UK lenders join forces to measure climate impact of mortgage books
Lloyds, Nationwide and NatWest will measure the climate emissions linked to their loan books as they become founding members of the Partnership for Carbon Accounting Financials’ UK coalition.
Riverstone preparing clean energy SPAC
Riverstone Holdings, one of the largest private equity investors in the oil and gas sector, is looking to create an acquisition company that will buy a business in the clean energy industry. The special purpose acquisition company (SPAC) will raise money from investors via an IPO, using funds raised to buy a privately owned energy business.
ECB relaxes bank leverage regulation in attempt to boost economy
Seeking to ease economic pressures stemming from the COVID-19 pandemic, the European Central Bank has relaxed regulations on eurozone banks, freeing capital in an attempt to boost lending.
CaixaBank and Bankia agree terms to create Spain’s biggest lender
CaixaBank and Bankia have agreed to merge, creating Spain’s largest bank with assets exceeding €650bn. The boards have backed the merger but it still requires shareholder approval.
Commerzbank board member exits
Michael Mandel, the board member responsible for private clients, is to leave Commerzbank.
MPs call for 2030 petrol car ban
The Mail reports that ministers are facing calls to ban sales of new petrol, diesel and hybrid cars in ten years, with a number of MPs calling for the transition to zero emission vehicles to be accelerated by policymakers. More than 100 Conservative MPs have echoed calls from the Committee on Climate Change and Labour, arguing that to help the Government achieve its target of net zero emissions by 2050, the date for a ban on new petrol, diesel and hybrid cars should be brought forward from 2035 to 2030.
Ryanair investors rebel over executive pay
Ryanair has suffered a shareholder rebellion, with more than a third of investor votes going against an executive pay package that would hand CEO Michael O’Leary a bonus of £416,000. Shareholder advisory group ISS had urged investors to vote against the remuneration report, questioning the bonus when the airline has taken £600m in support from the UK Government and furloughed thousands of employees. Despite 34.2% of votes going against executive pay, it was backed by 65.8% while 1.9% abstained.
Kier suffers £225m COVID-19 hit
Kier Group has fallen to a £225m annual loss, with net debt almost doubling after a lockdown of the construction sector stymied efforts by Andrew Davies, its chief executive, to steady the business. Revenues for its year to the end of June fell from £4.1bn to £3.5bn, a 15% drop, dragging down operating profits from £85.7m to £41.4m, a 52% decline. Impairment charges and one-off costs related to restructuring and the coronavirus dragged Kier to a pre-tax loss of £225m, taking its accumulated two-year losses to a total of £455m.
M&G Recovery fund manager Tom Dobell to exit
Tom Dobell, manager of the £1.4bn M&G Recovery fund, is stepping down from his fund management responsibilities and will depart M&G at the end of December. The fund, which M&G earlier this year said had “consistently fallen short of its performance target”, will be taken over by Michael Stiasny, manager of the M&G UK Income Distribution and Dividend funds.
Emmett recruited by Libra project
Former group general manager of HSBC, James Emmett, has been hired by Facebook’s Libra cryptocurrency project as managing director of Libra Networks. Stuart Levey, former chief legal officer of HSBC, joined Libra as chief executive earlier this year.
IG Group feels benefit of volatility and influx of retail investors
Derivatives trading firm IG Group has reported that revenues increased to £209m in the three months to August 31, up 62% compared with the year earlier period.
LEISURE AND HOSPITALITY
Cruise lines hit by pandemic uncertainty
All sailings by P&O Cruises have been cancelled until early 2021 amid ongoing uncertainty over quarantine and travel restrictions. President Paul Ludlow said: “We cannot wait for restrictions to ease, borders to open and for us to once again be able to set sail for a new beginning.” Meanwhile Peter Deer, managing director of Fred Olsen Cruise Lines, commented: “Having a situation which is so fluid, where one moment you can actually go to a destination and the next you can’t is completely unacceptable on a number of levels.” He voiced a belief that testing should be used to “deleverage the risk from travel and cruise significantly.”
Flutter role for former Labour deputy
Former Labour deputy leader Tom Watson has been hired as an adviser by Flutter Entertainment, owner of Paddy Power, to advise it on best practice in its shops, marketing, customer service and anti-money laundering procedures.
MEDIA & ENTERTAINMENT
TikTok rival prepares for blockbuster Hong Kong listing
Chinese short video app Kuaishou is readying a $5bn Hong Kong listing, with a deal likely in the first quarter of 2021 expected to value it at around $50bn.
Commercial landlords face £4.5bn in unpaid rent
The British Property Federation (BPF) has cautioned that commercial property landlords could face unpaid rent bills of more than £4bn in 2020, as a ban on business evictions was extended by the Government. The BPF estimates total rent unpaid for UK commercial property between late March and the end of December will be around £4.5bn. While this covers sites including offices and warehouses, the retail and hospitality sectors are likely to account for the vast majority of the unpaid rent. Bill Hughes, head of real assets at investor Legal & General, commented: “The moratorium continues to be misguided. It has encouraged tenants to ignore their obligations.”
Unibail sets out €9bn plan to pay down debt
Shopping centre owner Unibail-Rodamco-Westfield has proposed a €3.5bn capital raise, among other moves intended to reduce the firm’s €26bn debt load amid the ongoing effects of the coronavirus pandemic.
Next upgrades profit forecast
Next has upgraded its profit forecast for the second time this year after reporting more resilient sales than it expected, but still struck a cautious note on second-half trading. The clothing retailer now expects a full-year pre-tax profit of about £300m, up from an estimate of £195m given at the end of July, although it expects sales to fall 12%, due in part to the end of the government’s furlough scheme and uncertainty over the trajectory of the pandemic. For the six months to July, the group reported a 34% decline in sales to £1.34bn and a pre-tax profit of £9m.
No bonus for John Lewis staff
In what chairman Dame Sharon White conceded would be a “blow” for its 80,000 employees, John Lewis has said it will not pay a bonus this year, marking the first time in 53 years that staff will not see a payout. With the retailer reporting a £635m pre-tax loss for the six months to July 25 as it felt the impact of the coronavirus crisis.
BoE holds interest rates at record low
The Bank of England’s (BoE) Monetary Policy Committee (MPC) has unanimously voted to hold interest rates at their record low 0.1%, with the level of quantitative easing to stay at £745bn. The BoE said that despite a stronger than expected recovery in recent months, the economy remains around 7% smaller than at the end of 2019. It also said it does not intend to increase interest rates until "significant progress" had been made in getting inflation back to its target level of 2% target, with data released this week showing it is currently at a five-year low of 0.2%. The MPC’s September report also notes the BoE’s “plans to explore how a negative Bank rate could be implemented effectively”, although rates are unlikely to fall below zero this year as the MPC said the Bank and Prudential Regulation Authority will begin “structured engagement on the operational considerations” in Q4 2020. The Bank also warned that the increasing rate of coronavirus infections and uncertainty over the UK’s post-Brexit relationship with the EU poses a threat to Britain’s economic recovery.
£50bn may be in the shadow economy
A report by the National Audit Office (NAO) suggests that up to £50bn in cash could have disappeared into the "shadow economy". The warning comes after it was shown that while the number of banknotes in circulation hit a record high of 4.4bn in 2020, estimates suggest less than a third are regularly being used for cash transactions. While little is known about the cash, the NAO report says it could be held overseas or in undeclared household savings pots. However, it also warns that some may be in the "shadow economy" - income from illicit services such as drug dealing, prostitution or undeclared work to avoid paying tax.