Aviva fined
Watchdog bites
Two units of insurer Aviva have been fined a total of £8.2m by the UK's financial watchdog for failings by an outsourced business they had hired to ringfence client money. The Financial Conduct Authority said on Wednesday that it had fined Aviva Pension Trustees UK and Aviva Wrap UK after it found that as much as £74.4m of client money had been improperly segregated by a third-party Aviva had used, thereby falling short of Client Assets Sourcebook rules, known as CASS. It is the first time the FCA has issued a fine due to improper oversight of an outsourcer around client money rules.
Limbering up
Bank retests
There's no let-up for the UK's banks. While having to deal with record-low interest rates, which is putting pressure on profitability, they are also now having to ready themselves for a revised stress test by the Bank of England. The central bank said its 2017 test would look at two scenarios for the first time. In addition to its usual round of exercises to test banks' balance sheet resilience to an economic downturn, next year's tests will also include an "exploratory scenario" putting lenders under the microscope when faced with "a wider range of potential threats". Barclays, HSBC, Lloyds, Nationwide, RBS, Santander and Standard Chartered will all take part.
New wings
Tui tie-up
There could be a new airline touching down on European soil if a mooted deal between Etihad and Tui gets off the ground. The former, which owns 29 per cent of Germany's second-biggest airline, Air Berlin, is in talks with the London-listed Tui to create a new airline focusing on Germany, Austria and Switzerland. This would be achieved by combining Air Berlin's tourist operations with Tui's German Tuifly aviation arm. Tui, Etihad and Air Berlin intend to finalise an agreement in principle "in due course", although any deal will be subject to the usual regulatory approvals.
Pound push
Translation gains
Sterling's continued weakness following the UK's vote to leave the EU isn't all bad news. It seems it has been spurring the country's manufacturing sector into action with a closely watched survey hitting its highest level since June 2014. Markit's purchasing managers' index (PMI) hit 55.4 in September, far exceeding analyst expectations of 52.1 and leaping the 10-month high of 53.5 in August. Any reading above 50 shows the sector in expansion. Alongside this, a measure of new orders had its second-best rise in two years. The UK construction PMI also entered expansion territory for the first time since May to hit 52.3 from 49.2 in August.
Hole filling
Debt reduction
Mining giant and commodity trader Glencore will repurchase $1.25bn (£979m) of bonds as it continues to chip away at its huge debt pile. The company will buy back bonds maturing in 2018 and 2019, with investors being given until the end of October to tender their notes. The move is being replicated across the sector, with Rio Tinto recently announcing a $3bn bond repurchase scheme. Glencore launched its debt reduction plan a year ago and has sold assets, suspended its dividend and raised $2.5bn from a share placing, all with the aim of cutting net debt to $16.5bn-$17.5bn by the year-end.
Trouble aboard
Southern woes
It's not getting any more comfortable on Southern trains as the company's head-to-head with unions ratcheted up this week. The rail operator said it would terminate conductors' contracts unless its dispute with unions ends this week. The company offered a £2,000 lump sum for conductors who agreed to move to a new role as onboard supervisors - responsibility for closing doors would move to the driver. But the Rail Maritime and Transport Union hit back via a social media campaign which garnered some public backing. Southern is part of the Thameslink franchise held by Govia, a joint venture between Go-Ahead and France's Keolis.
Shifting focus
Paragon deal
With the squeeze on the buy-to-let market from government policy changes, such as the removal of tax reliefs, it's become even more important for Paragon to expand its presence in other areas of lending. The buy-to-let mortgage specialist has bought Premier Asset Finance, a brokerage firm that helps arrange more than £100m of loans to small- and medium-sized businesses. Premier, headquartered in Edinburgh, has been bought for £8.5m in cash. A further £12m is payable over the next five years depending on various performance criteria being met. The deal comes after the acquisition of business finance specialist Five Arrows Leasing last year.
We’re getting older. Office for National Statistics data showed there were roughly 14,570 people over 100 in the UK.
This is only 2.6 per cent of the population aged 90 and over and only 0.02 per cent of the overall UK population. But the number has quadrupled from 3,420 in 1985, risen 65 per cent in the past decade and is expected to quadruple by 2035.
The swelling ranks of centenarians reflects advances in medicine and improvements in nutrition and living conditions, which have boosted life expectancy. But the UK’s healthy life expectancy hasn’t kept pace with the increased total life expectancy, putting a strain on public services.
Aim-traded Totally (TLY) is addressing these challenges through the provision of services to help promote healthy living and has signed a number of contracts with various NHS trusts.
