Lloyds plans to prioritise junior staff for pay rises
Lloyds Bank chairman Robin Budenberg said the company plans to prioritise junior staff when reviewing pay packages as they were particularly hard hit by the cost of living crisis. During the bank’s AGM on Thursday, Budenberg was accused by union members of giving employees a pay rise that “doesn't even touch the sides” while paying out £1.4bn to shareholders after raking in £5.9bn in profit. Budenberg responded by saying all awards “are determined by the board's remuneration committee following extremely careful consideration” and that the £399m the bank pays in bonuses is lower than many other major UK banks. He added: “However, we know that as we deliver the next phase of our strategy it's vital that we're able to attract and retain talent and reward our colleagues appropriately. Our bonus awards are directly based on a percentage of our underlying profit.”
MPs want dodgy bosses to go to jail
A group of MPs including Kevin Hollinrake and Dame Margaret Hodge have said bankers and accountants should be held responsible for failings in their checks and balances and go to jail if they fail to prevent economic crime. Dame Margaret said: “It is tragic that it has taken the war in Ukraine to bring the dirty money crisis to a head. We must act in a determined and effective way.” The lawmakers have published a manifesto on economic crime urging the Government to step up the fight against fraud and money laundering. The group praised the Government for pushing ahead with its Economic Crime Bill but urged ministers to strengthen it in the four key areas of transparency, enforcement, accountability and regulation.
HSBC launches $1bn lending fund for female entrepreneurs
HSBC is launching a $1bn lending fund to invest in female-owned businesses over the next 12 months. Sam Cooper-Gray, global head of market strategy at HSBC Business Banking, said: "The level of funding received over time by female-led businesses is significantly lower than male counterparts, while the recent impacts of the pandemic have seen these same businesses disproportionately affected.”
Softbank’s Vision Fund reports $27bn losses
SoftBank has suffered record annual losses of about $27bn in its Vision Fund following a rout in technology shares. Investors braced themselves for the losses, sending shares down 8% before results were released. SoftBank Group reported a total annual net loss of $13.15bn, forcing CEO Masayoshi Son to declare a new approach of financial prudence and selective investing to minimise further losses. “When it comes to new investments, we are being more selective,” he said. “As the world is in chaos, we want to make sure that we have plenty of cash... instead of making new investments randomly.”
Carlyle merges energy and infrastructure units ahead of investment push
Carlyle Group is merging its energy and infrastructure investment operations in preparation for a renewed push into businesses including fossil fuels.
Australia’s big banks eye rate boost
Australia’s Commonwealth Bank on Thursday posted cash earnings of $2.4bn in the three months to March 31, steady from the first two quarters of its fiscal year. With the Reserve Bank this month lifted its cash rate for the first time since 2010, the outlook for net interest margins for the country’s major banks has improved.
Leading pension funds turn attention to emerging market net zero transition
Some of the UK’s top pension funds have been persuaded by the Church of England Pensions Board to draw up a plan to help fuel a net zero transition in emerging economies. The commitment comes amid growing scrutiny of pension investments with schemes scrambling to decarbonise their portfolios and back greener investments. Pensions Minister Guy Opperman welcomed the move today. “I look forward to working closely together to assess how we can further unleash the productive power of UK pensions in support of the climate transition in emerging economies, while also delivering sustainable returns for members,” he said.
Hargreaves Lansdown assets and new business shrinks
Investment platform Hargreaves Lansdown has reported its closing assets under administration fell to £132.3bn at the end of April, from £141.2bn at the end of December last year. It said this was due to “adverse market movement through the period driven partly by exposure to global equity markets, particularly US technology stocks, with the Nasdaq down 21%”. Assets in funds dropped by £6.1bn from the end of December to the end of April, while shares fell £4.5bn and HL funds fell £0.6bn. It also reported net new business of £2.5bn for the four months until the end of April, down from £4.6bn from the previous year.
Tilney S&W reports drops in AUM
Tilney Smith & Williamson has reported a drop in its assets under management at £55.8bn for the three months to the end of March. The wealth manager saw a fall from December 2021 when AUM stood at £57.7bn, albeit it was still up from £51.6bn when compared to the same period last year. Meanwhile, the firm reported net new business inflows of £0.5bn in the first quarter, which was the same as Q1 2021, representing 3.2% of opening assets on an annualised basis. Group operating income in Q1 was up 9.3% on last year at £146.9m, compared to £134.3m.
House price inflation surge shows ‘little’ signs of slowing
House price inflation is unlikely to be quelled any time soon as prices continue to be driven by historically low stock levels. Despite warnings of a recession on the horizon, current property activity continues to be buoyant, according to the latest RICS Residential Market Survey. Its April survey found that the supply of homes on the market and new listings continues to be sparse. “There is little evidence at this stage of house price inflation losing much momentum, while expectations for the coming twelve months have only moderated slightly from recent highs,” RICS economist, Tarrant Parsons, said.
Sales rise at JD Sports
JD Sports has confirmed that like-for-like sales increased 5% in the 14 weeks to May 7. The retailer said that profit before tax and exceptional items was expected to be £940m for the year to January 29. It was forecast to be of a similar size in the current year. However, the company said it remained “conscious of the headwinds that prevail at this time including the general global macro-economic and geopolitical situation.”
UK economy shrinks in March as GDP falls
The UK economy contracted in March, as the cost-of-living crisis hits families and threatens to push the country into recession. New data released by the ONS on Thursday showed that GDP fell by 0.1% in the month, slightly worse than the 0% growth forecast. “It appears as though the economy is dangerously close to a recession,” Paul Dales, chief UK economist at Capital Economics, said. Separately. the head of economics at the British Chamber of Commerce has warned there is a “real chance the UK could be in recession by the third quarter of this year” due to cost pressures and the national insurance rise squeezing consumer spending and business investment.
Business investment declines over first quarter of 2022
Business investment fell 0.5% in the first quarter and was 9.1% below its pre-pandemic level, reflecting high business uncertainty. Investment levels were 8% below that of the first quarter of 2016 before the Brexit referendum, despite a two-year tax break on investment - the Government’s super-deduction policy - which has been in place since April 2021. Sandra Horsfield, economist at Investec, said: “Boosting productivity through higher investment will be a crucial ingredient in containing cost pressures for businesses in light of surging wage bills. So, a further shortfall in this regard is a concerning signal.”