RBS seeks to buy back shares
RBS is considering buying back shares from the government as it looks to deploy more capital and speed up its privatisation. The bank has tabled a special resolution seeking permission to make off-market share purchases from the Treasury through a "directed buy-back". Shareholders in the lender will vote on the proposal next month. At least 75% of shareholders must approve the plan. It would then be up to the Treasury to decide if it wants to sell some of its 62.3% stake to RBS. Chairman Howard Davies said: “The board believes that this is in the best interests of the bank and its shareholders by helping to facilitate the return of the company to full private ownership.”
Credit card borrowing plunges to record low
The Bank of England’s latest credit conditions survey has found that high street banks are forecasting that borrowing on credit cards will decline in the first quarter of 2019 by the most since records began. The BoE said its measure of demand for credit card lending over the three months to the end of March had dropped to -20.7 from -7.2. The survey on credit card lending will help to calm concerns about excessive borrowing, but economists said there was a risk of too sharp a reverse.
Woods: Small UK banks may benefit from simpler regulation post-Brexit
Sam Woods, the deputy governor of the Bank of England, has suggested that smaller banks may benefit from simpler regulation after Brexit. He said the BoE was taking a close interest in “radical steps” being taken by U.S. and Swiss regulators to make banking rules simpler for small lenders, although he added that the Bank’s focus was on ensuring banking was safe and sound, before fostering competition. Meanwhile, Mr Woods said it was not yet clear whether “Open Banking” reforms to help payments firms challenge banks would become a gateway for bigger change.
Citi names Livingstone as head of European operations
Citi has appointed David Livingstone to run its European operations ahead of Brexit in March. Mr Livingstone will replace Jim Cowles, having most recently been head of the bank’s Australia and New Zealand division. Citi said that Mr Cowles oversaw a 53% increase in institutional client income to $3.89bn (£3bn) and focused on improving diversity, creating a target of at least 30% of senior management roles being held by women by 2025.
Revenue at Morgan Stanley dips
Morgan Stanley has posted group revenues of £6.6bn in the fourth quarter, down 10% on the previous year. The decline was driven by falls in its wealth management arm and a flat performance at its investment bank, while competitors achieved growth in both departments. Profits fell from £1.9bn to £1.4bn. CEO James Gorman expressed optimism about the new year. “We do not believe the fourth quarter is a new normal ... the first quarter of new year has started on a similar path to the first quarter of 2018,” he said.
BofA head of investment banking to step down
Bank of America Merrill Lynch has announced that its London-based head of global investment banking, Diego De Giorgi, is stepping down next month. He will be replaced by Jack MacDonald and Thomas Sheehan, both of whom are based in the US.
Germany steps up work on potential Deutsche-Commerzbank tie-up
Germany’s finance ministry has asked the country’s banking regulator BaFin to share the results of its analysis of a potential merger between Commerzbank and Deutsche Bank.
Société Générale trading revenues hit by ‘challenging’ market
Disposals and a "challenging market" will dent Société Générale’s fourth quarter, with the French bank indicating that though its dividend will be stable - revenues will be affected.
Menzies' Airline Services takeover approved
The Competition and Markets Authority has approved aviation services firm John Menzies’ takeover of London-based Airline Services, which, with an annual turnover of £34.9m, provides de-icing and aircraft presentation services to 60 airlines across 12 UK airports.
London’s dominance of clearing risks stability
Sabine Lautenschläger, a member of the ECB's executive board, has warned that London’s dominance in clearing presents a risk to financial stability. Speaking in Ireland, she said clearing was too greatly concentrated in the City and ought to be reduced. Ms Lautenschläger also issued a warning to financial institutions against trying to create "empty shells" within the EU as a gateway to its market post-Brexit. She added that while the ECB recognised that Brexit required big organisational challenges for banks, many were "big enough to shoulder these changes and to bring staff to the EU".
Wealth manager Charles Stanley hit by choppy markets
Amid choppy markets and cautious investors, Charles Stanley has posted an 8.8% decline in assets under management for the last quarter of 2018, down to £22.8bn.
Investment in healthcare technology surges
A recent report from Pitchbook has revealed that the value of investment deals in healthcare devices and supplies in Europe rose by 148% in 2018 as new tech brought innovation to the sector. Christoph Ruedig, partner at Albion VC, believes some of the uptick of investment in hardware-based medical technology may have come from a general increase in venture capital funding.
LEISURE AND HOSPITALITY
‘Weak regional market’ bites into Whitbread profits
Whitbread has announced that it has begun the process of giving £500m back to shareholders after completing the £3.9bn sale of Costa, but warned that uncertainty would stall profits next year. Growth fell in the third quarter to 3.5% amid “uncertain” economic conditions, while like-for-like sales in the UK fell 0.6%.
GVC online revenue growth offsets sluggish retail business
Online gambling firm GVC has revealed strong growth in its online business over the year to December 2018, with net gaming revenues up 19% over the year.
Manufacturers setting aside cash
Santander has revealed that its manufacturing clients are building up cash reserves and delaying capital expenditures in preparation for a no-deal Brexit. Lending data shows patterns consistent with stockpiling by manufacturers. The Bank of England's fourth-quarter survey of UK credit conditions showed demand for "inventory finance” rose much faster than average towards the end of 2018, after hitting a three-year high in the previous quarter. Meanwhile, research from UK Finance showed that overall demand for borrowing from manufacturers rose by 7% in the year to November, to £18bn, bucking the trend of falling demand for loans in most other sectors.
Philips to close UK factory
Philips is to close its only factory in the UK, at Glemsford in Suffolk, with the loss of 430 jobs. Philips said it would close the site, which makes baby bottles, in 2020 and transfer most of its operations to a site in the Netherlands. The electronics firm said the move was part of plans to scale down its factory portfolio from 50 sites worldwide to 30.
MEDIA AND ENTERTAINMENT
Netflix boosts subscriber numbers
Netflix has revealed that its paid subscriber numbers have reached more than 139m, almost tripling its membership base in five years. Netflix said it added 8.8m customers in the three months to 21 December, up more than 6% from the prior quarter. Revenue in the quarter jumped 27% from 2017 to almost $4.2bn (£3.2bn).
More first-time buyers secure mortgages
November saw 36,200 new first-time buyer mortgages completed, rising 5.8% from the same month in the previous year, according to UK Finance. The £6bn of new lending in the month was 9.1% more year-on-year. New buy-to-let loans marked a 9% decline from a year earlier and a 11% drop in value, although buy-to-let remortgaging was up 9.5%. A separate survey from the Bank of England shows that lenders are forecasting the demand for mortgages to plummet. The Bank’s gauge of demand for mortgage lending over the next three months fell to -17.5 in the fourth quarter of 2018, dropping from 0.2 in the third quarter and marking its lowest level since the end of 2010. Credit not secured with property also dropped and is expected to fall further up to March.
Luxury developments probed in Liverpool and Manchester
The Serious Fraud Office is investigating a number of collapsed luxury property developments in Liverpool and Manchester that attracted millions from investors in the Far East. The SFO is investigating the £200m New Chinatown and £90m North Point Pall Mall schemes in Liverpool, and the Angelgate development in Manchester.
Debenhams may struggle to refinance
The credit ratings agency Moody’s has warned that Debenhams will struggle to refinance its debt without raising new funds from shareholders. After weak sales over Christmas Moody's said it expected Debenhams' underlying profits to fall by up to £20m this year, having previously predicted they would be stable on last year.
Business leaders warn of ‘destructive’ no-deal
In a letter to the Independent, a number of business leaders warn of the “destructive effects” of a no-deal Brexit on their sectors “and, therefore, on the UK economy.” Signatories including Michael Izza, CEO of the ICAEW, and Mike Cherry, national chair of the Federation of Small Businesses, say leaving the EU without a deal would hit jobs, undermine tax revenues and impact upon public services. They urge politicians to “avert a UK-wide crisis and find a way forward to ensure the end of our EU membership doesn’t end an era of unprecedented economic strength for the UK – with all the political and social fallout that will herald.”