BANKING
Barclays results boosted by investment bank
Shares in Barclays were down more than 3% in early trading on Thursday as the bank reported that pre-tax profits for the year jumped 25% to £4.4bn. Pre-tax profits came in at £6.2bn after stripping out £1.4bn of conduct charges and litigation costs and a key target of delivering a 9% return on equity was also hit but the target of a 10% return on equity for 2020 was revised to say instead that it would be “achieved over time”. A strong performance from the investment banking division drove the rise in profits.
EU increased cartel fines 74% last year
New analysis has revealed that the EU increased fines for cartels by 74% last year to $1.6bn (£1.2bn). In May, the EU Commission hit five banks, Barclays, RBS, Citigroup, JPMorgan and MUFG, with a cumulative €1.07bn (£900m) fine for operating two cartels in the foreign exchange markets. There are two further cases involving secondary market trading in US and European government bonds which are being looked at by the Commission and may result in more large penalties.
Paragon revolt over pay
Nearly 30% of voting shareholders opposed the pay packages handed to top executives at Paragon Banking Group's annual meeting yesterday. The buy-to-let mortgage specialist’s CEO Nigel Terrington received nearly £2.9m in salary, pension, benefits and bonuses in 2019.
Small money service firms used to launder cash
Scotland Yard's specialist crime chief DCS Michael Gallagher has warned that criminal gains are being moved through money service businesses (MSBs) rather than banks, with bureaux de change, money-transfer brokers and payday-loan services specifically identified.
RBS rivals fall short in bailout switch scheme
Royal Bank of Scotland's rivals have only managed to lure 23,000 business customers away from the bank, which is required to offload at least 120,000 as a condition of its government bailout.
INTERNATIONAL
Ousted Thiam claims Credit Suisse turnaround complete
In a bittersweet farewell for Tidjane Thiam, who was ousted as chief executive last week amid the fallout from the scandal over the bank spying on former executives, Credit Suisse has posted its highest annual profits in almost a decade. Pre-tax profit rose 40% to 4.7bn Swiss francs (£3.7bn) for 2019, while net income attributable to shareholders exceeded expectations, rising 69% to 3.4bn Swiss francs over the year, above analyst forecasts of 3.2bn Swiss francs. Net revenues hit 22.4bn Swiss francs, up from 20.9bn Swiss francs in 2018, while the group reached a cost/income ratio of 77.6%, its best since 2010. "I am proud of what Credit Suisse has achieved during my tenure," Thiam said, asserting: "We have turned Credit Suisse around."
Wall Street is trying to catch up on climate change
US banks are cracking under pressure from climate activists to adopt a policy on fossil fuels, with JPMorgan, Goldman Sachs and MetLife yesterday backing an initiative from the Climate Leadership Council.
Commerzbank vows to look ‘everywhere’ for new cost cuts
Commerzbank’s incoming CFO, Bettina Orlopp, has vowed to “look everywhere” for fresh cost cuts. Her promise follows news an ECB official warned the bank in December over its high costs.
Norway bank chief warns on politicising wealth fund
Oystein Olsen, the governor of Norway’s central bank, has warned against using the country’s sovereign wealth fund to promote political objectives.
AUTOMOTIVE
Ghosn saga drags on Nissan
The fallout of the Carlos Ghosn saga has taken Nissan to a quarterly loss. Declines in Japan, Europe, China and the US, dragged sales for the three months to December down almost 18% to 2.5tn yen (£17.7bn), resulting in a 26bn yen loss for the Japanese carmaker. Nissan revised down its annual sales forecast by 4% to 5.05m vehicles, although that does not account for the outbreak of coronavirus.
Tesla launches $2bn offering amid SEC probe
Tesla has announced a surprise $2bn (£1.5bn) stock offering to take advantage of its surging share price saying it planned to use the cash to "further strengthen its balance sheet, as well as for general corporate purposes". The electric car company also revealed the SEC had issued a subpoena for "information concerning certain financial data and contracts including Tesla's regular financing arrangements".
AVIATION
Turbulence takes its toll on Airbus
Airbus fell to a €1.36bn loss in 2019, compared to a profit of over €3bn the year prior, down to provisions for a $4bn settlement of its bribery case and a €1.2bn charge against its military aircraft programme.
CONSTRUCTION
MJ Gleeson puts in strong homes performance
Urban housing regeneration firm MJ Gleeson built an operating profit of £15.9m in its homes division during the first half of the year 2019/20, up 13% from £14m in the comparable six month period. The unit saw completions up 17.4% to 811 units.
FINANCIAL SERVICES
UK business boosts Zurich Insurance
Zurich UK earnings were up 59% to £413m from £260m in 2018, significantly boosting Zurich Insurance Group. Zurich UK’s life and savings profit grew 15%. Zurich Insurance Group posted a 16% rise in business operating profit to $5.3bn, while net profit rose 12% to its highest level since 2010. In its general insurance business, business operating profit grew 97% to £271m, while gross written premium increased 4% to £2.5bn, supported by growth in new business and retention.
ASI braced for stampede on Woodford fund reopening
Managers at Aberdeen Standard Investments (ASI) reopened Neil Woodford's Income Focus fund yesterday saying they were prepared for mass withdrawals having re-invested in larger stocks which could be sold in a hurry. Thomas Moore and Charles Luke added: “With its repositioning now substantially complete, the portfolio is, we believe, now strongly positioned to provide attractive total returns.”
Skeoch to lead Investment Association
Keith Skeoch, the chief executive of Standard Life Aberdeen, has been named as board chairman of the Investment Association. Michelle Scrimgeour, boss of Legal & General Investment Management, and Patrick Thomson, EMEA head at JP Morgan Asset Management, have been named as deputy chairmen.
UK university pension fund shutters stockpicking team
The Universities Superannuation Scheme has sacked the entire developed-market equities team working at its investment arm USS Investment Management for strategic reasons, despite its robust performance.
AIG’s outlook and revamped cost-saving plan fail to impress
US insurer AIG suffered a 3.6% fall in its share price yesterday after investors were left unimpressed by the group’s outlook for 2020 and revisions to projections regarding its efficiency improvement programme.
HEALTHCARE
Indivior swings to loss
Shares in drugmaker Indivior fell almost 20% yesterday after the firm booked a $42m (£32.4m) loss for the last three months of the year, down from a £20m profit in the same period last year. Revenue for the period fell 44% year-on-year, from $236m to $133m this year, taking profit for the whole year down 39% to $178m, from $292m last year. Whole year revenue fell 22% to $785m.
Downgrade sends NMC shares tumbling
Shares in NMC Health fell as much as 11% on Thursday after Société Générale slashed the hospital operator’s price target by 85%. The bank’s analysts called for “a board reset and a full audit” to restore investor confidence.
LEISURE & HOSPITALITY
Coronavirus present risks for Relx
Despite a strong financial performance, the coronavirus outbreak could negatively impact publishing and exhibitions giant Relx's business in China this year. The firm, which cashed out £416m on 14 takeovers during the year, to bolster its content, data analytics and exhibitions divisions, reported revenue of £7.9bn for the year to the end of December, up 4% on an underlying basis, while profit before tax rose 3% to £2.2bn.
MANUFACTURING
JCB factories cut hours due to coronavirus shortages
Anticipated component shortages from Chinese suppliers due to the coronavirus have led JCB to cut production. UK factory employees will have their hours cut to a 34-hour week until further notice, the company said.
MEDIA & ENTERTAINMENT
US accuses Huawei of stealing technology from six companies
The US justice department has accused Huawei of racketeering, stealing technology from a string of US companies and of violating sanctions against North Korea. The charges come on top of previous allegations the firm stole technology from T-Mobile and breached sanctions against Iran. The US also reportedly shared intelligence last year with allies including Britain showing Huawei had maintained its own “backdoor” access to mobile networks for over ten years.
Google's Looker Data Sciences buyout approved
The CMA has given the go-ahead for Google’s £2bn buyout of cloud data firm Looker Data Sciences after finding that the deal would not adversely affect quality of service or data analytics tools and software competition..
RETAIL
Intu seeks help with £5bn debt pressure
Intu is feeling the pressure with nearly £5bn debt as commercial property values fall and is reportedly seeking to raise at least £1bn cash on the stock market next month as a result. Shares in the firm have fallen in recent years, to 13.3p from 374p five years ago, valuing it at £180m despite an asset valuation of around £9bn. Alongside its possible rights issue, the firm is selling assets and has axed the final dividend for 2019, with capital spending reduced by £60m.
Westfield pauses Croydon plans
Unibail-Rodamco-Westfield (URW) has confirmed that its plans to build a new mall in Croydon in a joint venture with Hammerson have been put on hold. It came as the group’s latest results show that like-for-like net rental income across the group’s UK shopping centres fell 4.2% in the 2019 financial year.
ECONOMY
Investment plans improve as uncertainty on Brexit falls
With Brexit uncertainty fading following the general election result business investment expectations have risen 4.6% in financial terms in the three months to January, according to a Bank of England-backed survey.
OTHER
Chancellor resigns amid cabinet reshuffle
Sajid Javid shocked Westminster on Thursday by quitting as chancellor in the middle of Boris Johnson's cabinet reshuffle. Mr Javid rejected the prime minister's order to fire his team of aides, saying "no self-respecting minister" could accept such a condition. Mr Javid had been due to deliver his first Budget in four weeks' time and his resignation follows rumours of tensions between his team and Dominic Cummings, Boris Johnson's senior adviser. He has been replaced as chancellor by Chief Secretary to the Treasury Rishi Sunak, MP for Richmond in North Yorkshire, who just seven months ago was a junior housing minister. A former Goldman Sachs banker, Sunak's father-in-law is one of India’s richest men, NR Narayana Murthy, the billionaire co-founder of IT and consulting firm Infosys.