Daily news bulletin featuring top stories from today s media headlines: Competition watchdog criticised, Chancellor urged to halt RBS sale and UK challenger banks target SMEs.
BANKING
Competition watchdog criticised
Alasdair Smith, chairman of the retail banking investigation at the Competition and Markets Authority, has been accused of laziness by MPs on the Treasury Select Committee. The MPs pressed Mr Smith to say how much consumers actually pay for supposedly free bank accounts. Mr Smith said he knew how much his own account cost.
However, he said he was not able to give MPs any figures for other consumers. Committee member Mark Garnier was highly critical. The answers you are coming up with appear to be lazy, he said.
Meanwhile, Benny Higgins, the boss of Tesco Bank, has criticised the CMA s inquiry. In a letter read out to the committee, Mr Higgins said: This report (from the CMA) has only begun to scratch the surface. We must increase the transparency around the true costs customers incur when using their current accounts.
Chancellor urged to halt RBS sale
George Osborne is being urged to stop the sell-off of Royal Bank of Scotland shares at a loss before a parliamentary debate on the future of the bailed out bank.
Campaigners for banking reform are arguing that the public is opposed to the fire sale of the government stake in the bank, which fell for the first time in August when the chancellor sanctioned the sale at a 1bn loss to the taxpayer. The campaigners want RBS to be used to support rural communities and play its part in boosting the economy. They cite a petition calling for an end to the RBS sale which received 119,000 signatures.
UK challenger banks target SMEs
Virgin Money and TSB are expected to join Metro Bank in launching new products aimed at SMEs in the coming months, after reporting muted success in attracting customers from high street banks.
HSBC, Barclays, Lloyds and Royal Bank of Scotland provide 90% of lending to businesses, and 85% of SME current accounts, according to the Competition and Markets Authority.
OneSavings loan book grows
OneSavings has increased its lending by almost 1bn so far this year, as it looks to make the most of the buy-to-let mortgage boom. The bank, which grew out of the Kent Reliance Building Society, now has a total loan book of 4.9bn and expects to increase net lending by one-third this year.
Worldpay poised to name female director
Sky News reports that Worldpay is set to name Deanna Oppenheimer, a former boss of Barclays UK retail and business bank, as its first female director.
PRIVATE EQUITY
Oberthur calls off IPO
Oberthur Technologies, the world s second largest manufacturer of smartcards, has postponed its IPO on Paris Euronext market citing concerns over current market conditions. Oberthur, which is owned by Advent International, had hoped to raise ‘ 500- ‘ 600m ( 354m- 425m) to pay debt and fund research into digital security.
Buyout funds warned
Standard & Poor s has warned that credit risks are rising because private equity groups are looking to put a near-record $540bn cash pile to work.
Analysts at the rating agency said that despite the lack of recent megadeals excessive leverage has increased credit risk.
INTERNATIONAL
Deutsche Bank fined
Deutsche Bank has been fined $285m ( 185m) by US regulators for working with US-sanctioned countries Syria and Iran. The bank will pay penalties to the New York State Department of Financial Services and the Federal Reserve. The bank also violated various New York state laws and is paying the two agencies separately.
In addition to the fine, Germany s largest bank will install an independent monitor and fire six employees who were involved in the sanctions-evasion scheme, and bar three other employees from any work involving the company s US operations.
AUTOMOTIVE
VW scandal widens to CO2 emissions
Shares in VW have dropped after it reported irregularities in carbon dioxide emissions levels, which could affect about 800,000 cars in Europe. An internal investigation by the firm into diesel emissions revealed that CO2 emissions and fuel consumption were understated during standards tests. VW said it concerned mainly diesel but also some petrol models and could affect VW, Skoda, Audi and Seat cars.
It comes weeks after VW was accused of cheating nitrogen oxide level tests. The firm estimated the problem could cost about ‘ 2bn ( 1.4bn). VW has already put aside ‘ 6.7bn ( 4.7bn) to meet the cost of recalling 11m diesel vehicles worldwide that were fitted with so called defeat devices that circumvented tests for emissions of nitrogen oxides.
AVIATION
Heathrow willing to cut night flights
Executives at Heathrow Airport have said to MPs that they are prepared to cut night flights if a third runway is built, but refused to commit to a full ban on early morning landings at the west London airport.
A prohibition on scheduled flights between 11.30pm and 6.00am was one of a host of restrictions proposed by the Airports Commission. John Holland-Kaye, chief executive of the airport, warned the Commons environmental committee that scrapping night flights would have a big cost to the UK economy because those are very valuable trading routes to the Far East , but added that he was confident that we will be able to find a way through the proposal.
FINANCIAL SERVICES
CashEuroNet UK ordered to pay 1.7m to borrowers
CashEuroNet UK, which owns payday lenders QuickQuid and Pounds to Pocket, has agreed to write off more than 2,500 loans to customers and refund almost 1,500 people who were granted loans they could not afford to repay. The firm has agreed with the Financial Conduct Authority to provide redress worth 1.7m.
The FCA conducted a skilled person report on the firm s lending decisions in September 2014 and found problems with lending criteria.
Brexit may suit hedge funds Gordon
Sarah Gordon argues in the FT s Inside Business column that a Brexit may suit hedge funds, but that other investors should weigh the risks. She says post-Brexit, UK hedge funds and private equity firms would face a relatively easier test than others if they want to continue providing services to customers in continental Europe. However, other financial services companies, such as banks, would face a more onerous requirement.
For them, she states that the key test is likely to be the equivalence of UK regulations with those in the EU, rather than with international norms.
Xchanging slumps
Shares in Xchanging fell by nearly 6% yesterday after the insurance outsourcing group said that Apollo Global Management had decided against tabling a bid for the company. Xchanging said that Apollo had confirmed that it would not be making an offer, leaving the path clear for a 160p-a-share bid from Capita, the outsourcing business.
LEISURE & HOSPITALITY
Whelan muscles in
DW Sports Fitness, the retail and fitness group owned by JJB Sports founder Dave Whelan, has acquired seven LA Fitness clubs. The sites were among the 43 LA Fitness clubs acquired in May by Pure Gym for up to 80m.
MANUFACTURING
JCB announces job cuts
JCB has announced up to 290 job cuts in a move which leaves more than 10% of the company s workforce facing redundancy.
The construction equipment company blamed a rapid slowdown in machine orders worldwide, with the cuts taking place across JCB s eight Staffordshire factories and in Wrexham.
MEDIA & ENTERTAINMENT
Facebook prepares to launch news app
The FT reports that Facebook is preparing to launch its news app Notify. The standalone app will alert users to stories from professional media outlets as Facebook steps up its battle against Snapchat and Twitter. The app will contain content from a range of print, digital and video companies, including Vogue, Mashable, CNN and the Washington Post.
PROFESSIONAL SERVICES
Rise of the robots will displace workers
A report from analysts at Bank of America Merrill Lynch says a robot revolution will transform the global economy within 20 years cutting the costs of doing business but exacerbating social inequality.
The report suggests that as well as robots carrying out manual work, the development of artificial intelligence (AI) means computers are increasingly able to think , and perform analytical tasks once regarded as requiring human judgment. The analysts cite a study from Oxford University which claims that the technological revolution could leave 35% of all UK workers, and 47% of those in the US, at risk of being displaced by technology over the next 20 years.
RETAIL
M&S unveils rise in profits
Marks & Spencer has unveiled a better-than-expected rise in half-year profits, despite a further fall in sales at its clothing arm as it cut back on sales promotions. Underlying pre-tax profit increased to 284m for the six months to September 26th from 267.6m, on sales up 1% to 4.9bn.
However, a series of one-off costs meant overall pre-tax profits fell 22.7% to 216m. General merchandise second-quarter sales fell 1.9% which was significantly worse than the 0.4% fall the previous quarter and lower than the 1.2% drop analysts had forecast.
Scottish retail sales rise
According to new figures from the Scottish Retail Consortium, retail sales in Scotland increased slightly in the third quarter. The latest Retail Sales Index showed that between July and October, the volume of sales rose by 1%, and grew by 4% annually.
The value of sales, without adjusting for inflation, increased by 0.3% in the third quarter of 2015 and grew by 1.2% annually.
SPORT
Barclays calls time on tennis tournament
Barclays Bank is to end its sponsorship of the ATP World Tour Finals tennis tournament. The bank said that due to changes in commercial priorities it would not sponsor the event beyond 2016. The decision follows the bank s move to drop its sponsorship of the Premier League at the end of this season.
ECONOMY
Service sector growth picks up
Growth in the UK service sector accelerated last month, according to a closely watched survey.
The latest Markit/CIPS service sector purchasing managers index (PMI) rose to 54.9 from the previous month s figure of 53.3. A figure above 50 indicates growth in the sector. It was first time for four months that the growth rate has improved, although Markit said the pace remained relatively subdued .
Sterling rose to its highest point against the euro since mid-August at 70.78 pence after the numbers were released, and against the dollar it rose to $1.5446 as analysts predicted the figures may encourage more policymakers to raise interest rates before the end of the year.
The survey found that jobs growth hit a five-month high among services companies, which account for about three-quarters of activity in the UK s private sector.
OTHER
Recession predicted following Brexit
Morgan Stanley has warned that Brexit could lead Britain to flirt with recession in the best case but may face full-blown recession if there were a disorderly and costly exit.
In the long term, the UK would expect to see lower levels of immigration and reduced capital inflows outside the EU that would result in a material reduction in potential growth , the bank said.
Other Daily News Roundups
Wednesday 4th November 2015
Tuesday 3rd November 2015
Monday 2nd November 2015123
References
- ^ Wednesday 4th November 2015 (www.btgfc.com)
- ^ Tuesday 3rd November 2015 (www.btgfc.com)
- ^ Monday 2nd November 2015 (www.btgfc.com)
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