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Daily News Roundup: Wednesday 7th March 2018

Posted: 7th March 2018


Hammond warns EU against blocking City as Tusk rejects May’s Brexit hopes

In a major speech today, Philip Hammond will warn the EU that refusing to include financial services in a Brexit deal would harm both the EU and the UK, sending prices for loans and finance up on both sides of the Channel. The Chancellor will say that: “It is time to address the sceptics who say a trade deal including financial services cannot be done because it has never been done before. To them I say, every trade deal the EU has ever done has been unique. The EU has never negotiated the same arrangement twice.” Stephen Jones, chief executive of UK Finance, commented: “Thousands of customers and businesses in Europe rely on access to financial services from the UK. It is in everyone's interests for this vital cross-border trade to continue.” Mr Hammond’s speech comes as Donald Tusk issues guidelines instructing EU negotiators that Britain will have to settle for an FTA which will have limited coverage of financial services. Meanwhile, French economy minister Bruno Le Maire is also due to reject calls for the financial services sector to be included in a free-trade agreement with Brussels.

Shake-up continues at Bank of Ireland

The shake-up of Bank of Ireland which has followed the appointment of new CEO Francesca McDonagh is set to continue. Michael Torpey, the chief executive of the corporate and treasury division, and Peter Morris, the chief executive of governance and regulatory officer, will both retire in the summer, while a third executive, Lewis Love, will also leave.


RBS to pay $500m over mis-selling

RBS has agreed to a $500m (£359.7m) settlement with New York State over the mis-selling of financial products in the lead up to the 2008 global financial crisis. RBS is the sixth bank to settle with the state over similar claims, linked to risky mortgages. The agreement will see the bank pay $400m in relief to homeowners, as well as $100m to the state.

FTT blow for Germany’s financial sector

Germany’s new coalition has reportedly agreed to introduce a tax on financial transactions. The Mail says that as part of a coalition deal, the ruling parties agreed at the weekend to introduce a substantial tax every time a share, bond or other asset is sold.

Bank Leumi beats expectations

Bank Leumi beat forecasts for fourth-quarter net profit and said it would start buying back some of its shares. Israel’s second-largest lender said it earned 854m shekels ($247m) in the quarter, up from 443m a year earlier. It had been forecast to earn 823.6m shekels.

Lebanese central bank grows dollar reserves

The Lebanese central bank's dollar reserves climbed by $1.4bn in the first two months of the year and its total assets in dollars exceeded $43bn, governor Riad Salameh announced on Tuesday.

India joins EBRD

India has been added to the growing list of members of the European Bank for Reconstruction and Development (EBRD). The country becomes the 69th shareholder of the EBRD.

Catholic nuns push Wells Fargo to identify ‘root causes’ of scandals

Wells Fargo has been persuaded by nuns to publish a report into what caused the scandals at the US bank after they raised concerns about its ethics with CEO Tim Sloan.


Automakers warn of Brexit threat

Carlos Tavares, chief executive of PSA which owns Vauxhall, Peugeot and Citroen, has warned that a lack of clarity over Brexit threatens the future of its Ellesmere Port operation. “We cannot invest in a world of uncertainty,” he said. Separately, Ford's European boss Steven Armstrong has called for the UK to remain in a customs union after Brexit, warning that any barriers to parts crossing borders would affect the firm.


O'Leary threatens to ground planes after Brexit

Ryanair's chief executive Michael O'Leary told an audience of airline leaders in Brussels that planes could be grounded from March 2019 if no agreement is reached in the Brexit negotiations by September but said perhaps this would be a good thing – an opportunity to show the British people they are “no longer going to have cheap holidays”, while restrictions on how they could travel might make them reconsider their decision to leave.


Builder cuts back on land purchasing due to leasehold rules

Retirement home builder McCarthy & Stone has cut back on land buying to mitigate against government plans to ban new leasehold homes in England. The firm, which announced it had bought 22 sites in the six months to February 28, down from 30 in the same period last year, says it is taking a “more measured approach to land buying”. The comments came alongside a trading update that showed revenues rose almost 1% to £240m in the six month period, while average sale prices climbed 14% to £296,000 and forward sales were up 16% on last year to £487m.

FCA quizzes investment groups over Carillion sales

The FCA is quizzing Standard Life Aberdeen and other investors over the timing of the sale of their stakes in Carillion. The Financial Reporting Council is also probing the collapse of the construction company.


Global investors say City top for talent

A new survey has revealed that the vast majority of investors believe London has the best talent pool for financial services in Europe. Of the 101 global institutions surveyed by the City of London Corporation, 90 said London tops the talent stakes. Meanwhile, a survey of more than 2,500 corporate decision makers across Europe showed London coming out well ahead of rivals such as Paris and Frankfurt on the issue of talent and being the “best city for business”. Institutional investors cite London as the best European city for business, with 58% opting for the City compared to Dublin, the nearest competitor, on 22%.

Growth bond savings rates cut by NS&I

National Savings and Investments (NS&I) is to cut the interest rate it pays to new savers on the three-year Growth Bond to 1.95%, from 2.2%. Its three-year Income Bond will pay 1.9%, down from 2.15%. NS&I said they had proved too popular since their launch in December.

Jupiter acknowledges pay gap

Jupiter Fund Management has acknowledged that it “must do better” after revealing that its female employees receive nearly 40% less than men.

Cambodia to develop national cryptocurrency

Cambodia is planning to develop its own national cryptocurrency named Entapay, after being inspired by the launch of the Venezuelan Petro in February.


Thomas Cook fund to support hotel plan

Thomas Cook is set to launch a £150m fund to finance the expansion of its own brand hotels, using other hotel assets as collateral to borrow money to help fund the rollout. The firm’s Ingo Burmester said the fund will enable the tour operator to acquire established properties in popular destinations and rebrand them. This, he noted, would take far less time than building a hotel from scratch. Separately, Eurazeo is selling its 4.2% stake in Accor, Europe’s largest hotelier by room numbers.

William Hill to sell Australian arm

William Hill is to sell its Australian arm to CrownBet. The deal values the division at A$300m (£168m) on an enterprise basis, which includes debt, and A$313.7m on an equity basis.


Block GKN takeover bid, MPs say

Melrose's proposed takeover of UK engineering giant GKN should be blocked, a group of 16 MPs has said in a letter to Business Secretary Greg Clark. Melrose Industries has offered £7.4bn for the 259 year-old firm, but the Pensions Regulator has warned that the move could affect the company's ability to fund its pension scheme.

Smurfit Kappa rejects hostile bid

Smurfit Kappa has rejected an €8.6bn takeover bid from International Paper, dismissing the American group's approach as “highly opportunistic” and saying that the offer “significantly undervalues” the packaging group.


IWG forecasts year of growth

Mark Dixon, CEO of office space provider IWG, has forecast a more positive year for business growth after challenges in 2017 and extra spending pushed the firm's profits down 14%. Revenue for the year increased 5.3% to £2.35bn as the company added 314 new locations, taking its global tally to 3,125 across 1,000 cities. IWG plans to spend an estimated £190m on 230 offices in 2018, it said, even as pre-tax profits dipped 14% to £149.4m in 2017.


HoF owner to sell its stake in business

Nanjing Xinjiekou Department Store, the Chinese owner of House of Fraser, plans to sell its 51% stake in the retailer, less than four years after buying the 169-year-old brand. In a filing to the Shanghai stock exchange, it said the majority holding is to be sold to tourism development group Chinese Wuji Wenhua. Sanpower Group, the largest shareholder in Nanjing Xinjiekou, bought House of Fraser in 2014 for £155m but faced difficulties in launching the department stores globally, as it originally planned.


BoE to consult more with public

Andy Haldane, the Bank of England’s chief economist, has revealed that the Bank plans to consult the public more in order to understand the economy better and give Britons more confidence in its decisions. Mr Haldane said trust in the central bank, along with other public institutions, weakened after the 2008-09 financial crisis, and maintaining public confidence was essential for it to be effective. “Our view of the economy, and our setting of economic policy, will be greatly enhanced by this wider panorama. It will give the Bank a new lens on the economy's hidden corners, a new set of often-quieter voices to listen to and learn from,” he said.

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