BANKING
Santander to cut jobs
The Times reports that Santander is to cut about 200 British jobs, largely in its corporate and commercial banking operation. The lender is also aiming to cut about 1,150 branches and 3,700 jobs in Spain as it grapples with a tough business environment for European lenders. The bank is restructuring to focus on cost savings in Europe while pursuing bigger profits in Latin America.
HSBC to hire Morgan Stanley
HSBC has revealed it plans to hire Morgan Stanley as joint corporate brokers to replace Goldman Sachs. However, it still remains unclear whether HSBC will keep Credit Suisse as its other corporate broker following a review by CFO Ewen Stevenson. Despite losing HSBC as a client, Goldman Sachs would remain sixth among stockbrokers in the FTSE 100 with 14 clients, according to the latest Adviser Rankings data for the second quarter. JP Morgan Cazenove regained top spot in the three months to the end of May from Bank of America Merrill Lynch.
Interest rates on notice accounts reach 7-year high
Analysis by Moneyfacts has found that interest rates on notice accounts have reached a seven-year high. The research found the current top five notice accounts now pay 1.88% on average. The top performing notice account is offered by Secure Trust Bank. It pays out 1.91% and has a 90-day notice period.
Revolut hit with complaints
The Financial Ombudsman Service has revealed that Revolut has received the most complaints of all small digital banks in the past three years. The FOS dealt with 171 cases against Revolut between 2015 and 2018. During the same time period Monzo received 82 complaints and Starling Bank 51.
Double-digit growth for Hampden & Co
Hampden & Co has revealed that lending was up 40% to £132.5m in 2018, with deposits up 38% to £267.5m and total income up 63% to £6.4m. Chief executive Graeme Hartop said: “This growth demonstrates the demand for our truly personalised private banking service. And we added to it in February 2019 our digital banking service and mobile app.”
INTERNATIONAL
Bundesbank fears heavy losses if major country leaves euro
The German Bundesbank has warned that it could face heavy losses if a major country decided to leave the euro and then defaulted on its debts to the European Central Bank system. The analysis comes days after the insurgent Lega-Five Star government in Italy passed a decree authorising the creation of a parallel payments system known as "minibots", a scheme decried by critics as a threat to the integrity of the euro and potentially a "lira-in-waiting".
Singapore sovereign wealth fund builds stake in Julius Baer
Singapore’s sovereign wealth fund, GIC, has built a 3% stake in Julius Baer. Shares in the Swiss private bank rose on the back of the news.
Chinese brokerage Huatai to launch $500m London share sale
Huatai, the Chinese brokerage firm, has confirmed that it plans to sell $500m in global depositary receipts on the London Stock Exchange.
AUTOMOTIVE
Uber expects hit from transfer pricing probe
Uber’s accounts from 2014 to 2018 are being examined by HMRC for the use of transfer pricing. The taxman is also looking at allegations Uber owes more than £1bn in VAT. Audits are also being conducted by several states in America and by tax authorities in Australia, the Netherlands, Brazil, Australia, Mexico, Singapore and India.
CONSTRUCTION
Construction sector slumps in May
Building activity in the UK dropped in May the third time in four months, according to IHS Markit's latest survey, resulting in the headcount in the sector to fall at its fastest rate in six-and-a-half years. Duncan Brock at the Chartered Institute of Procurement & Supply, which helps to compile the survey, said: “With the continuing uncertainty around Brexit and instabilities in the UK economy, client indecision affected new orders which fell at their fastest since March 2018 and particularly affected commercial activity.”
FINANCIAL SERVICES
Council fires back at Woodford over suspension
Kent County Council has criticised fund manager Neil Woodford after his flagship Woodford Equity Income Fund suspended all withdrawals on Monday, just hours after the council requested the withdrawal of its pension fund’s investment of £263m. A spokesman for the council said it was “disappointed that, as a major investor in the fund, we did not receive this prior notification.” Meanwhile, the suspension rippled through the stock market yesterday, with declines in a several big stocks held in the fund. The selling was triggered by fears that Mr Woodford would be forced to sell some of its more liquid assets. Hargreaves Lansdown, the investment platform that has championed Woodford, closed down 102p, or 4.6%, at £21.26, amid concerns about its exposure.
Regulator calls time on Provident merger
The Prudential Regulation Authority has blocked Non-Standard Finance’s £1.1bn hostile takeover for Provident Financial. The financial regulator said NSF’s bid would not meet minimum regulatory capital levels. The stumbling block was that only 54% of investors in Provident had decided to back the deal by today, the deadline that NSF had set for declaring its bid wholly unconditional. Commenting on the bid, Alex Brummer in the Mail says that never has so much money been wasted on advisory fees for a transaction involving the most vulnerable borrowers in Britain.
FCA clamps down on peer-to-peer investment
People looking to invest into peer-to-peer platforms will no longer be able to put more than 10% of their investable assets into the loans unless they had received regulated financial advice. The new rules announced by the Financial Conduct Authority yesterday also require companies to give better information to customers and test their knowledge and experience of investment if they had not received any advice.
Legal & General fund arm replaces CIO
Legal & General has announced that Anton Eser will step down as CIO of its asset management unit. He will be replaced by deputy CIO Sonja Laud.
MANUFACTURING
Greybull to bid for British Steel assets
Greybull Capital, which owned British Steel until it collapsed last month, is reportedly planning to bid for the firm’s operations in France and the Netherlands. The private equity firm is keen to merge the European operations with a French steelmaker it bought last month, Ascoval. Such a move would create a new steel business on the continent from British Steel’s remnants.
De La Rue wins contract
The Bank of England has awarded British note printer De La Rue an eight-year contract to provide polymer sheets for the new plastic £50 notes, and for future £5 and £10 notes. It will share the contract with Australian firm CCL Secure.
MEDIA AND ENTERTAINMENT
Airtel Africa plans float
Mobile operator Airtel Africa is to float a quarter of its shares on London's stock market. The Africa-based company will also issue new shares to raise about £590m, at a price to be confirmed. Investors in the firm include Softbank and Warburg Pincus.
REAL ESTATE
Lendinvest mulling IPO as profits balloon
Property finance lender Lendinvest, which provides loans and short-term mortgages with cash from institutional investors, has posted its fifth consecutive year of profits, which were up 82% to £4m. Revenues climbed 36% and chief executive Christian Faes said the firm was weighing a range of options - including raising funds through an initial public offering.
Aberdeen agrees Japanese joint venture
Aberdeen Standard Investments has formed a joint venture with Sumitomo Mitsui Trust Bank that will target the Japanese residential property market. The new venture, which will also invest in other mature markets across Asia Pacific, will target investments in residential assets such as multi-family, senior housing, student accommodation and corporate housing.
RETAIL
Sir Philip Green agrees £25m deal with UK pensions regulator
Sir Philip Green has won the backing of the Pension Protection Fund for the restructuring of his retail empire after agreeing to put an extra £25m in security over property and assets to Arcadia’s pension scheme. The announcement means that the total sum pledged to the retirement fund over the next three years will now increase from £360m to £385m. The PPF is now likely to vote in favour of a company voluntary agreement at a crunch creditor meeting today, leaving the fate of Arcadia in the hands of landlords, almost 200 of whom have been asked to accept big rent cuts.
ECONOMY
World Bank predicts growth will fall to 10-year low
The World Bank has forecast the weakest growth for global trade since the 2009 financial crisis, citing threats from the US-China trade conflict, high government debt and sharp slowdowns in major economies. The Washington-based lender downgraded its forecast for global growth in 2019 by 0.3 percentage points, to 2.6%.
Jay Powell says Fed is ready to act if trade wars hit economy
Jay Powell, the chairman of the Federal Reserve, has said the US central bank will be closely monitoring any fallout from trade wars on the US economy. He suggested the bank was prepared to cut rates if needed.
OTHER
Operational resilience should be treated as commercial imperative
A new report from The City UK has suggested that financial services firms need to treat operational resilience as a “commercial imperative”. The report said the positive impacts of doing so include more sustainable performance, leadership in the global context and boosting the reputation of the UK as an investment destination. The City UK chief executive Miles Celic said: “Operational resilience is not a choice, it is a commercial imperative... Firms that maintain safety and efficiency through a crisis will have a clear commercial advantage and be more sustainable over the long term. Those who don't, might not last very long.”