TSB questions IT investigation
A 257-page report by law firm Slaughter and May has identified the issues behind an IT meltdown at TSB which left 1.9m customers unable to access their accounts and cost the bank more than £350m. The report says the bank’s board lacked “common sense” and shifted customers to a new IT platform before it had been fully tested, claiming risk and internal audit units "failed to identify important issues". It also says a contractor was not asked key questions ahead of the migration from an IT system run by its former owner Lloyds. TSB’s former chief executive Paul Pester has criticised the report’s “scattergun” approach, saying it “makes their report a complex and confused read.” Chairman Richard Meddings believes reference to a lack of common sense “is pretty harsh,” adding: “There are a number of factual inaccuracies in the report. The narrative about what went wrong and in what order isn't what we know." He added an apology over the issue, saying he wanted to "personally apologise again for the service disruption which customers experienced.”
RBS takes on the ‘upstarts’ with Bó
The Times’ Katherine Griffiths looks at Royal Bank of Scotland's digital bank, Bó. She says some RBS customers will be drawn to Bó, suggesting: “it is surely better to lose customers from its NatWest lender to its own digital bank than to Monzo,” noting that Bó is more of a competitor to its parent than Marcus is to Goldman Sachs. She also suggests that bigger banks’ digital offerings – such as Bó, HSBC's Project Iceberg or Standard Chartered's planned digital bank - have certain advantages over “the financial technology upstarts” – namely, experience, data and the economics of the business.
Charity accounts down
Defaqto research shows that the number of bank accounts that donate money to charity has fallen 59% to just 28% in five years. Of the remaining charity bank accounts, all are offered by building societies.
Firms consider links with Duke
A number of businesses are considering their links with Prince Andrew following a BBC interview in which the Duke of York addressed his friendship with convicted sex offender Jeffrey Epstein, with Standard Chartered confirming they would not be renewing sponsorship deals for the [email protected] initiative.
Cobham deal set for green light
Advent looks set to be given the go ahead for its takeover of defence firm Cobham after Business Secretary Andrea Leadsom said she is “minded to accept” binding undertakings that would come as a condition of the deal. These include pledges that the US private equity firm would protect national security. Advent has agreed to inform the Ministry of Defence if it wants to sell part or all of Cobham and pledged to employ British directors on sensitive UK contracts. The pledges came after Mrs Leadsom released a redacted report from the Competition and Markets Authority revealing security concerns from the Ministry of Defence about Cobham’s work on UK military contracts.
Investors pay premium for a stake in private equity despite rising hostility
Investors are on course to trade record stakes in private equity funds this year, with $60bn traded so far. A full-year forecast of $90bn would shatter last year's record $66bn.
Fidelity wins bitcoin trading and custody licence in New York
The New York State Department of Financial Services has granted asset management group Fidelity a trust licence to offer trading and custody of bitcoin.
Small German savers hit with negative rates
Co-operative Volksbank Fürstenfeldbruck has become the first German lender to pass the cost of negative interest rates onto customers, with a -0.5% depositary charge on new instant access savings accounts with small deposits.
EasyJet profit dips
EasyJet has reported a 26% dip in profit before tax, with it down to £427m for the 12 months to the end of September, while revenue was up 8.3% to £6.39bn. The firm has announced plans to offset all jet fuel emissions, making it the world’s first major airline to operate net-zero carbon flights across its entire network. EasyJet also revealed a new-look package holiday business, with EasyJet Holidays accepting bookings for winter 2019 and summer 2020.
Snoop gets regulatory approval
Ex-Virgin Money boss Dame Jayne-Anne Gadhia's fintech start-up Snoop has won approval from the Financial Conduct Authority to allow it to operate as an “information service provider,” meaning it can receive financial data from banks to provide personalised insights about customers’ accounts.
Equiniti warns on earnings
Equiniti has indicated that its full year earnings will be towards the lower end of market expectations. It said that though revenue would be at the upper end of its previous guidance of £550m to £567m, earnings for the year would likely come in at between £136m and £142m due to weaker higher margin UK corporate activity.
LEISURE AND HOSPITALITY
Hospitality sector urges rates reform
UK Hospitality, which represents 90% of the industry, has called for a root and branch reform of business rates, calling it a “discriminatory” tax. UK Hospitality has called for a digital services tax to be levied on online business and also wants taxes on out-of-town warehouses brought in line with those levied on town centre shops.
Ei Group earnings down ahead of Stonegate deal
Earnings at pub operator Ei Group dropped this year after it disposed of 354 venues. Though revenue was up 4.17% in the 12 months to September 30, from £695m to £724m, the firm reported a loss after tax of £209m from a profit of £72m last year. The pub operator, formerly known as Enterprise Inns, is progressing an offer by Stonegate Pubs, which also owns Slug and Lettuce, Walkabout and Yates, to buy it for £1.3bn.
Factory orders up but still low
The Confederation of British Industry (CBI) says that factory orders remain near decade lows despite growth this month. The CBI said while orders are up to similar levels as those recorded in August, they are still close to October’s nine-year low. while over 300 manufacturers' total order books improved compared with October, the sector officially contracted in Q2 and flat-lined in Q3, leaving it close to recession. The analysis shows that that manufacturing sector was 1.4% smaller in the three months to September than in Q3 2018. Anna Leach, the CBI’s deputy chief economist, said that while “the thick fog of uncertainty from a no-deal Brexit has lifted somewhat”, weak global trade and a subdued domestic economy means pressure remains.
MEDIA AND ENTERTAINMENT
Music boosts economy to the tune of £5bn
Research from industry body UK Music shows that the music industry contributed more than £5.2bn to the economy last year, up from £4.5bn in 2017. The live music sector grew by 10% in 2018, accounting for £1.1bn, while revenue from exports rose from £2.6bn to £2.7 bn. Employment in the industry hit a record high of 190,935.
First-timer mortgages rise in September
Figures from UK Finance show there were 29,100 new first-time buyer mortgages completed in September, a 1.6% increase on September 2018. The number of home movers was also up year-on-year, climbing 1.8%, but these were outnumbered by those taking their first step onto the property ladder, with 50 more first-timers than movers. The data also shows that 5,500 new buy-to-let home purchase mortgages were completed in September, a dip of 3.5% on the same month a year ago. September saw 17,740 new remortgages with additional borrowing, a 5.9% rise, while re-mortgages with no additional borrowing were up 8% on September 2018, with 19,140 completed.
Fees cost leaseholders mortgages
Santander is refusing to offer mortgages on new-build homes that include uncapped management fees on fears that leaseholders will not be able to afford them. Barclays is also reviewing its policy, while Nationwide has declined a “small number of cases”, according to Mortgage Solutions.
AO World pulls plug on Dutch business
At a cost of around £3m, online electrical white goods outfit AO World is to leave the Netherlands by March 2020. Its profit-shy Dutch arm loses around €6m (£5.1m) per year and boss John Roberts wants to concentrate on turning around its German business. Total revenue jumped 16.3% to £470.1m and pre-tax losses narrowed to £5.9m from a £10.9m loss in the six months to September 30, after UK sales rose 20.3% to £402.7m.
Manchester City announce record revenue
Manchester City posted record revenue of £535m. The club’s profits totalled £10.1m in the 12 months ending June 2019. City’s Premier League and Champions League TV rights deals rose from £211.5m in 2017/18 to £253.2m, while match day revenue fell by £1.7m and commercial revenue dipped £5.3m. The club's wage to turnover ratio rose from 52% in 2017/18 to 59% as the wage bill climbed to £315m from £260m.
The Royal Mint says it will melt down 1m special Brexit 50p coins made with the wrong date on them. It paused production in mid-October when it became clear Brexit would be extended beyond the Halloween deadline, but not before 1m coins were made.