BANKING
Credit Suisse risk chief to leave
Credit Suisse chief risk and compliance officer Lara Warner is leaving the bank as it deals with the fallout from billions of dollars of losses in the failures of US hedge fund Archegos Capital and UK supply chain finance firm Greensill Capital. Last week, the Zurich-headquartered lender revealed that it was expecting heavy losses in the wake of the meltdown of Archegos. It took a charge of $4.7bn as a result and now expects a first-quarter pre-tax loss of around $960.4m. Investment Bank CEO Brian Chin will also step down from his role with immediate effect, the bank said. Joachim Oechslin has been named interim chief risk officer and Thomas Grotzer interim global head of compliance. “The significant loss in our Prime Services business relating to the failure of a US-based hedge fund is unacceptable,” Credit Suisse CEO Thomas Gottstein said. “In combination with the recent issues around the supply chain finance funds, I recognize that these cases have caused significant concern amongst all our stakeholders. Together with the Board of Directors, we are fully committed to addressing these situations. Serious lessons will be learned.”
CMA criticises Danske Bank loan action
The Competition and Markets Authority (CMA) has reprimanded Danske Bank over its treatment of some small firms which had applied for Bounce Back loans, with 305 businesses which were trading through personal accounts required to open business accounts with the lender in order to access a loan. The regulator stated: "Danske Bank's actions have resulted in 305 SMEs opening business current accounts with it which they may not have wanted or needed in order to obtain finance during a critical time. Additionally, Danske Bank has been applying charges and fees to the business current accounts held by these impacted small businesses; this breach is likely to have inflicted financial harm on these customers." A Danske Bank spokesperson noted that "With hindsight we now accept that the correct course of action would have been to offer customers alternatives, including a fee-free business servicing account option.”
A third of homeowners took out insurance from their mortgage lender
Almost one in three homeowners took out an insurance policy through their mortgage provider when buying their property, according to Compare the Market. When asked about their reason for this, 29% of homeowners said it seemed the “easiest option” at the time. Whilst some shopped around, nearly a fifth said they were penalised or charged a fee for buying a policy that was not from the mortgage lender. Roughly 10% felt pressured into taking an insurance policy to secure the mortgage, and 14% felt forced by the lender to take out insurance with a specific provider. However, 15% of homeowners admitted to simply accepting the policy offered to them without shopping around for alternative options.
New state-backed loans will focus on growth
The latest pandemic recovery loans have been launched but experts believe 60% of applications from smaller businesses may be declined because banks will apply credit assessments that are similar to traditional loans. But with the emphasis moving from survival to funding growth, ThinCats managing director Ravi Anand said, "the recovery scheme is more flexible and supports wider lending activity, such as acquisitions and growth", for which "there is pent-up demand".
PRIVATE EQUITY
Chinese private equity targets record fundraisings
Chinese investment funds including Boyu Capital and Primavera Capital Group are targeting record fundraising this year following similar large-scale moves by regional and global funds focused more widely on Asia.
INTERNATIONAL
Italian and French banks revive ‘doom loop’ fears with bond buying
Financial Times calculations reveal that Italian and French banks’ exposure to their countries’ sovereign debt has reached record levels since the start of the coronavirus crisis.
AVIATION
UK aviation chiefs urge swift opening of travel corridor with US
The CEOs of British Airways, Virgin Atlantic and Heathrow airport have called for a travel corridor with the US to be opened as soon as next month, pointing to successful vaccination programmes on both sides of the Atlantic. Meanwhile, Boris Johnson has hinted that cheap fast-turnaround lateral flow devices could be used to test travellers instead of PCR tests, which cost around £200 a head and could make foreign holidays unaffordable for many.
French state to inject up to €4bn into Air France-KLM
The French government is to inject as much as €4bn to strengthen flag carrier Air France-KLM’s balance sheet, with Benjamin Smith, the airline’s chief executive, welcoming the “stability” this provides.
FINANCIAL SERVICES
Seedrs boss says innovation stifled by UK mergers watchdog
Jeff Lynn, co-founder of Seedrs has cautioned that the Competition and Markets Authority could obstruct UK government tech sector ambitions after the regulator blocked a merger with rival Crowdcube.
Fintechs look beyond survival after pandemic battering
The FT reports on how coronavirus forced Starling, Revolut and Monzo to cut costs and diversify income streams, even as many more people embrace digital operations in banking and elsewhere.
UK anti-fraud group increases pressure on Big Tech to fight scams
Stop Scams UK, supported by major lenders and telecoms groups including Vodafone and BT, is seeking to enlist the help of tech firms in fighting financial fraud in the country.
M&G chair announces resignation
M&G’s Chairman Mike Evans has resigned due to a stress-related illness. His departure follows a temporary leave of absence from the investment group in January.
HEALTHCARE
Oxford child jab trial halted over clot fears
A trial of the Oxford-AstraZeneca Covid vaccine on children has been halted while the UK's medicines regulator investigates a possible link with rare blood clots in adults. The move follows reports that the European Medicines Agency had found a link between the vaccine and the clots.
MANUFACTURING
Bikemaker Brompton warns of soaring costs for UK manufacturers
Foldable-bicycle manufacturer Brompton has cited material shortages and rising production costs as the firm comes under increasing pressure, forcing it to raise prices.
MEDIA & ENTERTAINMENT
Covid passports will harm cinema industry
The cinema sector has said the introduction of Covid vaccine passports would jeopardise its recovery, adding a layer of unnecessary bureaucracy when social distancing has already proven effective. Meanwhile, Boris Johnson is facing substantial kick-back against the idea of Covid-status certification with MPs on both sides labelling such measures discriminatory and “incompatible with freedom.”
Schüler to head merged Virgin Media and O2
Lutz Schüler has been appointed as CEO of the company formed by the £31bn merger of Virgin Media and O2. The merger of the Liberty Global and Telefónica-owned businesses is currently under review by regulators.
RETAIL
SoftBank invests $2.8bn in robotics group AutoStore
SoftBank has struck a $2.8bn deal for a 40% stake in Norwegian warehouse automation company AutoStore, in the latest addition to its web of investments in e-commerce and robotics. The Japanese company will acquire the stake from funds affiliated with AutoStore’s majority shareholder Thomas H. Lee (THL) Partners and other investors including EQT Private Equity, valuing the firm at $7.7bn. Founded in 1996, AutoStore has 20,000 robots deployed across 35 countries and counts Puma, Best Buy and Siemens among its customers. The company also touts a design method that allows customers to store four times the inventory in the same space in a warehouse.
Goldman Sachs bought £75m of Deliveroo shares to prop up IPO price
Goldman Sachs propped up Deliveroo shares to the tune of £75m after investors shunned its market debut, sources have told the FT. The bank is likely to have profited from its intervention, but would surrender that money to Deliveroo due to a previously undisclosed agreement between the companies.
ECONOMY
UK economy expected to outperform US and Europe next year
The UK’s economic growth will outpace that of the US and Europe next year due to the Treasury’s vast spending programme and the successful rollout of vaccines, according to the International Monetary Fund (IMF). In its World Economic Outlook, the IMF predicted UK growth of 5.3% in 2021 and 5.1% next year, after taking one of the biggest GDP hits from the pandemic. Global growth is expected to bounce back to 6% this year, followed by a 4.4% rise in GDP in 2022. This comes after a 3% contraction in 2020. Despite its vaccine struggles, the eurozone will still enjoy growth of 4.4% in 2021, the IMF predicts. However, the organisation did warn of “multispeed recoveries” with the developing world lagging behind and growing financial risks from booming markets and high-levels of business borrowing.