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Daily News Roundup: Friday, 11th February 2022

Posted: 11th February 2022

BANKING

BoE governor sees no need for time limit on access to London clearing

Bank of England governor Andrew Bailey has said the EU should allow its banks and fund managers to use UK clearing houses indefinitely. His comments come after Brussels told continental banks they needed to stop using the City to clear trades by 2025. Mr Bailey has previously warned that fragmenting the system will drive up costs for financiers, businesses and households. Mr Bailey told a dinner for lobby group TheCityUK that “there need be no time limit to this equivalence”. He pointed to the UK and EU’s “shared deep commitment to open markets and open financial systems with strong and appropriate regulatory standards and co-operation” that meant the UK regime could be equivalent to the EU’s indefinitely.

PRIVATE EQUITY

Warburg Pincus buys Informa’s pharmaceuticals data business

Informa is to sell its pharmaceuticals data business to US private equity firm Warburg Pincus. The pharma intelligence business provides specialist data for clinical trials, drug development and regulatory compliance and is valued at £1.9bn.

INTERNATIONAL

SocGen quadruples Q4 net income

A rebound in retail banking and equity trading combined with lower pandemic-related charges helped drive an almost four-fold increase in net income for Société Générale in the three months to December, to €1.8bn compared with the same period a year ago. "The group is entering 2022 with confidence," CEO Frederic Oudea said in a statement.

Credit Agricole beats profit target a year early

Credit Agricole exceeded its 2022 profit target a full year ahead of schedule, as higher revenue across different business lines and lower loan costs helped boost fourth quarter results. The lender said it would present a new strategic plan for 2025 on June 22 after underlying net income came in at about €5.4bn ($6.17bn) for 2021, well above its €5bn target for this year.

Credit Suisse sinks to $2bn fourth-quarter loss

Credit Suisse has suffered a SFr2bn ($2.2bn) fourth-quarter loss and warned that 2022 would be a year of transition as CEO Thomas Gottstein strives to deliver a strategy to revive the Zurich-based lender as the bank tries to recover from a series of scandals.

CONSTRUCTION

Redrow optimistic about future profits

Shares in Redrow rose on Thursday after the housebuilder said it expects its annual revenue to climb to as high as £2.4bn by 2024, almost 10% more than it had originally hoped for. High demand and house price inflation were the chief reasons for its more optimistic outlook.

FINANCIAL SERVICES

UK seeks ‘investment big bang’ with Solvency II reform

Ministers are reportedly close to agreeing changes to Solvency II rules with regulators in a move that would allow insurance companies to invest billions more into UK infrastructure. The issue was also brought up by Bank of England governor Andrew Bailey during a speech at a meeting organised by TheCityUK where he said does “not for a moment consider” Solvency II regulation to be suited to the UK: “Why would it be, since it was designed to cover 27 countries? The case for reform is clear.”

Hedge funds and activists threatened with new US disclosure rules

New rules proposed by the Securities and Exchange Commission would require hedge funds and other activist investors to disclose significant investments in US public companies within five days – half the time currently allowed. Disclosure of investments “can have a material impact on a company's share price,” Gensler said in a statement. “It is important that shareholders get that information sooner.”

Brookfield weighs up listing for asset management business

Toronto-based Brookfield Asset Management is looking to spin-off its asset management business in a listing that could value the new firm at $75bn. The move would streamline Brookfield’s structure and separate its $364bn division, which manages assets on behalf of institutional investors, from the $50bn of its directly-owned net assets.

Prudential boss Mike Wells set to retire

Prudential chief executive Mike Wells plans to retire at the end of March after seven years in the role. The firm is currently conducting a search for a group chief executive to be based in Asia, where its financial officers will also be based.

HEALTHCARE

COVID-19 jab helps AstraZeneca to record sales

AstraZeneca delivered record sales last year with revenues rising 38% to $37.4bn. Income from its COVID-19 vaccine came in at nearly $4bn. However, the increased sales failed to offset a surge in costs and the company swung to a £194m loss during the year from a £2.9bn profit in 2020. “We expect next year to exceed the $40bn revenue promised in 2014,” CEO Pascal Soriot said. Greater confidence in future growth has led AstraZeneca to raise its dividend for the first time in a decade. However, analysts at Jefferies warned: “Near term, AstraZeneca remains the leading growth story, but the potentially slower trajectory versus peers from 2026 onwards, given numerous patent cliffs may be overlooked.”

MANUFACTURING

Unilever vows no more M&A talk and gives €3bn back to investors

Unilever delivered better-than-expected full-year results on Thursday reporting its fastest underlying sales growth in nine years. The results were overshadowed by recent anger over Unilever’s failed pursuit of GlaxoSmithKline’s consumer arm and CEO Alan Jope attempted to placate investors with a promise not to “pursue major acquisitions in the foreseeable future and […] conduct a share buyback programme of up to €3bn over the next two years.”

MEDIA & ENTERTAINMENT

Disney results better than forecast

Shares in The Walt Disney Company rose by 6.8% late Wednesday after the entertainment giant reported higher sales and more new subscribers for its streaming service than anticipated. Total revenue rose 34% to $21.8bn during its first quarter while net income jumped from $17m to $1.1bn.

Binance plans to take $200m stake in US business media group Forbes

Cryptocurrency exchange Binance is looking to take a $200m stake in Forbes, which plans to list in New York via a tie-up with SPAC Magnum Opus Acquisition Limited.

REAL ESTATE

German financial regulator probes Adler over its accounting

BaFin is investigating the accounts of real estate group Adler. Outside auditors are in the middle of a review of the company prompted by questions over the valuation of its assets.

RETAIL

Poor pay leaves Asda staff 'forced to use food banks'

Low pay at supermarket Asda has meant a number of staff have been forced to turn to foodbanks and payday lenders to get by, according to the GMB union. Nadine Houghton, GMB National Officer, said: “Asda bosses are forcing retail workers to accept pay well below the industry average….The worst cost of living crisis in decades has seen them forced to use payday lenders and foodbanks while their mental health suffers.”

OTHER

Film-maker wants pension funds forced to align with net zero

Film-maker Richard Curtis, the co-founder of the Make My Money Matter campaigning group, has called on ministers to follow up the UK’s legal commitment to reach net zero emissions by 2050 by making it mandatory for pension schemes to align their portfolios with the target. Although Rishi Sunak, the Chancellor said at Cop26 that large companies would have to disclose their exposure to the risks of the climate crisis by 2025, many campaigners think the mandatory disclosure does not go far enough as there are no penalties for companies investing in high-carbon activities.

Stakeholder capitalism depends on full disclosure from corporate America

Former Blackrock CIO Tariq Fancy advocates a new model of stakeholder capitalism based on mandatory compliance because corporates are talking about “social purpose” while working to extract profits over purpose at every turn.

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