Beaune: EU could grant City partial access
A key ally of Emmanuel Macron has said the EU could grant the UK’s financial sector partial access to the continent’s markets, but it would be “revocable, provisional, unilateral on the part of the EU.” Clement Beaune, junior minister for EU affairs, told Bloomberg some sort of equivalence could be granted by the middle of the year. The comments come after Bank of England Governor Andrew Bailey criticised the EU for setting up “legally dubious” situation where it would force banks to move business from London to the EU. The Telegraph suggests the hints from Beaune will spark talk of a climbdown by the EU, but one City grandee told the paper he is pessimistic that EU officials will grant equivalence to UK firms. He said: “Everything I hear in the corridors of power, in the French and German treasuries, is that they will never grant long-term equivalency to London.”
StanChart to resume dividend payments
Standard Chartered has said it will resume its dividend for the full year despite a sharp fall in profit due to the pandemic. The lender, which halted its payout last year at the request of the Bank of England, said it will pay a dividend of 9p per share and will launch a buyback of $254m (£179m). This was despite Standard Chartered’s pre-tax profit dropping 57% in 2020 to $1.6bn, largely caused by higher credit impairments caused by the pandemic. The bank booked impairments of $2.3bn, more than double the previous year, though it said two-thirds of these charges were recorded in the first half of the year. However, Standard Chartered recorded strong trading for its investment division thanks to market volatility during the pandemic. Operating profit from its financial markets unit rose 18% as clients ramped up their investment activity.
Atom Bank targets IPO
Atom Bank is seeking to raise £40m from existing investors as it targets an IPO in the next few years. The digital challenger said it is confident it will move to profitability from its mortgage and business lending “within a year”. The bank is set to triple its business loans to SMEs to £700m by the end of March, which it said had been achieved through CBILS as well as those independent of government backing. Atom recently inked a deal with open-banking fintech Plaid to further grow its offering for UK SMEs. Since its launch Atom has loaned £2.8bn to mortgage customers and has added £362m of mortgages in the second half of the year.
BoE could lead the world with crypto
Ron Kalifa, former boss of payment processing company Worldpay, has urged the Bank of England to develop its own crypto-currency and start regulating established coins like bitcoin. He said: “Britain should get ahead on this. Why leave it to China?” The Times’ James Dean contends that a central bank digital currency would provide a level of state-backed stability that bitcoin and other cryptos cannot, with lower transaction costs.
Sunak to unveil new business loan and scrap emergency schemes
The Chancellor will next week reveal a new state-guaranteed loan programme to replace the three main emergency coronavirus schemes which have so far allowed businesses to borrow £73bn.
Co-op Bank cuts losses
The Co-operative Bank has narrowed annual losses to £103.7m for 2020 against £152.1m in 2019, despite setting aside nearly £22m for loan defaults during the pandemic.
Goldman Sachs boss rejects work from home as the 'new normal'
David Solomon has voiced his enthusiasm for Goldman Sachs staff to return to the office describing remote working as an “aberration”. The investment bank’s CEO said Goldmans had operated throughout 2020 with “less than 10% of our people” in the office and that having working from home as a permanent feature would not suit the work culture at Goldman Sachs. “I do think for a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal for us. And it’s not a new normal. It’s an aberration that we’re going to correct as soon as possible,” he said.
Myanmar protests imperil economy as banking business slows
Myanmar’s banking system is on the verge of a complete shutdown as protests against the military coup escalate.
Aston Martin revenue plummets
Aston Martin has reported wholesale deliveries of cars to dealers fell 42% to 3,394 in the year to end December, while retail sales to customers were down 32% to 4,150. Revenue fell 38% to £612m, with the pre-tax loss almost quadrupling to £466m. Despite the results, management outlined a plan to sell 10,000 cars a year by 2025.
BAE Systems enjoys sales increase
BAE Systems said full-year sales increased by 4% to £20.9bn in 2020, while operating profit edged up by to £31m to £1.9bn. Meanwhile, statutory profit was down 11% to £1.3bn. Revenue increased by £1bn to £19.3bn, while underlying earnings per share rose 2% to 46.8p.
St. James’s Place grows FUM
St. James’s Place has revealed funds under management for the year ended December 31 stood at a record £129.3bn compared with £117bn the previous year. CEO Andrew Croft said: “Growth on this scale will require continued investment but given the success of our technology initiatives in recent years, we believe overall expense growth can be held to around 5% per annum.” Despite the strong figures the company announced plans to cut 200 jobs as it streamlines its business. “In the near term, whilst we are encouraged by the moderate growth in new business we have we have seen in the early weeks of 2021, the external environment remains challenging,” Mr Croft said. “There remain difficult months ahead but as COVID-19 restrictions ease, we are hopeful there will be an economic recovery and we will see a return to more normal growth in new client investments.”
Amigo posts £87m loss
Amigo Loans posted an after-tax loss of £86.8m for the nine months to December 31. Revenue fell 36.9% to £137.5m, which has been driven by the break in lending and payment holidays. Amigo is also reducing its workforce by 17%, laying off around 70 employees. The lender as had to provision millions of pounds to handle compensation payments caused by a large number of customer complaints and has been investigated by the FCA over how it assesses customer credit worthiness. This has hampered Amigo’s ability to operate and it has warned that unless its proposed scheme for dealing with compensation payments is approved, it may not survive.
Coinbase files to become first listed US cryptocurrency exchange
US-based cryptocurrency exchange Coinbase has filed paperwork with the Securities and Exchange Commission detailing plans for a direct listing on the Nasdaq, meaning it won’t raise any new money. “Coinbase is company with an ambitious vision: to create more economic freedom for every person and business,” said co-founder Brian Armstrong in a letter accompanying the filing.
Hikma sees revenue soar on Covid treatment drugs
Hikma Pharmaceuticals has said it expects a huge rise in annual core operating profit for the year, after being called in to supply emergency drugs for COVID patients during the pandemic. The London-based drugmaker said core operating profit jumped 11% to $566m for the 12 months to December last year, up from $508m in 2019. Hikma said the profit hike was down to strong growth in its generics and injectables businesses.
LEISURE & HOSPITALITY
Flutter Entertainment addresses gender balance
Vice CEO Nancy Dubuc has been appointed non-executive director of Flutter Entertainment as part of a boardroom shake-up aimed at redressing the company’s gender balance. Ms Dubuc has led youth-oriented Vice Media since 2018. Prior to this she was chief executive of A&E Television Networks.
Airbnb predicts 'significant' travel rebound
Airbnb’s revenue dropped 30% last year to $3.4bn (£2.4bn), as COVID-19 restrictions kept many from travelling. But the company said it is preparing for a "significant" travel rebound as the world emerges from coronavirus lockdowns.
Serco CEO defends dividend restart
Serco CEO Rupert Soames has defended the restart of dividend payments after a year in which the outsourcer secured £350m in revenues from NHS Test and Trace. He said Serco’s COVID-19 related work accounted for 1% of annual profits when offset by other areas of the business being shut down by the pandemic. Soames added that the company felt “very strongly” shareholders should see returns on their investment after several years in which they injected £850m of additional equity to prop up the business since its last dividend in 2014.
Shaftesbury: Relaxation of pandemic restrictions will herald West End revival
Shaftesbury said that it has collected 45% of rent due for the quarter to December 31, and 36% of January 2021 rents have been collected to date. The West End landlord has agreed a number of rent changes where needed, including waivers and deferrals. Since October it has offered monthly, rather than quarterly, rent collections on a permanent basis.
Primark predicts £1.1bn loss in first-half sales
Primark owner Associated British Foods estimates it will lose £1.1bn in sales over the first half of its financial year as coronavirus-induced restrictions have forced the retailer to close its stores for weeks at a time. The group said it expected Primark’s sales in the first half to February 27th to be about £2.2bn, down from £3.7bn a year earlier, and adjusted operating profit to be marginally above break-even. Its level of discounting was substantially lower than the same period last year it said, but it still expects to warehouse about £260m of autumn and winter stock for later this year.
Virgin Wines toasts AIM float
Virgin Wines is to float on the AIM market. The direct-to-consumer online wine retailer, which has around 147,000 paying subscribers and delivered more than 1m cases in 2020, said it expects its IPO on March 2 to see it place 6.6m new ordinary shares and 17.7m existing shares at an offer price of 197p per share, in a listing set to value the firm at £110m and make selling shareholders nearly £35m. The company, set to start trading under the ticker VINO, expects to raise £13m for the business.
Return to growth expected in second half
Experts are predicting growth of up to 4.6% for Scotland this year as the country’s economy recovers from the pandemic. After an estimated drop of 10.6% in GDP last year, the economy north of the Border is expected to grow by between 3.6% and 4.6% in gross value added (GVA) terms in 2021, depending on the speed of the recovery. For the UK as a whole, the economy will see negative growth in the first quarter of up to -2.8%, followed by a gradual return to growth from the second quarter.