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Daily News Roundup: Thursday, 8th November 2018

Posted: 8th November 2018

BANKING

Banks face new PPI claims under new FCA rules

Lenders may have to make more PPI claim payouts, with the Financial Conduct Authority requiring banks to write to 150,000 customers who have already had previous claims rejected. Jonathan Davidson, a director at the FCA, said: "The proposed mailings will help certain consumers who have previously complained about regular premium PPI but been rejected to engage with our campaign and consider whether they want to make a new complaint about undisclosed commission before the deadline."

Lloyds invests in digital platform

Lloyds Banking Group has invested £11m for a 10% stake in fintech firm Thought Machine, which is developing a new core banking platform and is seeking to simplify outdated online systems. On the deal, Zak Mian, group director of transformation at Lloyds, said: “A key part of our recently launched three-year strategic plan is applying technology innovation to meet our customers’ evolving needs.”

Barclays to reduce infrastructure team

Barclays has told 134 UK staff in its technology infrastructure team their roles may be under threat as it reorganises its Global Technology Infrastructure and Services division. It has been reported that any redundancies will not take effect until May next year at the earliest. A Barclays spokesperson said: “We will try and reduce the number of colleagues impacted wherever possible, and we are committed to supporting them throughout the process.” The reshuffle is set to see the bank add around 50 jobs to a team in Pune, India.

PRIVATE EQUITY

Goldman announces new partners

Goldman Sachs has named 69 new partners, with women making up 26% of the promoted class. Some 20% of the new partners are Asian and 6% are black. A married couple has been picked to join the partnership ranks for the first time, with Beat Cabiallavetta and Niharika Cabiallavetta among 17 London executives made partners.

CEO feels ‘horrible’ over Goldman claims

Goldman Sachs CEO David Solomon, has said that he feels “horrible” about accusations that former employees broke the law when handling Malaysian state investment fund 1MDB. Mr Soloman said the issue was “very distressing,” adding: “I feel horrible about the fact that people who worked at Goldman Sachs, and it doesn't matter whether it's a partner or it's an entry-level employee, would go around our policies and break the law.”

British investors provide a fifth of VC for European start-ups

Analysis by data company Dealroom shows that British-based investors provided a fifth of all venture capital for European start-ups in 2017, with only US investors delivering a larger source of equity funding.

Moore Capital boosts line-up with Goldman veteran

Konstantinos Pantazopoulos, a former global head of rates trading at Goldman Sachs, has joined hedge fund Moore Capital.

Former Huarong chief arrested as China reins in bad banks

Lai Xiaomin, previously chairman of China Huarong Asset Management, has been arrested by Chinese authorities, with it suggested this stems from an investigation by China's anti-graft agency.

INTERNATIONAL

Investors sue banks over market rigging

A group of institutional investors including BlackRock and Allianz SE's Pacific Investment Management has sued 16 major banks over claims they rigged prices in the $5.1trn-a-day foreign exchange market between 2003 and 2013, violating US antitrust law. The banks being sued are: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and UBS. The lawsuit, filed in the US District Court in Manhattan, comes from plaintiffs that decided to "opt out" of nationwide litigation that has resulted in $2.31bn of settlements with 15 of the banks.

Citibank handed $38m SEC fine

Citibank has been fined more than $38m by the US Securities and Exchange Commission (SEC) for abuse in handling American Depositary Receipts to brokers. The watchdog said practices by Citibank inflated the total number of a foreign issuer’s tradeable securities, resulting in “abusive practices such as inappropriate short selling and dividend arbitrage that should not have been occurring”. Citibank, which the SEC says has agreed to pay the fine without admitting or denying the investigation’s findings, said it is “pleased to have this matter resolved.”

ECB chooses Enria for banking watchdog

The European Central Bank’s governing council has backed Italy’s Andrea Enria to become the chair of the Single Supervisory Mechanism, putting him in pole position to become the eurozone’s chief banking supervisor. Sharon Donnery, a deputy governor at the Central Bank of Ireland, was also in the running.

BBVA pioneers syndicated blockchain loan

Spain’s BBVA, Japan’s MUFG and France’s BNP Paribas have completed the first syndicated loan on the blockchain. BBVA says the technology speeds up the process from about two weeks to a day or two.

Australian regulator looks to lift capital ratio

The Australian Prudential Regulation Authority intends to lift the capital requirements for the country's four biggest lenders by four to five percentage points by 2023.

Credit Suisse withdraws from South Africa

After over 10 years in South Africa, Credit Suisse has withdrawn from the country as CEO Tidjane Thiam continues to implement changes across the business. The lender is concluding a three-year project to scale back investment banking and focus on managing wealthy investors’ money. Rival Deutsche Bank intends to maintain a physical presence in South Africa.

Retail and investment banking boost profits at Crédit Agricole

Third-quarter profits came in at €1.1bn at Crédit Agricole, helped by the firm’s retail and investment banking divisions. The results beat analysts’ expectations of nearer €1bn.

French banks get set to cut UK staff ahead of Brexit

With Britain’s departure from the EU approaching, French lenders BNP Paribas, Credit Agricole and Societe Generale are moving forward with plans to reduce their UK workforces.

Bankers fined

The Bank of England has fined Akira Kamiya, former chair of Mitsubishi UFJ Securities’ EMEA division, for not disclosing that he was about to be banned from activities in the US and was investigated by New York’s Department of Financial Services when the bank was fined $315m. He was charged £22,700 by the Prudential Regulation Authority, while Takami Onodera, a non-executive director at the bank at the time, was hit with a £14,945 penalty.

Spain to force banks to pay stamp duty

The Spanish government is to pass a law obliging banks to pay mortgage stamp duty. This follows a Supreme Court ruling on Tuesday which said customers and not banks had to pay the tax, reversing a previous ruling declaring that lenders were legally responsible.

AVIATION

Wizz Air profit guidance downgraded

An increase in fuel bills of $80m (£70m) has led budget airline Wizz Air to downgrade its full-year profit guidance by 21%, to between €270m and €300m.

AUTOMOTIVE

BMW profits hit in third quarter

Third quarter revenues at BMW grew by 4.7% to €24.7bn (£21.5bn) compared to the previous year, with deliveries to customers rising by 0.3%. Challenges in the market and tensions in global politics led to profit before tax falling to €1.8bn, a 26% reduction year-on-year, the firm said.

FINANCIAL SERVICES

Pensioners’ complaints rise but fewer cases won

In 2017/18, complaints about pensions reaching the Financial Ombudsman totalled 5,257, a three-year high and an increase on the 5,160 the year before and the 4,495 when pension freedoms were first introduced. This year also saw a reduction in the proportion of complaints decided in the consumer’s favour, to 31%.

Firms reveal fundraising

Equity crowdfunding platform Crowdcube has announced the close of a £8.5m fundraise, led by venture capital firm Draper Esprit. This came as Crowdcube reported record levels of revenue last quarter, reaching £1.6m – up 60% on the same period in 2017. Elsewhere, peer-to-peer lender Zopa will today reveal the final close of its fundraising round at £60m. The latest batch adds £16m to £44m raised earlier this year. The firm will put the cash toward growth of its yet-to-launch digital banking effort.

Debt firm shut down

Debt management firm Total Debt Relief Limited has been put into compulsory liquidation at the High Court following a case brought by the Financial Conduct Authority. Barrister Simon Jones for the FCA told the hearing funds appear to have been “misappropriated and taken out of this jurisdiction to the United States.”

HOSPITALITY & LEISURE

Wetherspoon shares fall on staff wage increase

Shares in pub operator J D Wetherspoon fell 10% after the firm announced a rise in sales, alongside a warning that its decision to increase staff wages but not prices will impact full-year profits.

London restaurant closures at highest level in decades

Independent restaurant closures in London have increased 40% on last year, with around 117 shuttered in the capital in the year to September 2018.

MEDIA & ENTERTAINMENT

ITV cautions on advertising revenues

ITV saw shares dip yesterday as it predicted a fall in advertising revenue at the end of the year, saying it expects its total advertising revenue to be down by as much as 8% in December compared with last year.

REAL ESTATE

House price growth weakest for five years, Halifax says

House prices are enduring their lowest rate of annual growth since March 2013, according to Halifax's latest house price index, with growth down to 1,5%. The average price of a house hit £227,869 in October. Elsewhere, Coutts says prime London prices are down 14.7% from their peak in 2014, and transaction activity has fallen by about a third. Separately, the Royal Institution of Chartered Surveyors says the property market is at its weakest for six years, with chief economist Simon Rubinsohn, saying: “The uncertainty about the economic outlook on the back of the never-ending Brexit negotiations appears a key drag on sentiment.”

Persimmon boss quits over bonus fallout

Persimmon chief executive Jeff Fairburn, whose bonus sparked controversy, is to leave the housebuilder, with the firm saying “distraction” over the payout was damaging its reputation. He is stepping down “at the request of the company” but will keep his £76m bonus. Elsewhere, housebuilder Redrow’s founder and chairman Steve Morgan has revealed that he is retiring, to be replaced by chief operating officer Matthew Pratt.

RETAIL

Marks & Spencer stores face closure

Marks & Spencer chief executive Steve Rowe has announced that more branches will have to close as the chain seeks to turn its fortunes around. The chain’s like-for-like sales were down 2.2% in the six months to September 29. Pre-tax profits hit £126.7m, although they were depressed by £96.8m in one-off costs.

Mayfield to stand down

Sir Charlie Mayfield, chairman of John Lewis, has announced that he will step down in 2020.

ECONOMY

Limited lending stifles growth

The Federation of Small Businesses has warned that limited access to finance, weak demand for loans and ignorance of alternatives to banks is restricting economic growth. It found that companies were "unaware of different finance options and over-reliant on loans from 'the' Big Four banks", adding that a no-deal Brexit could cut off European financial support.

OTHER

Barclays economists predict 'orderly' Brexit

Barclays' European equity strategy division has predicted that a Brexit deal will be agreed by the end of the year, along with a bumper boost for the pound. The economists suggested that an orderly Brexit could also make UK stocks “more investable” to global investors.

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