT examines the departure of Iqbal Khan as Credit Suisse’s head of wealth management. According to sources, he had grown frustrated with his position under CEO Tidjane Thiam.

AVIATION

Ryanair traffic takes off

Ryanair has revealed that it carried 8% more passengers on its planes last month. The budget carrier said it served 13.6m passengers, up from 12.6m in the same period last year. It was spread across 78,000 flights.

Wizz Air grows passenger numbers

Wizz Air has posted a 19% increase in passenger numbers for June as a string of new routes continues to drive growth. The Hungarian airline said it expects robust demand over the summer, and has forecast net profit of between €320m (£286m) and €350m in 2020.

CONSTRUCTION

Construction output suffers steepest decline since 2009

The IHS Markit/CIPS UK Construction Purchasing Managers' Index (PMI) fell to 43.1, down from 48.6 in May, the worst measure of output since April 2009 and far below the 50 level that indicates no change from the previous month. Political instability and concerns over the economy are blamed for the fall in activity. The three areas of the construction sector - housebuilding, commercial and civil engineering - all reported sharp falls in activity.

FINANCIAL SERVICES

Cyber-incident reports from UK financial services soars

A Freedom of Information request to the FCA has revealed that there has been a sharp rise in the number of cyber-incidents reports by the UK’s financial services sector. The data revealed that the number of declared events rose from 69 in 2017 to 819 last year – a rise of more than 1,000%. Consumer banks accounted for nearly 60% of the reports submitted to the watchdog last year. The BBC contends that the spike is likely to have been driven by the introduction of the EU’s GDRP, which introduced an obligation on all organisations to report certain types of data breaches.

Libra needs close scrutiny

Christopher Woolard, the executive director of strategy and competition at the Financial Conduct Authority, has warned that Facebook’s plans for a global cryptocurrency, Libra, will warrant close scrutiny by governments across the world. Speaking at a conference in Cambridge, Mr Woolard highlighted a series of potential issues with Libra, from consumer protection and privacy concerns to financial market stability. He explained: “Its size and scale will pose serious questions for society and government more generally about what is acceptable and desirable in this space.”

Scottish financial services holding up

Law firm Burness Paull has said that Edinburgh is holding its own as one of Europe’s most influential financial services hubs despite the ongoing Brexit uncertainty. Burness Paull pointed to recent deal activity in the sector as evidence of major transactions “not being held up by political ambiguity”. The firm added that the fintech sector has seen a particular surge, among start-ups and more established businesses.

LEISURE AND HOSPITALITY

Bookies join forces to tackle problem gambling

Bet 365, Flutter, GVC, Sky Betting and Gaming and William Hill have signed a pledge to commit to them spending 1% of their UK gross gambling yield to promote safer betting. The firms said the commitment will raise around £60m a year from the five companies when it scales up by 2023.

MANUFACTURING

Factories across the world are under pressure

An editorial in the FT examines how the global manufacturing industry is faring, with tensions between the US and China over trade dragging down activity in factories across the world.

PROFESSIONAL SERVICES

Clifford Chance posts modest gains

Clifford Chance has posted modest gains for 2018-19, with revenue up 4.3% to £1.693m, partnership profit up 2% to £637m and profit per equity partner (Pep) inching up 1% to £1.62m.

REAL ESTATE

House price growth falls to four-month low

UK house price growth slowed to 0.5% year-on-year in June, according to Nationwide’s latest house price index, lower than May’s 0.6% growth and the worst since February’s 0.4% increase. The average price of a UK home rose from £214,946 to £216,515 between May and June, while prices in the capital fell 0.7% to an average of £465,722 and prices in the south east dropped 1.6% to £277,227.

RETAIL

Amazon to hire 2,000 more staff in UK

Amazon is planning to add 2,000 staff to its UK workforce of more than 29,500 with UK manager Doug Gurr declaring the UK “a fantastic hub for global talent." Chancellor Philip Hammond called the announcement "a clear vote of confidence in the British economy".

New bidder for Majestic Wine emerges

Majestic Wine is in advanced talks to sell its 200 stores to Fortress, owned by Japan’s tech giant SoftBank, in a deal worth £100m. Other potential buyers remain in contention, including Waterstone’s-owner Elliott and private equity firm OpCapita.

ECONOMY

UK ‘likely’ to enter recession in no-deal Brexit, Moody’s warns

Moody’s now believes the UK “would likely enter a recession” if it crashes out of the EU in a hardening of its view of the economic impact of a no-deal Brexit. Meanwhile, Mark Carney has warned that global trade tensions have led to a “sea change” in investors’ outlook for the world economy. The Governor of the Bank of England said that policymakers were underestimating the impact of President Trump’s trade spat with China, Mexico and the European Union.

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