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Daily News Roundup: Wednesday, 5th February 2020

Posted: 5th February 2020

BANKING

Metro Bank probed over sanctions breaches

Metro Bank has hired DLA Piper to conduct a major review of its compliance controls after handling money from Cuba and Iran in breach of strict US and EU sanctions. It is believed DLA Piper’s review is serious and at a fairly advanced stage, examining how Metro’s “Know Your Customer” rules had broken down, and whether there had been other breaches. Metro said it had kept the US Treasury’s sanctions policing unit informed since the Cuba failings in 2017. Meanwhile, an editorial in the Evening Standard considers whether modern banking is too complex for challenger banks, suggesting that in its rush to attract new customers Metro Bank looks to have cut corners.

Challenges await Rose

The Times’ Katherine Griffiths looks ahead to the challenges facing Alison Rose, the new chief executive of RBS, as she prepares to outline the bank’s future plans next week. Ms Griffiths says management changes are likely with Ms Rose keen to put in place a team who will swear loyalty to her. Permanent replacements are needed at NatWest Markets and a change is likely at the retail bank. Mark Bailie is also leaving his role as boss of Bó, RBS’s retail digital bank. Ms Griffiths adds that Ms Rose will take a knife to the business with more cost-cutting in the retail division expected, although her main focus is likely to be the investment bank. Ms Griffiths ends by saying that Ms Rose could hand out some cash. The bank is holding more capital that it needs to, with a core equity tier one ratio of 15.7%.

Hampden & Co bolsters team

Hampden & Co has bolstered its team with the appointment of Clare Ansell and Ian Gibson who join as banking directors from Handelsbanken. Mark Prentice, head of banking in Scotland, said the new hires signal how the bank's footprint is growing across the country.

INTERNATIONAL

Goldman Sachs partner barred from banking industry

The Federal Reserve has said it has permanently barred Andrea Vella, the Goldman Sachs partner who was put on leave over the 1MDB scandal, from the financial industry. Vella was formerly Goldman Sachs’ co-head of investment banking for Asia Pacific, and was put on leave after an indictment against former partner Tim Leissner identified Vella as a co-conspirator in November 2018. Leissner has pled guilty to the Department of Justice indictment.

European markets regulator takes another shot at ‘dark pools’

The European Securities and Markets Authority is boosting its campaign to limit share trading in so-called ‘dark pools’, concluding that new rules have only been partially successful.

Central banks are hesitant over digital currencies, says former French governor

Christian Noyer, the former governor of the Banque de France, has expressed doubt that central banks will launch digital currencies for consumers within the next decade.

AVIATION

AirAsia boss steps aside amid probe

Tony Fernandes has stepped aside as the chief executive of AirAsia while authorities probe bribery claims. He will stand down for least two months from the company he turned into Asia's biggest budget airline. AirAsia has been pulled into investigations which have seen European planemaker Airbus fined a record €3.6bn (£3bn).

CONSTRUCTION

Construction industry improving in 2020

The construction industry is seeing signs of improvement, following the Conservative Party’s decisive general election victory. The monthly IHS Markit/ CIPS Purchasing Managers’ Index (PMI) for January recorded a score of 48.4 - anything below 50 is seen as a sector in decline - but this was a boost from December’s score of 44.4. Tim Moore, economics associate director at IHS Markit, commented: “Measured overall, the latest dip in construction output was much shallower than in December, with survey respondents often commenting on improved willingness to spend among clients since the General Election.” He added that the best-performing part of the construction industry was the housebuilding sector, with output only falling slightly.

FINANCIAL SERVICES

City of London has not witnessed ‘Brexodus’

City of London Corporation boss Catherine McGuinness has said that the number of post-Brexit financial job relocations to the EU has so far been much lower than previously expected. The figure currently stands at between 2,000 and 7,000. Ms McGuinness said: “We really have not seen any major Brexodus,” adding, “We are not hearing signals of huge further moves.” Commenting on the upcoming UK-EU trade talks, Ms McGuinness urged Britain not to retaliate if the EU limited financial market access, and said that the UK financial sector is not calling for any major divergence from EU rules that may threaten equivalence-based access to the bloc, under which the EU offers access to non-EU countries with equally robust financial rules. She said: “The big potential competitor to London is New York. We will remain Europe’s only global financial centre into the future”.

FCA powerless to stop scam ads on Google

Andrew Bailey, the chief executive of the Financial Conduct Authority, has admitted that regulators are powerless to stop scammers from placing bogus investment adverts on Google to dupe the public. In a leaked email, Mr Bailey said that the FCA cannot block rogue firms from using the site to snare customers. Google has said it is working with the FCA and "other independent experts" on a long-term solution to ensure consumers are protected. An FCA spokesman said: "The FCA has no power to direct Google to stop advertising online scams and frauds nor does any other agency. This is why we strongly believe this should be covered in the online harms bill.”

Grab acquires retail wealth management startup

Grab has agreed a deal to acquire retail wealth management startup Bento as the app looks to expand its financial services offering. The Singapore-based firm said Bento will be rebranded as Grab Invest, and its products will be rolled out in its home market and across southeast Asia in the first half of the year.

UK regulator waters down new pension transparency measures

The FCA has watered down proposals for full fee disclosure on workplace pensions. Providers, trustees and IGCs will now only be required to disclose fees and charges initially on default options.

Just Group names new non-executive director

Just Group has announced the appointment of Michelle Cracknell as a non-executive director.

MANUFACTURING

Ferguson heading for clash with shareholders over US plans

Heating and plumbing group Ferguson is bracing itself for a clash with shareholders over its plans for a possible listing in the US that could result in the firm abandoning the FTSE 100. The company has proposed two options to shareholders. One would include scrapping its premium listing in London in favour of a primary listing in the US, which would make it ineligible for inclusion in the FTSE 100. In the second, Ferguson would keep both its main listing in London and FTSE membership but would seek an additional listing on the other side of the Atlantic.

MEDIA AND ENTERTAINMENT

Disney’s streaming push weighs on quarterly income

Disney has reported that its net income dropped by 23% from last year amid intense competition and its push into streaming services. Revenues at the company rose by 36%.

PROFESSIONAL SERVICES

Relx set to acquire US risk firm

Relx has agreed a deal to buy US startup Emailage for roughly $480m (£368m) as the publishing and analytics firm looks to boost its fraud prevention capabilities.

REAL ESTATE

Sales of £1m-plus homes jump in final half of 2019

Figures from HMRC show that sales of £1m-plus homes reached a 10-year high over the last six months of 2019, with a total of 5,300 transactions.

Hansteen sold to Blackstone

Hansteen has been sold to private equity group Blackstone for £500m, in a deal that saw the warehouse firm’s two founders net £14m each.

RETAIL

IKEA to close first big UK store

IKEA has announced that it will close down its city centre store in Coventry this summer. The Swedish furniture retailer said the store had made “consistent losses” since it opened in 2007, with fewer people visiting it than expected. It said it would be consulting the 352 workers affected and would try to find them jobs at other stores.

SPORT

Saracens face losing sponsor

Saracens are set to lose more than £2m a year in sponsorship, with Allianz set to end their nine-year association with the club. Saracens may also have to rename their stadium, which has been known as Allianz Park since it opened in 2013.

OTHER

FTSE boards falling short of ethnicity target

The Parker Review, which was launched in 2017, has found that 37% of FTSE 100 companies still have all-white boards despite a government-backed target to have at least one board director from an ethnic minority background by 2021. The Parker Review Committee found that 31 of the 83 firms which provided relevant information fell into this category. The report found that only 3.2% of all FTSE 100 board directors were UK citizens of colour, up from just 2% in 2017, while the current non-white population is 14% and is set to rise to 20% by 2030. The boardrooms of FTSE 250 companies were found to be even less diverse, with 69% of businesses (119 out of 173) having no ethnic diversity.

One in 14 people abandon wallets

A new survey by PayPal has found that one in 14 people say they no longer carry a wallet. A further 20% said that if they looked in their wallet it would not contain any cash. Stephen Jones, of UK Finance, said: “More customers are opting for the speed and convenience of paying contactless, or using mobile banking.”

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