Jaguar Land Rover opens first engine plant outside the Uk in joint venture with Chery

( via – – Fri, 21 July 2017) London, Uk – –

Jaguar Land Rover has opened its first engine plant outside the UK, picking China for the new facility.

The company already has a joint venture in the country with Chery, and the car maker said the new facility was part of a 10.9bn yuan (£1.2bn) investment partnership with the domestic firm.

“The new engine plant demonstrates JLR’s long-term commitment to the Chinese market, providing customers with an exciting range of vehicles and powertrain options, as well as to its joint venture,” the company said in a statement.

JLR’s Ingenium 2-litre, four-cylinder petrol engine will be produced at the new factory in Changshu.

Opening the new plant comes a week after Jaguar launched its new E-Pace small SUV, which is expected to be the company’s biggest seller when it hits the roads at the end of the year.

Already Britain’s biggest car maker, with more than 500,000 cars rolling off its UK production lines last year, the E-Pace is expected to drive JLR closer to its target of producing 1m cars a year.

A smaller, all-electric SUV, the I-Pace, will follow next year, allowing JLR to accelerate its progress towards that target.

The E-Pace will be a first for the company in that unlike others cars in its range none of it will be produced in Britain. Although JLR has plants in China and Brazil and is building another in Slovakia, at the moment at least part of the production of all models is in the UK.

At the E-Pace’s glitzy launch, when the car performed a record-breaking barrel-roll stunt, JLR revealed that the small SUV would be built by contract manufacturer Magna Steyr in Austria, with the car later being produced in China.

JLR is racing to open new factories to meet demand for its premium vehicles, as its plants in the Midlands are all at maximum capacity.

With Britain preparing to leave the EU, the car industry also fears that it could be hit with huge cost increases in the form of import and export tariffs if the UK cannot secure a free trade deal. Building more plants and expanding production inside the EU would help reduce the impact of such measures.

By Alan Tovey

EBay shares fall on disappointing profit forecast

( via — Fri, 21 July 2017) London, UK —

EBay Inc warned on Thursday that adjusted profit this quarter could fall below analysts' estimates, as it continues to invest in marketing and revamping its platforms to attract more shoppers, sending its shares down more than 5 percent.

San Jose, California-based eBay forecast third-quarter adjusted earnings of 46 cents to 48 cents per share. Analysts on average were expecting 48 cents, according to Thomson Reuters I/B/E/S.

The online marketplace is making a big push to catch up with major rivals like Inc with three-day guaranteed delivery and a more user-friendly website. Spending millions of dollars on marketing campaigns, it is working to distinguish itself as a haven for unique items rather than commodity products.

“Our focus continues to be on improving the customer experience, and we won't hesitate to trade off short-term results when necessary,” eBay Chief Executive Devin Wenig said on a call with analysts.

Shoppers so far have responded well to eBay's new home page, showing lower bounce rates and better engagement, he said.

EBay's gross merchandise volume (GMV), or the total value of goods sold on its websites, rose to $21.47 billion in the second quarter. Analysts had expected $21.46 billion, according data and analytics firm FactSet.

Revenue for the just-ended quarter rose 4.4 percent to $2.33 billion, beating analysts' estimates of $2.31 billion. Excluding items, eBay earned 45 cents per share, in line with estimates.

“Results and guidance suggest the year is ‘on track,' although there will be some disappointment without a solid beat and raise,” Baird Equity Research analyst Colin Sebastian said in a research note. “There is unlikely a ‘quick fix' to eBay's slow volume growth profile.”

Sales and marketing costs weighed on the quarter, rising 2.4 percent to $637 million. GMV at subsidiary ticket exchange StubHub fell 5 percent from a year ago as there were fewer U.S. events than the company had expected, Wenig said.

Shares of the company, up about 25 percent so far this year, dipped 5.2 percent to $35.23 in after-hours trading.

“I think the stock was running hot into the quarter, though, and I think eBay is signalling they are going to market aggressively heading into Q4, and maybe some were looking for a guidance raise,” said Daniel Kurnos, Benchmark Company analyst.

EBay also announced a $3 billion share repurchase programme.

By Aishwarya Venugopal

Sports Direct profits fall by nearly 60% blamed on weak pound


( via — Thur, 20 July 2017) London, UK —

LONDON (Reuters) – British retailer Sports Direct reported a 29 percent slump in full-year earnings after failing to hedge against a weaker pound but its shares rose on a forecast of growth this year and hopes management was getting its house in order.

The sportswear chain, founded and run by billionaire Mike Ashley, was badly caught out by the fall in the pound after Britain's vote to leave the European Union in June last year as it sources most of its products from Asia priced in dollars.

Having failed to offset the risk of currency fluctuations for its 2016-17 financial year, the company put a hedge in place after the Brexit vote but that backfired too. It said it had now minimised the short-term impact of currency swings but remained exposed to fluctuations in the medium and long term.

However, Ashley, who owns 62 percent of Sports Direct's equity and aims to make the group the “Selfridges of sport”, said on Thursday he was encouraged by better than expected trading from a new generation of flagship stores designed to showcase brands such as Adidas and Nike.

Sports Direct, which is still battling criticism of its treatment of workers and corporate governance, said its outlook was “optimistic” and it was targeting growth in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of 5 percent to 15 percent in the current 2017-18 year.

“However, we will continue to be conservative in managing for the medium to long term, which may result in short-term fluctuations in underlying EBITDA, particularly given the continued uncertainty surrounding Brexit,” it said.

The stock, which lost half its value last year, jumped more than 7 percent on Thursday, and was 6.5 percent higher at 320.3 pence at 0825 GMT (9.25 a.m. BST), valuing the business at 1.7 billion pounds.

“The outlook statement is miles ahead of expectations – management sees growth in EBITDA next year where we'd seen a decline,” said analysts at Peel Hunt, who have an “add” rating on the stock.

“We are eager to know how Sports Direct can shift the focus of its range from own label product (50-60 percent gross margin) to third party (circa 30 percent gross) without impacting margins,” the analysts said.

Sports Direct made underlying EBITDA of 272.7 million pounds in the year to April 30, ahead of its forecast of about 265 million pounds issued in December but well below the 381.4 million pounds made in 2015-16.

Revenue increased 11.7 percent to 3.25 billion pounds but underlying pretax profit crashed 59 percent to 113.7 million pounds, reflecting both the currency movements and higher depreciation charges.

Sports Direct also said it had appointed a new chief financial officer, Jon Kempster, who has previously performed the same role at logistics group Wincanton.

($1 = 0.7696 pounds)

By James Davey

British Gas compensates customers £1.1m for missed appointments

Ton Zijp/Flickr

( via – – Thu, 20 July 2017) London, Uk – –

British Gas has paid a total of £1.1m ($1.4m) to customers in compensation for missed or delayed appointments, said its watchdog Ofgem.

The regulator said the payments were made to around 12,000 small businesses and residential customers.

The energy firm, owned by FTSE 100 group Centrica, has compensated affected customers with a £30 payment for a failed appointment. It paid an extra £30 if it did not compensate customers within 10 days. In addition, British Gas has paid another £30 to each affected customer.

Ofgem said the company approached it when it noticed errors in its compensation process. The watchdog added it had worked with the supplier to make improvements to its compensation scheme.

Ofgem senior partner for improving regulation Martin Crouch said: “British Gas did the right thing in coming forward to report this issue, and has since improved its processes to make sure that, when appointments are missed or not kept on time, all customers receive the compensation they're entitled to.

“It's crucial that suppliers keep appointments on time, and make amends when things go wrong.”

Also, earlier this month Ofgem said it would investigate British Gas for potentially misleading customers over fees for switching to other providers.

Customers planning a switch before a fixed-term deal expires can do so for free for up to 49 days before the deal ends.

But Ofgem is to examine allegations that British Gas told some customers they would have to pay a termination fees of up to £60 within that period.

The complaints were passed to Ofgem by the website MoneySavingExpert.

By Roger Baird

McCormick US spices and herbs business snapped up Reckitt Benckiser’s food for over £3bn

( via – – Wed, 19 July 2017) London, Uk – –

US spices and herbs business McCormick has snapped up Reckitt Benckiser’s food business for more than £3bn.

McCormick has beaten off rival bidders for the business, which owns brands such as French’s mustard and Frank’s RedHot sauce.

The Baltimore-based company has been trying to expand globally and last year launched a failed takeover bid for Premier Foods.

It said the move for Reckitt’s food business, first revealed by the Telegraph earlier this year, would catapult it to the top of the US condiments market, up from 10th position.

Lawrence E Kurzius, the company’s chief executive, said French’s and Frank’s RedHot would now become McCormick’s second and third biggest brands respectively.

“RB Foods' focus on creating products with simple, high-quality ingredients makes it a perfect match for McCormick as we continue to capitalise on the growing consumer interest in healthy, flavourful eating,” he said.

Reckitt said the £3.2bn valuation “reflects the quality of this highly profitable, growth business” and added that it intended to use the proceeds from the sale to reduce debt.

“We are pleased to be selling to owners who can provide the necessary resources, market expertise and global platform, whilst being a good home for our people,” said Reckitt boss Rakesh Kapoor.

The decision to offload the food unit comes months after Reckitt bought US baby formula maker Mead Johnson for £14.2bn.

“Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming RB into a global leader in consumer health and hygiene,” said Mr Kapoor.

By Hannah Boland Sam Dean

Netflix TV streaming service’s tops 100m subscribers

( via – – Tue, 18 July 2017) London, Uk – –

Netflix has topped 100m subscribers, adding more than 4m outside the US in the past three months as international expansion continues to drive the TV streaming service’s growth.

The company’s share price climbed almost 10% to $180-a-share (£138) in after-hours trading in New York on Monday after its better-than-expected trading update for the three months to the end of June. This pushed the company’s market capitalisation up to $78bn.

The company – which is worth the equivalent of almost nine ITVs or 1.5 times the size of Rupert Murdoch’s 21st Century Fox in market value terms – added 5.2m subscribers in the second quarter. This is traditionally Netflix’s slowest time of the year with it averaging growth of less than 2m in the quarter over the last five years.

Most of the growth (4.14m of the new users) came from international subscribers lured by Netflix’s combination of new shows such as The Crown and Stranger Things, plus its stalwarts House of Cards and Orange is the New Black continuing to prove their global popularity.

The figures marked a milestone for Netflix, which was founded in the US 20 years ago, with its international business accounting for more than half of total subscriber numbers for the first time.

The boom in international growth followed Netflix launching in 130 countries last year, with more than 52m of its 104m subscribers coming from outside the US. Only a handful of countries including North Korea, China and Syria do not have the service.

“Our streaming membership grew more than expected, from 99m to 104m, due to our amazing content,” said Reed Hastings, chief executive of Netflix, in a letter to shareholders. “We also crossed the symbolic milestones of 100m members and more international than domestic members. It was a good quarter.”

Netflix has committed $6.6bn (£5bn) to making and acquiring TV shows and films this year, with a bill of $15.7bn committed over the next five years.

Netflix and Amazon ‘will overtake UK cinema box office spending by 2020'

Perhaps worryingly for rivals, Hastings said the company would look to invest even more in content as its hit shows prove to be a commercial and creative success.

“With our content strategy paying off in strong member, revenue and profit growth, we think it’s wise to continue to invest,” he said. “In continued success, we will deploy increased capital in content, particularly in owned originals.”

It emerged last week that Netflix nearly doubled its Emmy nominations this year, with 91 compared with 54 last year, for 27 titles including The Crown, Stranger Things and Master Of None.

Only HBO, on which Netflix has based its model, fared better with 111 nominations. HBO spends about $2bn annually on content, with Amazon about $4.5bn, according to unofficial analyst estimates.

Recently, Netflix has culled a slew of under-performing shows, from Baz Luhrmann’s big budget The Get Down to high-concept sci-fi Sense 8, to better balance viewer interest with climbing programme costs.

Hastings said that while there is furious competition between Netflix and other subscription on-demand TV services, from digital rivals such as Amazon and Hulu to those of traditional broadcasters such as Sky and the BBC, he does not believe his company is killing their businesses.

“It seems our growth just expands the market,” he said. “The largely exclusive nature of each service’s content means that we are not direct substitutes for each other, but rather complements.

“Creating a TV network is now as easy as creating an app, and investment is pouring into content production around the world. We are all co-pioneers of internet TV and, together, we are replacing linear TV. The shift from linear TV to on-demand viewing is so big and there is so much leisure time, many internet TV services will be successful.”

Netflix said that it believes its growth momentum will continue but has issued more conservative guidance for the third quarter, forecasting about 4.4m new subscribers. About 3.65m are estimated to come from international markets.

By Mark Sweney

SMEs slammed with Late payments of more than £2 billion a year

Ken Teegardin/Flickr

( via – – Tue, 18 July 2017) London, Uk – –

The practice of late payments is slamming small and medium-sized businesses across the UK with a hefty bill of more than £2bn ever year, new research reveals.

According to figures released by Bacs Payment Schemes, small to medium sized enterprises, or SMEs, are owed a total of £14bn by customers. While that’s an overall improvement on the £30.3bn figure from five years ago, it’s still hobbling their performance.

Despite the drop in late payment debt, over a third of the 1.7 million SMEs across the country say payments are often prolonged way beyond agreed terms and The impact of late payments can often be devastating; one in five small businesses say that they face being driven into bankruptcy if they are owed between £20,000 and £50,000. Some 7 per cent of businesses say they are already in that danger zone.

Bank overdrafts are an increasingly common resource; almost a quarter of small businesses say they rely on borrowed cash to keep up with essential overheads.

The research done by Bacs also shows that 16 per cent of SMEs struggle to pay staff on time, that the majority of companies spend almost four hours a week chasing late payments, and that 12 per cent employ a specific role dedicated to pursuing outstanding payments.

Almost a third of companies face delays of at least a month beyond their terms and nearly 20 per cent are having to wait more than 60 days before being paid.

SMEs are already facing an uncertain future as a result of Brexit and what the UK’s split from the EU might mean for tariffs, regulation and their ability to employ staff from overseas.

Earlier this month, a survey of more than 1,000 investors, conducted by peer-to-peer trading platform Asset Match showed that 60 per cent were not confident the Government would help SMEs grow after Brexit.

A total of 62 per cent said they felt the Government was favouring “new-age sectors” like fintech, over traditional industries such as construction and manufacturing.

Figures published by The Federation of Small Businesses last month showed a drop in confidence among members for the first time since the aftermath of the referendum.

FSB national chairman Mike Cherry said at the time that small companies were “still reeling” from April’s business rates hike, and an accompanying note said that labour costs and the tax burden were common concerns.

Operating costs for small businesses are now at their highest in four years, according to the FSB.

By Shafi Musaddique

HS2 Manchester and Leeds routes £6.6bn in contracts awarded by UK government

( via – – Mon, 17 July 2017) London, Uk – –

Contracts announced as transport secretary prepares to unveil changes to final Manchester and Leeds routes

The government has awarded £6.6bn in contracts to build the new high-speed railway between London and Birmingham, to companies including crisis-ridden construction firm Carillion.

Construction work is due to begin in earnest next year on new stations, tunnels, embankments and viaducts on the London to Birmingham line, which forms the first phase of the controversial HS2 project.

The major infrastructure project is expected to create 16,000 jobs, with the first trains due to run between London and Birmingham in 2026.

Chris Grayling, the transport secretary, is due to update MPs later on Monday on phase 2b of the HS2 route between Crewe and Manchester and from the West Midlands to Leeds.

The TUC welcomed the contract awards as a “shot in the arm for Brexit Britain”. The union’s deputy general secretary, Paul Nowak, said: “It will provide thousands of decent jobs, billions in investment, and help close the north-south divide. HS2 is a real opportunity for British steel to shine. The next phase of HS2 should bring jobs and investment to the parts of Britain that need them most.”

The TUC has signed a framework agreement to guarantee high employment standards and to “maximise the potential benefits of HS2 to the UK supply chain”.

Grayling is expected to confirm changes to the final route for the Y-shaped second phase, including alterations to the original proposed route around Sheffield.

Plans for a dedicated HS2 station at the city’s Meadowhall shopping centre were opposed by city councillors, and it is expected that the line will follow the M18, with a slow rail spur into the city centre – despite the objections of concerned residents and local MPs, including Ed Miliband.

Critics have warned this will mean homes on the new Shimmer housing estate in nearby Mexborough being bulldozed. Some residents found out about the HS2 plans just weeks after moving into the development of two- and three-storey townhouses.

Grayling will also publish a bill to prioritise phase 2a of HS2, which involves speeding up construction work between Birmingham and Crewe.

Opponents of the high-speed rail scheme claim the government is drastically underestimating the true cost, and that construction has already been delayed. The overall budget was revised up to £55.7bn, but estimates drawn up earlier this year on behalf of Lord Berkeley, chairman of the Rail Freight Group, who had argued at select committees for alternative routes for HS2 out of London, suggested it could be as high as £111bn.

Grayling told BBC Radio 4’s Today programme that HS2 would be “on time, on budget” and insisted the government had “a clear idea of what it will cost”.

He rejected a Sunday Times report that it would be the most expensive railway in the world with a total cost of more than £100bn, according to calculations by Michael Byng, a quantity surveyor. Grayling dismissed the figure as “nonsense”.

Asked about the decision to spend on infrastructure while there is a 1% cap on public sector pay, Grayling said: “That’s a very different issue because we are talking about capital investment over the next 15 years. We are not talking about current spending that the chancellor will decide on come the budget.”

Carillion’s joint venture with French construction company Eiffage and UK firm Kier has won two contracts worth £1.4bn to design and build the North Portal Chiltern tunnels to Brackley and the Brackley to Long Itchington Wood Green tunnel South Portal.

The troubled construction company’s share price crashed 70% last week after it issued a profit warning and announced the departure of its chief executive. However, Carillion shares were up more than 15% on Monday after the HS2 contract win. The firm announced it had appointed accountancy firm EY to support a strategic review of the business.

Balfour Beatty’s joint venture with French firm Vinci has won two contracts worth £2.5bn. They will design and build the Long Itchington Wood Green tunnel to the Delta Junction/Birmingham Spur and the section from the Delta Junction to the west coast main line near Lichfield in Staffordshire. Vinci has been involved in the high-speed Tours-Bordeaux rail project in France.

The Balfour Beatty chief executive, Leo Quinn, described HS2 as a “generational engineering project”.

A joint venture between Sweden-based Skanska, Austria’s Strabag and UK firm Costain, which has worked on Crossrail and the Channel tunnel, won contracts worth nearly £2bn.

Other companies to have won HS2 work are French construction group Bouygues and UK firms Sir Robert McAlpine and VolkerFitzpatrick. Their venture was awarded a £965m contract.

HS2 phase 1 construction contracts

Area South

S1: Euston tunnels and approaches – SCS JV (Skanska Construction UK, Costain, Strabag)

S2: Northolt tunnels – SCS JV (Skanska Construction UK, Costain, Strabag)

Area Central

C1: Chiltern tunnels and Colne Valley viaduct – Align JV (Bouygues Travaux Publics, VolkerFitzpatrick, Sir Robert McAlpine)

C2: North Portal Chiltern tunnels to Brackley – CEK JV (Carillion Construction, Eiffage Génie Civil, Kier Infrastructure and Overseas)

C3: Brackley to South Portal of Long Itchington Wood Green tunnel – CEK JV (Carillion Construction, Eiffage Génie Civil, Kier Infrastructure and Overseas)

Area North

N1: Long Itchington Wood Green tunnel to Delta Junction and Birmingham Spur – BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement)

N2: Delta Junction to WCML Tie-In – BBV JV (Balfour Beatty Group, Vinci Construction Grands Projets, Vinci Construction UK, Vinci Construction Terrassement)

By Julia Kollewe and Gwyn Topham

Centrica merges with Bayerngas to create new oil and gas joint venture

( via — Mon, 17 July 2017) London, UK —

LONDON (Reuters) – Centrica has agreed with Bayerngas Norge to merge the companies' North Sea assets, creating the region's largest non-major oil and gas producer and allowing Centrica access to younger fields and to lower its decommissioning liabilities.

The joint venture, to be led by Centrica's head of exploration and production (E&P), will produce 50-55 million barrels this year and have access to 625 million barrels of proved and probable oil and gas reserves.

Centrica will own 69 percent of the new entity and raise its interests in younger fields, including the Cygnus gas field which started producing in December, as well as dilute its decommissioning costs and reduce its capital expenditure needs.

Bayerngas Norge, in return, gets access to a profitable business, further expertise and a bigger balance sheet.

“This joint venture creates a larger, more sustainable and more capable European E&P business,” Centrica Chief Executive Iain Conn said in a statement.

The British utility has been trying to reduce reliance on its oil and gas business following its decision to focus more on providing services in the energy retail market.

“There is potential for an IPO (initial public offering) of the newly created business which will continue Centrica's journey towards a downstream customer-focused energy and services provider,” analysts at RBC Capital Markets wrote, adding that the news was positive for Centrica shareholders.

Shares in Centrica were trading up 0.5 percent at 1008 GMT.

The deal comes a year after British oil major BP agreed to merge its Norwegian oil and gas business in a $1.3 billion deal with Norway's Det norske.

A three-year drop in oil prices has led companies producing oil and gas in the costly North Sea region to find new ways to squeeze value out of their businesses, often by selling assets or joining up operations.

As part of Monday's deal, Centrica agreed to make a series of deferred payments totaling 340 million pounds ($444 million) between 2017 and 2022 for dismantling some of its oldest fields.

Stadwerke Muenchen and Bayerngas, owners of unlisted Bayerngas Norge, will own 31 percent of the joint venture.

Bayerngas Norge was loss-making last year, while Centrica's European E&P business made a 223 million pound profit before tax.

The JV is expected to invest about 80 percent of its operating cash flow, after tax, to maintain production, resulting in investments of 400-600 million pounds a year, Centrica said.

Centrica expects to buy and market all production from the JV's assets.

By Karolin Schaps and Sanjeeban Sarkar

Elise Mitchell: Courage Is The Key To Entrepreneurship


Elise Mitchell, CEO of Mitchell Communications Group talks about self-funding her business! She also talks about taking that courageous first step to starting her own business and how her employer at the time, ended up being her first client! Elise says, “the funny thing about entrepreneurship is you never know when that first opportunity is going to arise. You have to be willing to take a chance when it comes.”

Royal Mail offer employees new pension plan after union opposition


( via — Fri, 14 July 2017) London, UK —

Britain's Royal Mail (RMG.L) said on Friday it would offer employees a choice between a defined benefit or contribution pension scheme, after opposition from trade unions including the threat of possible strike action.

Royal Mail, the postal service privatised in 2013, said in April it would close its defined benefit pension scheme at the end of March 2018, after a review found it would need to more than double annual contributions to over 1 billion pounds to keep the plan running.

It said it expected the overall cost of the new pension scheme proposal to be funded within its current 400 million pounds annual pension contribution.

“Royal Mail believes that the risk to the company of the proposed Defined Benefit cash balance scheme would be materially lower than under the current Plan and is a manageable risk for us,” it said.

Royal Mail said it held extensive talks with its unions, Unite/CMA and the Communications Workers Union (CWU), on a sustainable and affordable solution for retirement benefits.

The CWU has opposed Royal Mail's move to close the scheme and saying it would result in employees in the plan losing on average up to a third of their future pensions.

Around 90,000 Royal Mail workers are in the scheme, whose closure to new members in 2008 resulted in about 40,000 workers joining a less generous defined contribution plan.

Royal Mail one of only a few major companies to still have staff in a defined benefit scheme, a type of pension that pays out according to workers' final salary and length of service.

British companies are facing increasing costs to fund pensions as people live longer and investment returns on bonds have fallen and are expected to remain low.

By Noor Zainab Hussain

Visa contemplates cashless scheme for UK businesses


( via – – Fri, 14 July 2017) London, Uk – –

Visa has said it is considering offering incentives to UK businesses to go cashless, after introducing a similar scheme in the US.

The payments company is selecting 50 small companies in the US to receive $10,000 if they only use cards.

The companies have to bid for the money by explaining how going cashless would affect them, their staff and customers.

However, the idea has been criticised by consumer groups, who say cash is still vital for many people.

“It is easy to categorise it as a bribe, but ultimately they are incentivising companies to do away with cash, and that's not the job of people like Visa,” said James Daley of consumer group Fairer Finance.

In any case, the offer could be of limited appeal to many retailers, who have to pay fees every time a customer uses a debit or credit card.

Even though interchange fees, as they are called, have been capped by the EU, retailers still pay an average of 16p on each credit card transaction and 5.5p on each debit card.

In total UK retailers still paid £800m in such fees last year, charges that have been criticised by the British Retail Consortium (BRC).

Vulnerable customers
Cards have already overtaken cash for retail payments, according to figures for last year from the BRC.

But banks and card companies should not be driving that move, Mr Daley said.

“In 50 years it seems unlikely that most of us will be using cash. But banks need to let evolution follow its natural course, rather than accelerating it,” he told the BBC.

“As a responsible society, we need to look after vulnerable customers who rely on cash.”

Last month Victoria Cleland, the Bank of England's chief cashier, said that 2.7 million people in the UK rely almost entirely on cash – that's 5% of adults.

In a statement, Visa said that following the launch of the scheme in the US, “we hope to bring similar cashless initiatives to other countries, including the UK”.

“At this time, we do not have a firm plan on when such an initiative would be available in the UK.”

In June this year, Visa chief executive Al Kelly told investors that the company was “focused on putting cash out of business”.

“The number one growth lever [for the company] is the conversion of cheque and cash to digital and electronic payments.”


RBS to settle crisis-era mortgage bond claims with £4.2b payout

Royal Bank of Scotland

( via – – Thu, 13 July 2017) London, Uk – –

Royal Bank of Scotland is to pay £4.2bn to settle claims it mis-sold billions of dollars-worth of toxic mortgage-backed bonds to Fannie Mae and Freddie Mac in the run-up to the financial crisis.

In a long-awaited deal that helps RBS move on from its troubled past, the lender agreed to pay $5.5bn (£4.2bn) to the Federal Housing Finance Agency (FHFA), which took control of Fannie Mae and Freddie Mac in 2008, over the $32bn of residential mortgage-backed securities (RMBS) the bank sold to the pair between 2005 and 2007.

Ross McEwan, the loss-making lender’s chief executive, said settling the lawsuit was “a stark reminder of what happened to RBS in its past when it put its global ambitions ahead of the interests of its customers”.

He added: “This bank and British taxpayers have paid a very high price for these poor decisions.”

Before the 2008 banking crisis, RBS was one of the largest lenders in the world with a substantial investment banking business.

As part of its expansion, it became the biggest non-American issuer into the US market of RMBS. These were complex securities backed by cash flows from mortgages that Fannie Mae and Freddie Mac bought and which contributed to the failure of the two American mortgage giants when the housing market collapsed.

RBS itself was forced into a near-£46bn government bailout at the peak of the crisis and is still 71pc-owned by the state. Mr McEwan, who took the helm almost four years ago, closed down the subsidiary that sold RMBS in 2015.

Shares in RBS rose as much 3.5pc following the disclosure of the settlement, reflecting investor relief the bank had put one of its so-called legacy issues behind it, before closing down 2pc at 251.5p.

Some £581m will be reimbursed to RBS because of indemnification agreements it has agreed with other parties, meaning the overall cost of the FHFA settlement to the bank will fall to £3.65bn.

“It’s never a great experience for a CEO to be effectively writing such a large cheque,” Mr McEwan said.

RBS, which has been locked in talks with the FHFA for months, had previously set aside £3.6bn to cover a settlement with the agency.

Ewen Stevenson, RBS’s finance chief, conceded the final agreement was “marginally higher” than had been expected and, as a result, it will take a further £151m charge in its second quarter results next month.

RBS is one of 17 firms that have now resolved claims brought by FHFA over RMBS and its settlement is the second biggest secured by the agency behind the $9.3bn extracted from Bank of America three years ago. The FHFA filed 18 lawsuits over mortgage bonds in 2011.

Resolving the litigation puts RBS a step closer to restarting dividend payments that were scrapped after its bailout, although it still has other hurdles to overcome.

It must settle claims from the US Department of Justice (DoJ) that it mis-sold RMBS but, because of the change-over to the Trump administration, is no closer to resolving that issue, RBS said today.

It has set aside about £3bn for its outstanding RMBS-related litigation, the bulk of which relates to an eventual DoJ deal, although Mr Stevenson said RBS had been “very open” that it could make “material” additional provisions to cover the final settlement with the US.

Before paying dividends, the bank must also agree with the EU an alternative plan to a troublesome sale of its Williams & Glyn business, which Brussels demanded to meet state aid rules following its bailout. It also has to generate its first profit since the crisis, which it expects next year, and pass a Bank of England stress test.

Still, analysts at Bernstein said the FHFA settlement “removes a significant obstacle that was previously blocking the resumption of dividends”.

RBS slumped to a £7bn loss in 2016, its ninth consecutive year in the red.

By Ben Martin