Lloyds forced Bounce Back Loan users to open business accounts
The Competition and Markets Authority (CMA) has criticised Lloyds Bank for forcing 30,000 small company owners to open fee-paying business accounts to get Bounce Back Loans from the Government's support scheme. The customers were mostly sole traders running their businesses from their current account. Lloyds said it had no processes in place to lend to businesses through personal accounts and so asked them to open a business account. The bank alerted the CMA and has now agreed to a series of remedies to ensure that customers are not impacted.
City of London says return is slow going
Catherine McGuiness, policy chair at the City of London Corporation, has said confidence in using public transport is holding bankers back from returning to their offices. She said she was “very concerned” about how the lack of people in the financial district was hitting local shops and cafes. Some 40% to 50% of staff are expected to return to the office in the medium term, McGuiness added.
Mortgage commitments sink during virus lockdown
The value of new mortgage commitments sunk to its lowest level in a decade during the lockdown, figures show. In Q2 of 2020, the value of new commitments was £34.3bn - 53.2% lower than a year earlier, according to lenders and administrators’ statistics released jointly by the Bank of England and Financial Conduct Authority. The latest figure was the lowest quarterly total since the first quarter of 2010.
British Business Bank seeks funding boost to drive UK recovery
Keith Morgan, the outgoing CEO of the British Business Bank, has called for the Government to provide more funds to support industries and regional growth as the country rebuilds after the coronavirus crisis.
Bank staff helped prevent £19m of fraud
More than £19m of fraud was prevented in the first half of 2020 thanks to the Banking Protocol scheme, which sees branch staff alert their local police force when they suspect a customer is about to be scammed.
Private equity says tax rise would drive industry out of UK
The British Private Equity & Venture Capital Association is lobbying the Government not to increase taxes on carried interest - whereby a private equity executive’s share of profits is a carried interest in their fund rather than performance-related pay. This typically enables them to pay capital gains tax at up to 28% rather than income tax at up to 45%. Arun Advani, an academic at the University of Warwick, said: “Private equity is the only part of the UK’s financial industry that gets access to these lower tax rates for individuals. So it would make sense for a government committed to supporting everyone in the financial sector to tax it at the same rate as income.” The Telegraph notes that Nat Rothschild tweeted that it was “indefensible” that carried interest is taxed at a lower rate than traditional stock option awards given to executives at UK companies. “It is another reason why the pool of listed companies is shrinking" he added.
JPMorgan alerts staff to stimulus fraud
JPMorgan has revealed in a memo to employees that the bank has uncovered evidence of employees and customers misusing the US government’s Paycheck Protection Program, unemployment benefits and other programs aimed at easing the coronavirus pandemic’s economic effects. “Some employees have fallen short, too,” the memo said. JPMorgan delivered $28bn in loans through the small-business lending scheme, the largest of any bank.
McGuinness named new commissioner
The European Union has named Mairead McGuinness as the new Irish commissioner for financial services and stability and capital markets.
IAG shareholders back $3.3bn rights issue
IAG’s plan to raise £3.25bn in equity were approved by shareholders at a virtual meeting on Tuesday. CEO Willie Walsh, who is handing over to Luis Gallego, said the coronavirus crisis is the worst the group has ever faced. “We are having to recalibrate everything we do as we anticipate that it will take until at least 2023 or 2024 for passenger demand to recover to 2019 levels,” he added.
Ryanair lands €4.4bn worth of orders for 5-year bonds
Ryanair sold €850m of five-year bonds yesterday at a yield of 3% after investors put in €4.4bn worth of orders. It is the first big European airline to sell a bond since the start of the pandemic.
EasyJet flying capacity reduction confirmed amid ongoing uncertainty
EasyJet has announced that flying capacity for the fourth quarter will be reduced, in response to ever-changing government travel restrictions.
Vistry CEO optimistic
Vistry Group is enjoying an increase in new home sales as production capacity returns to close to normal levels, with £2.7bn of forward sales at the start of September, up from £2.6bn at the end of June. The company swung to a pre-tax loss of £12.2m in the six months to the end of June, compared with a profit of £72.5m a year earlier, but boss Greg Fitzgerald said he has "not been this happy since the start of the year" and "everything is pointing to a strong performance for the full year".
Nucleus looking to grow
Edinburgh-based fintech Nucleus Financial Group has seen customer numbers top the 100,000 mark after booking positive first-half results. For the six months to the end of June, assets under administration had recovered to just over £15.8bn, close to pre-Covid highs and a 3.2% increase on a year earlier. The firm said it expects to hire more staff in coming months and will push out its new discretionary portfolio management service, Nucleus IMX.
Klarna in talks over fundraising round
Klarna is in discussions with investors regarding a new funding round which would value the Swedish payments firm at over $10bn. This comes as the company proceeds with plans to expand its business in the United States, in competition with Australia's AfterPay, which has a market capitalisation of some $15bn. The firm’s fundraising round is aiming to raise over $500m from both old and new investors.
Office space announcement from CISI and CII
The Chartered Institute for Securities & Investment (CISI) and the Chartered Insurance Institute (CII) have announced that they are to share an office in the ‘Walkie Talkie’ tower in the City of London. CISI chief executive Simon Culhane commented: “This is collaboration and cooperation in action and a great opportunity for both organisations.”
Oxford vaccine trial put on hold after adverse reaction
The AstraZeneca/Oxford University COVID-19 vaccine trial has been put on hold due to a suspected serious adverse reaction in one of the volunteers in the UK. “As part of the ongoing randomised, controlled global trials of the Oxford coronavirus vaccine, our standard review process was triggered and we voluntarily paused vaccination to allow review of safety data by an independent committee,” a spokesperson for AstraZeneca said.
Meggitt results releases as firm prepares for second half uncertainty
Aerospace and defence components supplier Meggitt has indicated increasing uncertainty over the second half, suspending its interim dividend after it reported a first-half loss. The company is on course to deliver £400m to £450m in cost savings, reporting a pre-tax loss of £368.4m for the first half against a profit of £72.6m in the year earlier period. Group revenues, meanwhile, declined 14% to £917m.
DS Smith results ‘in line with expectations’
DS Smith has reported trading in line with expectations as growth in the packaging group’s ecommerce business offset coronavirus effects.
MEDIA & ENTERTAINMENT
Apple supplier posts record first half revenues
Cardiff semiconductor firm IQE has seen revenues increase by a third to £89.9m in the first half of the year, representing a 35% increase on the year earlier period. The company, which is believed to be a supplier for Apple’s smartphone cameras, reported a loss before tax of £6.2m following a write-down of contracts and patents.
New chief executive named by Ten Entertainment
Ten Entertainment has announced that chief executive Duncan Garrood has resigned, with Graham Blackwell appointed interim chief executive with immediate effect.
ByteDance gives bonuses to staff after TikTok turbulence
ByteDance workers are to receive bonuses as the TikTok owner seeks to reward staff amid turmoil over its future, following bans in India and the US.
JD Sports withholds rent on its 390 UK stores
JD Sports is refusing to pay rent on 390 of its UK stores, continuing to battle with landlords despite its half-year sales barely being touched by the pandemic. Revenues dipped just 6.5% in the six months to August 1, But JD, which also owns Go Outdoors, Blacks Leisure and Millets, is trying to draw landlords into negotiations to cut rent.
Iceland creates 3,000 new jobs
Iceland has created 3,000 new jobs to cope with the extra demand for online groceries, the supermarket has said. Online orders surged 600% after the coronavirus lockdown began in March. The new jobs include extra delivery drivers and more staff in stores for picking online orders.
European football faces €3.6bn shortfall as pandemic leads to ‘cash crisis’
Andrea Agnelli, president of Italy’s Juventus club and chairman of the European Club Association, has warned clubs are facing a €3.6bn revenue shortfall due to the coronavirus pandemic.
Haldane warns against furlough scheme extension
Andy Haldane, the Bank of England’s chief economist has warned the Government against extending the furlough scheme, arguing that it would interrupt the “necessary process of adjustment” that was already underway. Rejecting concerns about a spike in redundancies, Mr Haldane said it was the central bank and Government’s job to support the transition to new ways of working. In a City AM podcast, he said the pandemic has caused “lasting structural damage” to the economy and that “regrettably, some business will not make it through”. His comments come as figures from the Insolvency Service show that employers filed plans in June and July to make more than 300,000 job cuts. This would be in addition to the 730,000 employees already made redundant during the pandemic and the 300,000 self-employed people unable to find work.