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A new rule preventing insurance firms quoting customers a higher price for renewing their home or motor…

   News / 04 Jan 2022

Published: 04 January 2022
Location: London, UK

By Suzanne Evans, Director, Political Insight


Happy New Year! Hope you all had a good Christmas. Here’s our first business news update of 2022 - slightly earlier than planned.
 
A new rule preventing insurance firms quoting customers a higher price for renewing their home or motor insurance than they would pay if they were a new customer came in to force on 1st January. The Financial Conduct Authority (FCA) believes this will save consumers £4.2bn ($5.6bn) over the next 10 years.
 
The UK's financial regulator is consulting on a redress scheme over the British Steel pension transfer scandal. More than 7,500 workers lost huge amounts of money after acting on poor advice in 2017 to take money out of the scheme. "Under a redress scheme, firms would be required to review advice they gave to BSPS members to transfer their pension. If the advice was unsuitable and resulted in a financial loss, the firm would be required to provide compensation," the FCA said. The move by the Financial Conduct Authority follows criticism of the body by UK lawmakers who said it was "unfit for purpose" as it was apparently unable to help wronged consumers affected by the scandal.
 
Sports Direct founder Mike Ashley’s retail group is reported to have tabled an offer to buy Footasylum, the trainer retailer that rival JD Sports has been instructed to sell by the competition regulator. “The offer is the latest development in a running battle between Ashley’s Frasers Group and JD Sports over access to the best goods from key suppliers, such as Nike and Adidas, as well as the attention of shoppers,” The Guardian says. JD Sports was ordered to sell Footasylum’s 65 stores by the Competition and Markets Authority (CMA) in November, after the watchdog ruled that JD’s purchase of the smaller chain of trainer shops would result in a worse deal for shoppers. The regulator will also have to approve any new purchaser, unless JD Sports wins its current appeal against the ruling. Frasers owns the House of Fraser department stores and luxury streetwear retailer Flannels as well as Sports Direct. The group has notified the CMA of its plan to make an offer, according to a report in the Sunday Times. At the time of the CMA’s decision, JD said the regulator blocking its merger with Footasylum “defies logic”.
 
Pub chain JD Wetherspoon has appointed four employees as directors in response to concerns there was not enough pub experience at board level. Managers were invited to apply for the positions and now Debbie Whittingham and Hudson Simmons have been appointed to the board. Whittingham is Wetherspoons' regional manager for the West Midlands and Simmons, who is an area manager for Sheffield, was named 'pub manager of the year' in 2010. Wetherspoons also named Will Fotheringham and Emma Gibson as associate employee directors. Fotheringham is regional manager for the Manchester area, while Gibson is pub manager of the Imperial in Exeter.
 
Rolls-Royce says Qatar has agreed to invest £85m in its nuclear reactor business in return for a 10% stake. The investment is being made by the emirate's sovereign wealth fund, the Qatar Investment Authority (QIA).
 
Budget Irish airline Ryanair more than doubled its full-year loss forecast just before Christmas and cut its traffic estimates, pinning the blame on restrictions imposed in response to the Omicron variant. The company now expects to report a full-year net loss of between €250m and €450m, up from previous guidance of between €100m and €200m. A pre-Christmas ban on UK arrivals into France and Germany, and the suspension of all EU flights to and from Morocco hit the company especially hard, forcing it to cut its December traffic estimate from between 10m and 11m to between 9m and 9.5m, and slash its planned January schedule capacity by 33% to between 6m and 7m.
 
Hungary-based budget airline Wizz Air has bought Norwegian Air's slots at Gatwick Airport for an undisclosed sum, meaning it will base four additional Airbus A320neos at the airport from spring 2022. Whizz also said this morning that its total December capacity soared by almost 200% year on year, reflecting eased Covid-19 restrictions. The company says it sold 3.5m seats. Passenger numbers were up 293% to 2.6m, while the load factor was up 19.3 percentage points to 75.4%.
 
UK outsourcing company Capita has sold its AMT Sybex software business to Jonas Computing for up to £40m, in its latest move to simplify its business following a decline in full-year pre-tax profit because of Covid restrictions, and focus on its two core divisions, Capita Public Service and Capita Experience. The sale of AMT Sybex brings the total proceeds from disposals in 2021 to at least £643m, Sharecast News says.
 
Octopus Renewables Infrastructure Trust has invested £2.5m and agreed to provide up to a further £7.5m in development funding for nine newly-formed joint venture onshore wind farm development companies with specialist UK onshore wind developer Wind 2. The London-listed infrastructure investment trust said the joint ventures would initially target the development over the next five to 10 years of up to nine onshore wind farms in Scotland and Wales, with a potential combined capacity of around 570MW.
 
Santander ran into problems on Christmas Day, when the bank accidentally paid out £130 million to about 75,000 people and companies, the Times said. Duplicate payments were accidentally made to customers in receipt of normal one-off or regular payments from 2,000 businesses with accounts at the high street bank. The second payment was apparently made from Santander's own reserves, leaving the bank significantly out of pocket, but its own customers unaffected.
 
Metro Bank has been fined £5.38m by the Bank of England for failures in its regulatory reporting following accounting inaccuracies in 2019. The Prudential Regulation Authority said incorrect risk weightings in some of its commercial loan portfolios meant the bank had misrepresented its regulatory capital position in regulatory returns between May 2016 and when they were corrected in January 2019. The bank was accused of pursuing a rapid growth plan without adequate investment in regulatory reporting governance and controls in the years leading up to 2019.
 
Britain's biggest high street bank is finalising plans to buy a stake in Bink, a fintech business which allows customers to ditch their plastic loyalty cards by linking consumers' payment cards with the loyalty schemes of participating retailers. Sky News understands that the Lloyds Banking Group is close to investing millions of pounds in return for a minority stake in Bink, which was set up in 2015. Bink has signed up several retail partners, including Harvey Nichols, Iceland and the Japanese food chain Wasabi, since its launch. Barclays reportedly invested approximately £10m in Bink at the time, giving seven million UK retail banking customers access to the app. It is not yet clear how much Lloyds plans to invest in the business.
 
Tencent Holdings, the Chinese technology behemoth, is taking a stake in Monzo, the British-based digital bank which has confounded expectations by securing a $4.5bn (£3.3bn) valuation, Sky News says. Tencent, which has become a prolific investor in Europe's burgeoning tech sector, has subscribed to shares as part of a $100m (£74m) top-up to Monzo's latest funding round. A source close to the process said Tencent was investing a minority of the $100m capital injection. The Chinese company's involvement adds another prominent investor to the bank's share register, weeks after it confirmed that the likes of Coatue and the Abu Dhabi Growth Fund had become investors.
 
The owners of challenger bank Shawbrook are reportedly exploring plans to list it on the London Stock Exchange, less than five years after taking it private. According to Sky News, private equity firms BC Partners and Pollen Street Capital - which each own 50% of Shawbrook - are holding talks with investment banks about a potential initial public offering. Shawbrook was launched a decade ago in the aftermath of the 2008 financial crisis, with a focus on lending to small and medium-sized businesses. Sky sources suggested it could be worth well over £1bn in a 2022 flotation or sale, with the company having more than doubled its profits since BC Partners and Pollen Street Capital invested.
 
FTSE 100 listed bookmaker Flutter has acquired Italian online gaming operator Sisal from CVC Capital Partners Fund VI for €1.91bn in cash.
 
Consumer goods company Reckitt Benckiser has entered into an agreement for the proposed sale of the E45 brand and related sub-brands to Karo Pharma for some £200 million. The FTSE 100-listed firm said the sale was subject to the satisfaction of customary closing conditions, including consultation with employee representatives in France, and was expected to close in the second quarter of 2022.
 
A subsidy of FTSE 250 listed Balfour Beatty, Balfour Beatty Communities (BBC), one of the US military's largest private landlords, has agreed to pay $65m in fines and restitution after pleading guilty to a charge of fraud against the US Air Force, Army and Navy. A probe found employees falsified maintenance documents at Air Force bases to help the company qualify for incentive fee payments. "Specifically, BBC employees altered or manipulated data in property management software and destroyed and falsified resident comment cards to falsely inflate these metrics and, ultimately, to fraudulently induce the service branches to pay performance incentive fees which BBC had not earned," the US Department of Justice said in a statement. Forces personnel and their families were exposed to asbestos, vermin, mould and raw sewage. Two managers pleaded guilty in the case. FBI deputy director Paul Abbate said BBC "took advantage of their unique position as a military housing provider and put greed and personal profit above our servicemembers".
 
Tesla is under fire for opening a new showroom in Xinjiang, the Chinese region where authorities are accused of widespread abuse against Uyghur Muslims. The US-based electric car maker, led by Elon Musk, announced the opening in Urumqi, Xingiang's capital, on Friday, declaring on social media: "Let's start Xinjiang's all-electric journey."
 
From the end of this month, Airbnb rental hosts in the state of Oregon, USA, will no longer be able to see guests’ full names before approving their bookings. The move follows a lawsuit by three Black women from state who alleged the rental site’s use of names and photographs allowed for racial discrimination. The suit was settled in 2019. The restrictions will last for at least two years, Airbnb says.
 
David Bowie's back catalogue has been sold to Warner Music Group in a deal reported to be worth hundreds of millions of dollars. The deal covers songs from the 26 studio albums released within the star's life as well as the posthumous album Toy, and two he made with the band Tin Machine.


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