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Daily News Roundup: Friday, 11th November 2022

Posted: 11th November 2022


Rising rates drive profits surge at Co-op Bank

After more than tripling its profits in the first nine months of year, the Co-operative Bank said it was again in a position to pursue acquisitions. The lender could possibly make another bid for TSB’s branch network, CEO Nick Slape suggested. The Co-op’s pre-tax profit for the period rose 260% year on year, from £29m to £103m, while total income increased 40% to £363m. Mr Slape said the lender had “delivered significant business momentum” and would now ramp up its investment in the business. “This will centre on improving customer experience, upgrading our branch network, and increased funding of our external campaign, giving the Bank a louder voice on matters that mean the most to our customers,” he said.


Crédit Agricole’s revenues disappoint

Crédit Agricole reported €2bn in net profit in the three months to the end of September, down from €2.22bn in the same period last year. Performance was mixed across the business but the bank boasted a strong double-digit rise in revenue at its corporate loans, consumer finance and leasing businesses. Overall, revenues were down 2% on analysts’ forecasts at €5.59bn, sending shares down 5% on Thursday. "Globally we have a lower risk profile than rivals, which means we may profit less from volatility," said the lender’s deputy CEO Xavier Musca.

Spain could widen tax to foreign banks' units

Amendments to the banking tax proposals put forward by Spain's leftist ruling coalition would allow the government to impose levies on the local units of foreign lenders supervised by the European Central Bank regardless of their revenue. The ECB last week warned the original proposal, which excluded smaller Spanish lenders and the units of foreign banks, could damage lenders' capital and distort market competition.

Vontobel to cut costs after large outflows

The Swiss wealth and asset manager Vontobel is to initiate further cost control measures after experiencing outflows of 3.4bn Swiss francs ($3.46bn) in the first nine months of this year. Assets under management declined by 42.5bn francs from the start of the year to 201.2bn as of Sept. 30, it said in a statement.


Sales of pre-owned electric cars hit record high

Figures from the Society of Motor Manufacturers and Traders (SMMT) show sales of second-hand chargeable vehicles sales rose 44.1% to 16,775 in the third quarter - a record high despite overall second hand car sales falling by more than a tenth. A growing proportion of new car sales are also electric, accounting for 15% of purchases last month. Mike Hawes, SMMT chief executive, said: “It’s great to see a growing number of used buyers able to get into an electric car. The demand is clearly there and to feed it we need a buoyant new car market, which means giving buyers confidence to invest.”

New car leasing deals have fallen by 13%

A report by the Finance and Leasing Association reveals the number of new cars bought on finance has fallen by 13% compared with a year ago. Concerns over high inflation and soaring interest rates were putting motorists off leasing contracts, the FLA’s Geraldine Kilkelly said.


Regional airline wins Heathrow slots

Loganair, Britain’s biggest regional airline, has been handed Aeroflot’s lucrative take-off and landing slots at Heathrow, making it the first new British airline to be welcomed by the airport in nearly three decades. Virgin Atlantic was among the other beneficiaries of Aeroflot’s slots being reallocated following sanctions against the Russian flag carrier.


FTX probed over possible criminal activity

Sam Bankman-Fried’s cryptocurrency exchange is being investigated by both the Securities and Exchange Commission and the Department of Justice to determine whether any criminal activity or securities offenses were committed. FTX is scrambling to raise about $9.4bn after speculation about its financial health triggered $6bn of withdrawals in just 72 hours earlier this week. Prior to the liquidity crunch, FTX had loaned $4bn to Mr Bankman-Fried's other crypto business, Alameda Research, with some of the cash reportedly coming from customer funds. Meanwhile, Republican lawmaker Tom Emmer has claimed his office received information indicating SEC chairman Gary Gensler had been helping Bankman-Fried gain a “regulatory monopoly” through the crypto firm. Mr Emmer said his team investigated the SEC chairman’s alleged collaboration with Bankman-Fried and FTX, but only cited reports submitted to his office as evidence without providing details.

Edi Truell’s new venture designed to appeal to pension schemes

Pensions entrepreneur Edi Truell is set to list a new vehicle aimed at attracting illiquid assets held in retirement schemes. Long Term Assets will announce its intention to float on the specialist funds segment of the London Stock Exchange on Friday, according to Sky News. One insider said the company's ability to accept a wide range of private markets assets in exchange for shares was likely to appeal to pension funds seeking to improve the liquidity of their portfolios in the wake of the recent crisis which hit the industry.

Fund managers sound alarm over fragmenting regulation

Fund management executives have complained that the shift away from globalisation is fragmenting regulation is adding complexity to investment decisions and could harm customer outcomes.


Returning office workers boosts Young’s

Simon Dodd, the new chief executive of Young’s, has reported a bounce back in trading in central London and the City after the return of office workers and tourists. The pub operator reported like-for-like sales since the end of September up by 22% and 11.1% respectively, as consumer confidence returned. Mr Dodd said bookings for December were up 54%, while Christmas Day was up 48%.


Elon Musk bans remote work at Twitter, top execs leave

Elon Musk has banned remote working for Twitter staff unless he personally approves it. In an email to workers on Thursday, Musk said that from now on employees will need to be in the office for at least 40 hours per week. He went on to warn that there would be “difficult times ahead” for the company amid the gloomy economic climate. Separately, Twitter’s chief information security officer, Lea Kissner, has left the company along with chief privacy officer, Damien Kieran and Marianne Fogarty, the chief compliance officer. The company’s head of moderation and safety, Yoel Roth, also resigned after Musk held his first all-hands meeting. In response to the departures, the Federal Trade Commission said it was tracking recent developments at the company “with deep concern.” In May, Twitter reached a deal with the FTC after it was caught selling user data to advertisers without permission. The company also recently faced accusations of security and privacy failures from its former head of security, Peiter Zatko.


Amazon to reduce costs as profits fall

Amazon has confirmed it is reducing costs after its rapid expansion during the pandemic amid inflationary pressures and an uncertain economic outlook. Andy Jassy, who took over as chief executive last year, is to reportedly lead a cost-cutting review and is said to be focusing on businesses that haven’t been profitable. It comes after the company’s third-quarter results fell short of Wall Street estimates, with profits falling to $2.9bn in the three months to the end of September, compared with $3.2bn a year ago and projected lower-than-expected net sales for the fourth quarter of between $140bn and $148bn. Analysts were forecasting $155.15bn.


Kwarteng: I warned Liz Truss over radical reforms

Former Chancellor Kwasi Kwarteng warned Liz Truss she was going too fast with her plans for the economy, he told TalkTV, and he told the ex-PM she would survive only three or four weeks if she sacked him. It turned out it was just six days, Mr Kwarteng said. He was dramatically fired by Ms Truss in October, two weeks after their tax-cutting mini-budget sparked turmoil on financial markets. She then ditched almost all of the plan in a bid to stay in power, but announced her resignation a few days later after support from Conservative MPs ebbed away. Mr Kwarteng went on to say Rishi Sunak and the new Chancellor, Jeremy Hunt, should not attempt to blame him and Truss for all the Government’s present problems. “The only thing that they could possibly blame us for is the interest rates and interest rates have come down and the gilt rates have come down. I mean, it wasn’t that the national debt was created by Liz Truss’s 44 days in government.”

Bank of England to begin ‘orderly’ sale of gilts

The Bank of England will embark on a sale of more than £19bn of long-dated government bonds it bought in order to calm a panic in the gilts market. It said it would do so in “a timely but orderly way” from November 29.


Ex- Goldman banker arrested over bribery claims

Former Goldman Sachs banker Asante Berko was arrested in the UK on charges that he orchestrated bribes to Ghanaian officials while employed at the investment bank. Berko has been indicted in a New York court, accused of conspiring with at least two Ghanaian officials in a bribery scheme that benefited Goldman, himself and a Turkish energy company that sought to build a power plant in the African state.

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