Libor time bomb warning for banks
Policymakers have warned that banks and finance firms in Britain are at risk if they do not switch away from the London Interbank Offered Rate (Libor) within the next three years. Minutes from a meeting of the Bank of England’s Financial Policy Committee show concerns about continuing use of Libor and the potential for problems when it is ended in 2021.
Banks’ profits boosted by loyal borrowers
The gap between banks’ best fixed-rate mortgage deals and the standard variable rates they charge long-standing borrowers have more than quadrupled, with the Financial Conduct Authority reporting that nearly 2m British homeowners are sitting on their lender's standard variable rate. David Hollingworth, of L&C Mortgages, remarked: “Borrowers who fail to keep their mortgage deal under review are burning money.”
Savers miss out as banks shun 'halfway house' notice accounts
Savers are being advised to consider notice accounts as an alternative to low-paying easy-access savers. Anna Bowes of savings comparison service Savings Champion said notice accounts represent a “halfway house” between easy-access accounts and inflexible fixed rate bonds.
Non mis-selling PPI compensation case leaves banks on the hook
People who were not mis-sold PPI policies may be able to claim billions of pounds more in compensation, following a court ruling in which Christopher and Joanne Doran were awarded all the sales commission they paid plus interest for a Paragon Personal Finance policy - a total of £17,345. Under the Financial Conduct Authority's existing guidelines, consumers who were sold their policies legitimately may still be entitled to claim back commission which is deemed excessive and lawyers have claimed the ruling is a new precedent that could mean that banks are liable for another £18bn in pay-outs.
SocGen drives expansion with German unit acquisition
Societe Generale has agreed to buy the equity markets and commodities business of Commerzbank as it increases its foothold in Germany.
Google's Waze and Allianz introduce in-app roadside assistance
Google-owned and developed traffic maps app Waze has partnered with insurer Allianz to roll out emergency roadside assistance in the UK from within the app. Waze revealed that 45% of its UK users are London-based.
Strong recovery for construction industry
The construction industry recovered last month, after Brexit-related uncertainty had caused some firms to delay construction projects. However, Samuel Tombs of economics consultancy Pantheon Macroeconomics noted that the outlook remained "bleak" for the year ahead, while Max Jones of Lloyds Bank said: "The sector is hardly motoring, with some large contractors blaming Brexit uncertainty for the delay or cancellation of projects."
Paragon buys house building lender
Challenger bank Paragon has bought development finance specialist Titlestone Property Finance from US private equity firm Oaktree in a £48m deal. It will also snap up £226m of development finance loans from special purpose vehicles controlled by Oaktree. Nigel Terrington, chief executive of Paragon, said the deal reflects its confidence in the “strong long term growth prospects” for the house building market. He added: “Access to finance remains a major barrier for the majority of SME house builders, as larger lenders continue to retrench from the market.”
London wealthtech startup reveals weighty backers
Exo Investing has revealed the close of a €16.5m (£14.6m) seed round last summer, backed by hefty supporters including Benjamin and Ariane de Rothschild, Madrid-based asset management firm ETS, and several former executives of La Compagnie Benjamin de Rothschild. The London-based wealthtech startup requires a minimum investment of £10,000 in order for its AI tech to leverage risk whilst allowing users' portfolios to scale.
Airwallex in $102m fundraising aimed at boosting UK presence
Airwallex, an international payments firm, has completed Series B fundraising of $102m as it plans to strengthen its UK presence. The firm’s VP of global banking and head of London operations James Butland commented: "The UK market is in Airwallex's sights as it expands. Although headquartered in London, Airwallex's technology has no geographical barriers and can be used globally to benefit businesses.”
Bought By Many raises £15m
Hedge fund manager Crispin Odey has re-invested in London insurtech marketplace Bought By Many, which has now closed a £15m series B investment round. The start-up has raised a total of £22.5m to date.
Dyal buys HPS stake
Credit firm HPS Investment Partners will free up cash to do more deals by selling a minority stake in its business to Dyal Capital Partners.
Novo Banco sued over bonds
Winterbrook Capital is to sue Novo Banco over bonds it says are in default, hiring US law firm Boies Schiller Flexner.
Cboe Europe, TP ICAP to open EU bases ahead of Brexit
Amsterdam has emerged as one of the biggest beneficiaries as London-based trading venues become more concerned about Britain crashing out of the EU next year.
Legal & General buys Woolwich site
Legal & General has acquired a major development opportunity located in Woolwich, London alongside the Crossrail line, with co-investors PGGM.
LEISURE AND HOSPITALITY
Barclays Scottish arm assists London hotel revamp
Sofitel London St James hotel has secured £45m in funding from Barclays' corporate banking team in Scotland, led by Paul Smith, corporate development director, and Yasmin Nabi, director, debt finance. Mr Smith remarked: "We have worked closely with Barclays' hospitality and leisure team in London to understand the subtle differences between the hotel markets in both capitals to create the right package, drawing on the company's strong market position."
Smurfit Kappa completes Dutch takeover
Paper and packaging company Smurfit Kappa has completed a €460m (£407m) takeover of Dutch paper and recycling business Reparenco - expected to lead to cost savings in excess of €30m.
MEDIA AND ENTERTAINMENT
CK Hutchison takes full ownership of Italian telco Wind Tre in €2.45bn deal
After Hong Kong conglomerate CK Hutchison agreed to buy a 50% stake, Italian telecommunications group Wind Tre’s bonds rallied sharply on Tuesday morning. The firm’s $2bn bond maturing in 2026 was trading at 78 cents on the dollar the previous day, but increased to 92 cents as the merger was announced yesterday.
Why WeWork does not deserve a $20bn price tag
The FT's Lex thinks that co-working space provider WeWork’s $20bn valuation "depends on a blinkered faith in its originality despite a crowded market of competitors."
Asos appoints Crozier chair
As Asos seeks to reassure investors that planned infrastructure investments will not damage profitability, former chief executive of ITV Adam Crozier has been appointed chair of the online fashion retailer.