HSBC and Scotiabank fined over off-channel comms use
The Securities and Exchange Commission fined the Bank of Nova Scotia and HSBC on Thursday over their employees' use of messaging applications that violated record-keeping rules. HSBC Securities and Scotia Capital will pay penalties of $15m and $7.5m, respectively, to resolve claims that their employees communicated “off-channel” about securities business matters using their personal devices and messaging platforms, including WhatsApp. HSBC and Scotiabank are the latest Wall Street companies to face penalties for employees' use of personal devices and messaging apps since regulators launched a broad probe into use of such platforms in 2021.
Revolut finance boss quits 'for personal reasons'
Revolut's chief finance officer is leaving for personal reasons, the fintech said on Thursday. Mikko Salovaara , said: “I am grateful for the opportunity to serve as group CFO at Revolut and remain confident in the firm's future success.” Chief executive, Nik Storonsky, said: “I thank Mikko for his contribution and wish him well on his next steps.” Revolut is due to find out within weeks whether or not UK regulators will grant it a banking licence.
3i staff to get £200m from Action success
Private equity group 3i is to share £200m between 80 current and former employees this month as they reap the spoils of the firm's bet on the Dutch-based discount retailer Action. Simon Borrows, 3i chief executive, said it was the first carried interest payment resulting from Action since 2020 and was "probably the largest to date".
SoftBank posts $7.18bn loss
SoftBank Group reported an annual net loss of 970bn yen ($7.18bn) for the year to the end of March with the falling value of its technology investments dragging the investment company down.
Blackstone in talks with US regional banks over lending partnerships
Blackstone is in talks with regional banks in the US about forming partnerships that would see lenders originating loans that the private equity group can funnel to its insurance customers.
JPMorgan boss calls for SEC probe into bets against bank stocks
Jamie Dimon, the CEO of JPMorgan, has backed calls for a probe into investors short selling on bank stocks and potentially colluding via social media posts. “The SEC has the enforcement capability to look at what people are doing by name in options, derivatives, short sales,” said Dimon in an interview with Bloomberg Television on Thursday, echoing a recent call from the American Bankers Association. Dimon also warned that if the US got too close to defaulting to its debt it could trigger market panic. “It’s very unfortunate, it’s time-consuming, hopefully it won’t happen, but it affects contracts, collateral, clearing houses, clients.” Meanwhile, the Federal Deposit Insurance Corporation is proposing that the biggest US banks should pay about $16bn in extra fees to cover its losses associated with rescuing Silicon Valley Bank and Signature Bank in March.
BNP Paribas stops financing new oil and gas fields
BNP Paribas has announced that it will no longer provide any financing dedicated to new oil and gas fields. France's largest bank is targeting a 80% cut of its oil exploration financing by 2030. French rivals Société Générale and Credit Agricole have also reduced their risk appetite for fossil fuel projects.
UK asset managers in talks to create multi-billion pound investment fund for start-ups
UK asset managers are in advanced talks to create a multi-billion pound investment fund to back UK start-ups and stem the flow of technology firms snubbing London for New York. The planned 'Future Growth Fund' would aim to draw up to £50bn from British pension pots to invest in fast-growing technology and biotech firms. The fund would act as a giant UK-focused venture capital fund, specialising in backing unlisted start-ups before they hit public markets. The planned fund could be supported by a government mandate for all UK defined contribution pension funds to invest a proportion of their funds in the vehicle. Lord Mayor of London, Nicholas Lyons, has made consolidating pension fund investment in Britain a key focus of his role. Lyons also backed industry calls for higher pay for top executives in Britain, to better compete with the United States and senior roles in sectors such as private equity.
US risks falling behind Europe without crypto rules, warns SEC commissioner
A senior Republican member of the Securities and Exchange Commission has said the US will be “shooting itself in the foot” if it doesn’t set out a regulatory regime for crypto assets. The SEC Commissioner Hester Peirce told the Financial Times’ crypto and digital assets summit that frameworks set out by the EU and the UK could “serve as a model for us.”
GSK to sell 2.5% stake in Haleon
GlaxoSmithKline (GSK) has announced its intention to sell up to 240m shares in Haleon, representing 2.5% of the consumer healthcare group's issued share capital. GSK, the second largest shareholder of London-listed Haleon, will sell the stake via a placing of ordinary shares. The offer price will be determined through an accelerated bookbuild offering process, which will commence immediately.
Babylon shareholders wiped out in restructuring deal
British healthcare start-up Babylon is set to be taken over by its main lender AlbaCore after a disastrous performance since its New York listing in October 2021. All shareholders will be wiped out.
LEISURE & HOSPITALITY
Key investor backs TRG chief
Columbia Threadneedle has announced its backing for Andy Hornby, the CEO of Wagamama's parent company The Restaurant Group (TRG). Mr Hornby has spent recent months facing down activist investor Oasis Capital Management which has been critical of the company's low share price and how it has struggled to recover following the pandemic, as well as its executive pay policy. A spokesman for Columbia Threadneedle said: "As a long-term shareholder in The Restaurant Group, we remain supportive of TRG's board and management team, who have successfully navigated the exceptionally tough industry backdrop. The board continues to receive our support as they assess the best options to deliver long-term shareholder value."
MEDIA & ENTERTAINMENT
S4 Capital Boosted by AI Efficiency
S4 Capital, founded by advertising veteran Martin Sorrell, has reiterated its full-year net revenue outlook after a first quarter boosted by US demand, which offset a weaker performance in Europe, the Middle East and Africa. Sorrell said that AI is helping his business become more efficient and navigate client pressure to cut costs. S4 is using AI to speed up copy-writing, produce more personalised adverts and place them on platforms most likely to be seen by the right consumers. The group has set a 2023 target of growing like-for-like net revenue by between 8 and 12%.
Disney+ loses 4m subscribers
Disney+ lost 4m subscribers in Q1 2021, with most losses coming from its Hotstar service in Asia, which lost streaming rights to Indian cricket matches last year. The platform also lost around 300,000 customers in the US and Canada after raising subscription prices. However, Disney+ narrowed its losses by $400m and reduced its operating losses to $659m for the first three months of the year. Disney CEO Bob Iger said the improved financial performance reflects "the strategic changes we've been making throughout the company to realign Disney for sustained growth and success."
Bluestar Group drops Home REIT bid
Bluestar Group has announced that it will not be bidding for Home REIT after the UK housing provider's board refused to extend its May 11 deadline for the investment company to make a firm offer. Home REIT received an unsolicited takeover approach from Bluestar in February, months after being rocked by a report from short-seller Viceroy that raised several concerns including the valuation of the company's assets.
Bank of England raises interest rates to 4.5%
The Bank of England has raised its key interest rate by a quarter of a percentage point to 4.5%, marking its 12th consecutive rate rise. The BoE revised up its growth forecasts from gloomy numbers released in February, but it also now expects inflation to be slower to fall than it had hoped, mostly due to unexpectedly big and persistent rises in food prices. The BoE predicts inflation will not return to its 2% target until early 2025. Consumer price inflation is predicted by the central bank to fall from the current level of 10.1% to 5.1% in the fourth quarter of 2023, instead of its previous forecast of 3.9%. “We have to stay the course to ensure inflation falls all the way back to our target,” said BoE governor Andrew Bailey. “We expect inflation to fall quickly this year.”