BUSINESS WITH PERSONALITY LOCKDOWN MORE BACK TO THE FUTURE IS VIRUS CASES IN THE FLIP PHONE SET TO EUROPE TAKE MAKE A COMEBACK? P21 THEIR TOLL P5 THURSDAY 27 FEBRUARY 2020 ISSUE 3,564 CITYAM.COM FREE UP, UP AND AWAY? Heathrow TRIO HIT BY bosses await High Court ruling JOB LOSSES DIGITAL SHIFT CAUSES CULL AT HOUSEHOLD NAMES WITH ROLES ON HIGH STREET BEARING THE BRUNT HARRY ROBERTSON roles across our branch network.” City A.M. understands Lloyds does @harrygrobertson not plan to close any branches. LLOYDS Bank, Virgin Money and Virgin Money, however, will close 22 insurer Direct Line all wielded the axe 800 branches this year and “consolidate” yesterday, announcing more than 30 more into another Clydesdale 2,000 job cuts as they scramble to Bank, Yorkshire Bank or Virgin Money respond to customers’ increasingly location within a half mile. It merged digital tastes. with CYBG in a £1.7bn deal in 2018. Banking giant Lloyds said it planned 780 Lucy Dimes, group business trans- to slash 780 jobs across its branches in formation officer at Virgin Money, response to falling demand for high- said: “As our customers change the street banking. way they want to bank with us, we are Lower appetite for in-person services evolving the role of our stores — in- STEFAN BOSCIA was given leave to appeal, which was also lay behind challenger bank vesting in all of the ways that cus- AND EDWARD THICKNESSE heard in October. Virgin Money’s plans to cut 500 jobs 500 Today’s appeal verdict comes as tomers are choosing to bank with us.” and shutter 52 branches. The move reported a 26 per cent fall in annual Insurers have also been hit by chang- @Stefan_Boscia @edthicknesse Heathrow announced yesterday it comes as it continues to integrate profit, reflecting a hit from billions of ing consumer habits. Direct Line boss THE COURT of Appeal will deliver a had recorded its ninth consecutive with Clydesdale and Yorkshire Bank- pounds of payment protection insur- Penny James said last year that her verdict on Sadiq Khan’s challenge to a year of passenger growth. ing Group (CYBG). ance compensation. Lloyds received firm was seeking to cut costs by third Heathrow runway today. The airport received an extra £856m Direct Line said it intends to cut 800 the biggest hit of any British bank £60m. The job reductions announced Khan teamed up with several local in investment in 2019, but said that jobs in a drive to reduce costs. “People from the scandal. yesterday are part of that plan. councils, environmental groups and there was £14bn more waiting in the are increasingly opting to interact The lender has gotten rid of about It isn’t just British outlets that are Heathrow Hub — the authors of a wings from private investors if the with us digitally,” a spokesperson 5,000 jobs over the last two years and being hit hard by the move towards rival extension bid — to challenge the expansion got the go-ahead. from the firm said. now employs roughly 63,000 people. digital banking and services. In Department for Transport’s (DfT) Heathrow boss John Holland-Kaye Banks in Britain and around the Cutting jobs has become a trend Germany Commerzbank announced 2018 policy statement backing the weighed in ahead of the ruling, saying world have come under increasing among banks in 2020. HSBC last week plans to cut 2,300 jobs at the end of project. Parliament gave the nod to Boris Johnson risks “walking naked” pressure from digital competitors and announced a radical overhaul which last year, while Italian giant Unicredit Heathrow’s plan by backing DfT’s into post-Brexit trade negotiations if low interest rates, which hold down will cut 35,000 jobs across the group. has planned some 8,000 job cuts and statement in 2018, voting 415–119 . he does not back the runway plans. profit margins. A Lloyds spokesperson said: “As cus- the closures of 500 branches. Khan’s subsequent court challenge Lloyds’ announcement of new job tomers are using our branches less was unsuccessful, however the group £ CONTINUES ON P7 cuts comes just a week after it often, we are reducing the number of £ METRO BANK UNDER FIRE: P2 FTSE 100▲ 7,042.47 +24.59 FTSE 250▼ 20,622.95 -93.02 DOW▼26,957.59 -123.77 NASDAQ▲ 2,980.77 +15.16 £/$▼ 1.293 -0.007 £/€▼ 1.187 -0.009 €/$▲ 1.089 +0.002 02 NEWS THURSDAY 27 FEBRUARY 2020 CITYAM.COM IN NEED OF A GOLDEN TOUCH Aston Martin results out today INVESTORS are hoping for some sign of a recovery at Aston Martin when the luxury car maker reports its THE CITY VIEW fourth-quarter results today. Aston Martin, the car of choice for James Bonds over the years, has had a bad year so far. It issued a profit warning in January, citing “challenging trading Metro Bank needs to conditions”. In its last statement, the car maker said it expected wholesale shipments to be below previous guidance of 7,100. But since then, the start moving forward coronavirus outbreak has sparked fears that car supply chains could be badly disrupted. Y PRETTY much any conceivable metric, Metro Bank has had a miserable recent history. A major accounting Bblunder disclosed at the start of 2019 has sparked two regulatory investigations, led to the departure of its chairman and chief executive, and wiped almost 90 per cent off the lender’s market cap. Unsurprisingly after all that, yesterday’s annual results — featuring an £131m loss, eight per cent slump in deposits, and cuts to its expansion plans — made for pretty grim reading. Shares slumped to an all-time low. But the famously dog- friendly challenger bank’s problems run even deeper than this series of calamities: it isn’t challenging the incumbents in the right place. Metro Bank was founded to revolutionise high street banking, taking on the Big Four lenders with improved customer service and longer opening hours. But, thanks to the well- documented collapse in footfall and stiff online competition, the high street it set out to shake up Metro to hand back cash no longer exists. Instead, incumbents and high street The dog-friendly challengers alike are battling to make a profit amid squeezed challenger isn’t margins and years of low challenging the as US class action looms interest rates. Just a few hours Big Four in the after the release of Metro ANNA MENIN federal securities laws arising from al- plans after plunging to a £131m pre- Bank’s results, Lloyds said it will right place @annamenin legedly false and misleading state- tax loss in 2019, a devastating year in cut 780 job across its UK ments in relation to its loan book”. which an accounting scandal sent branches, blaming declining demand for high street banking, and ON THE same day Metro Bank posted The lender said it intends to “vigor- shares plunging and led to an exodus Virgin Money announced the loss of 22 branches and 500 jobs. a £130m loss it yesterday admitted it ously defend” the proceedings, which of the bank’s top brass. will have to return £50m of the are at an early stage, and it was not Metro Bank booked a £130.8m pre- While both Lloyds and Metro Bank have ruled out branch closures £120m it was controversially awarded yet possible to estimate their likely tax loss, compared to a profit before for now, the latter will dramatically cut the pace of new openings, last year by the Banking Competition financial impact on the company. tax of £40.6m in 2018. That meant in- and both lenders are ultimately heading in the same direction. Remedies’ (BCR) Capability & Innova- Earlier this month, it emerged that vestors took a loss per share of 123.9p, tion Fund, after revising down some Metro Bank had launched a major re- compared to 2018’s 29.1p earnings per Now, the industry’s fiercest challengers are nimbler digital-only ambitious growth targets. view of its compliance controls after share. Deposits fell by eight per cent competitors, who can offer technological innovation and better The lender is now planning to open handling money from Iran and Cuba, to £14.48bn in the period, as business user interfaces than their more established counterparts. Digital a total of 15 rather than 30 branches in breach of strict US and EU sanc- clients withdrew cash after the ac- banks operating in the UK almost trebled their customer base in in the north of England by 2025. tions. The lender said it was not yet counting error. The challenger bank used its full “practicable to identify the likely out- Shares in the bank fell as much as 19 2019, edging towards 20m global users. While many fintechs year results day to disclose that it is come or estimate the potential finan- per cent to an all-time low of 155p, come with their own profitability challenges, the success of firms facing a class action in the US, which cial impact of these matters”. but pared back most of the losses to like Revolut — which this week became the joint most valuable it said was “based on breaches of US Metro Bank will slash its growth end the day 3.1 per cent down at 186p. fintech startup in Europe, with a new $5.5bn valuation — shows A METROSPECTIVE OF MISTAKES that online competition isn’t easing off any time soon. Analysts now suggest Metro Bank may have to sell off part or all of its March 2010 January 2019 September 2019 October 2019 December 2019 February 2020 business to secure its future, but chief exec Dan Frumkin insisted Metro Bank is first Admits under- Metro Bank Co-founder Chief exec Craig Frumkin made lender to get a reporting exposure forced to pull a Vernon Hill Donaldson quits.