OneSavings and Charter Court confirm merger details
Challenger banks OneSavings Bank and Charter Court have detailed the terms of their £1.6bn merger, along with full-year results for 2018. One Savings chief executive Andy Golding and CFO April Talintyre will retain their roles, while its current shareholders will own around 55% of the combined firm. OneSavings posted increased profits of £183.8m, up from £167.7m in 2017, while its loan book grew 23% to £9bn driven by growth in gross originations. Mr Golding said he was not nervous about agreeing the deal amid the political crisis over Brexit. “If we believe the thesis that together we are stronger, then you have a more resilient business to lean into Brexit headwinds, whatever they may be,” he said. Richard Evans in the Telegraph Questor column recommends holding shares in OneSavings Bank. He points out that there will be no messy new management structure as part of the merger, and the cultures of both banks are similar.
Gadhia appointment pushed back
Jayne-Anne Gadhia, the former boss of Virgin Money, is set to join the Bank of England’s Financial Policy Committee later than originally planned. She left Virgin Money following its takeover by CYBG in October, but agreed to be a paid adviser to CEO David Duffy for the following 18 months. The Treasury said Ms Gadhia will now join the FPC in April 2020 rather than next month to safeguard against any “conflicts arising from her continuing role with CYBG” and to “ensure she does not have to recuse herself from significant parts of the FPC's work.” Martin Taylor, the former Barclays chief executive, will stay on the committee for an extra year.
Irish lender increases UK profits
The Bank of Ireland’s UK arm reported pre-tax profits of £173m in 2018 up from £151m the previous year, as it focused on cost control and new lending. Lending through its Post Office partnership, in which it offers services at 11,000 branches, grew 130% to £300m. CEO Des Crowley said the bank had made progress despite a “very competitive market”.
N26 plots UK expansion
German fintech N26 has hired Will Sorby from Morgan Stanley as a new general manager to push ahead with an expansion in the UK.
Mnuchin backs British banking sector
The US Treasury Secretary Steve Mnuchin has said that he is not concerned about US banks’ exposure to Britain's banking sector amid uncertainty over Brexit, because institutions on both sides of the Atlantic are in healthy condition.
Chinese private equity market hit by sharp downturn
A new report has revealed that fundraising by renminbi-denominated private equity groups fell by 86% last year, highlighting how the Chinese private equity market has gone into reverse.
Hong Kong watchdog fines global banks $100m over China IPOs
The Securities and Futures Commission in Hong Kong has levied fines against UBS, Standard Chartered, Bank of America Merrill Lynch and Morgan Stanley for failing to sponsor Chinese IPOs. UBS, which was banned from leading IPOs in Hong Kong for a year, was fined HK$375m (£36.1m). Morgan Stanley was fined HK$224m, Bank of America Merrill Lynch HK$128m and Standard Chartered HK$59.7m.
CBA suspends spin-off in wake of banking inquiry
The Commonwealth Bank of Australia has opted not to spin off its wealth management business, saying it will instead prioritise refunding customers who were victims of misconduct.
The eight men who will decide the future of German banking
The FT examines the key figures who will decide the outcome of a potential merger between Deutsche Bank and Commerzbank.
Uber planning stock market float
Ride-hailing taxi app Uber is set to launch its IPO in April. The company will reportedly register with the Securities and Exchange Commission next month, as well as launching an investor roadshow. Uber, which started in 2009, was most recently valued at $76bn in the private market. It is seeking a valuation as high as $120bn.
Boeing fleet to remain grounded until May
The US Federal Aviation Administration has said that all Boeing 737 Max 8 and 9 aircraft will remain grounded at least until May after the fatal Ethiopian Airlines crash on Sunday. The aircraft will not fly until a software update can be tested and installed, the US regulator said. Meanwhile, crisis management experts have criticised Boeing for its response to the crashes. The FT notes that investors are asking if irreparable damage has been done to the company’s reputation.
Lufthansa slows expansion plans as fuel costs bite
Eurowings has posted a loss of €231m for last year, down from a €60m profit for the prior year, prompting parent company Lufthansa Group to trim capacity growth expectations.
Preferred bidder for Network Rail contract revealed
Balfour Beatty has been selected as “preferred bidder” for the Network Rail contract for the next decade. The construction firm will take an 80% share in the £1.5bn contract to do key repair and maintenance work across railway lines in London and the east Midlands, with Atkins and TSO each taking a 10% share of the contract.
FCA weighs exit fee clampdown across investment industry
The Financial Conduct Authority has said it will look into a ban or cap on exit fees charged by investment platforms. The watchdog’s consultation on the move will last until June 14th. The initiative will hit investment platforms like Hargreaves Lansdown, AJ Bell and Charles Stanley Direct, which charge investors up to hundreds of pounds each time they want to move portfolios to rival providers. But the FCA could apply the rules more widely to include insurers, life companies and financial advice firms.
Just Group seeking £400m to meet new regulation
Just Group will raise almost £400m to comply with new capital requirement rules to counteract the risk of equity release mortgages. The retirement services firm, which provides life insurance and pensions, posted a pre-tax loss of £86m, down from a profit of £181m the prior year, driven by the continued uncertainty around Brexit and changes to property assumptions.
Network International seeks bumper UK float
Dubai-based Network International plans to float on the London Stock Exchange. The payments processing firm, which is jointly owned by Emirates Bank and private equity firms Warburg Pincus and General Atlantic, operates in 50 countries across the Middle East and Africa.
Woodford remains bullish
Fund manager Neil Woodford has predicted that his investments will rise “spectacularly” and warned that “misinformation and lazy commentary” was driving investors to make bad decisions. The value of Woodford’s Equity Income Fund’s assets slumped from £10.2bn in May 2017 to £4.8bn at the end of January as investors walked away and investments went awry.
Bupa posts fall in profits
Bupa has posted a 19% fall in profits last year after it sold part of its UK elderly care business and battled headwinds in the Australia business.
Strong year for boat builders
British Marine, the trade association for the leisure, superyacht and small commercial marine industry, has said that the boat building industry expanded by 1.7% last year, its seventh consecutive year of growth. Lesley Robinson, chief executive of British Marine, said: “A weakened pound has provided much-needed support to industry exports and with British holidaymakers staying in the UK, nearly a third of tourism businesses are remaining positive about the future.”
MEDIA AND ENTERTAINMENT
Cineworld crowns Regal deal with bumper profits
Cineworld’s £2.7bn purchase of US cinema chain Regal resulted in profits increasing 125% to $349m (£262.9m) for 2018, while revenue rocketed 260% year on year to $4.12bn.
More first-time buyers in January
New figures from UK Finance have revealed there were 4.6% more first-time buyers taking out mortgages in January than there were in the same month last year. This amounts to roughly 25,100 new first-time buyer mortgages. Additionally, some 25,300 homemover mortgages were also completed in the month, 2.8% more year-on-year. The figures also suggested that landlords are continuing to leave the market as there were 5,500 new buy-to-let home purchase mortgages completed in January 2019, 1.8% fewer than in the same month a year earlier. However, the rate of decline is less than in January 2018, when UK Finance reported a 5.1% year-on-year fall in the number of BTL home purchases.
Debenhams weighs up Ashley’s loan offer
Debenhams said yesterday it will give “careful consideration” to Mike Ashley’s offer of a 12-month, £150m loan, adding it will “will engage with Sports Direct and other stakeholders regarding its feasibility in the interests of all parties”. Under the terms of the loan offer, Debenhams shareholders would vote on whether to issue new shares to Sports Direct, taking its holding to 35% - an arrangement that would make the loan interest-free.
Hammond could end austerity, IFS says
The Institute for Fiscal Studies has claimed that the UK's improved public finances, as revealed in the Spring Statement, provide Philip Hammond with the power to bring austerity to an end. The think tank said that increased “fiscal headroom” of £26.6bn enables the Chancellor an extra £15bn a year of spending, on top of current plans, while still keeping UK borrowing within his 2% of GDP limit target.
MPs vote to delay Brexit departure date
MPs have voted by 413 to 202 - a majority of 211 - for Prime Minister Theresa May to ask the EU for a delay to Brexit. It means the UK may not now leave on 29 March as previously planned. Mrs May says Brexit could be delayed by three months, to 30 June, if MPs back her deal in a vote next week. If they reject her deal again then she says she will seek a longer extension - but any delay has to be agreed by the 27 other EU member states. The PM has warned that extending the departure date beyond three months could harm trust in democracy - and mean that the UK would have to take part in May's European Parliament elections. MPs had earlier rejected an attempt to secure another Brexit referendum by 334 votes to 85. They also rejected a cross-party plan to allow MPs to take control of the Brexit process to hold a series of votes on the next steps, by the narrow margin of two votes.
Call for tougher UK laws on fraud and money laundering
The FT reports that a Lords committee says financial crime such as fraud and money laundering should be subject to the tougher laws that apply to bribery.