Virgin Money’s profits up 10%
Virgin Money has posted a 10% rise in profits to £141.6m in the first half of 2017, while total income rose by 5% to £343m. Statutory profit before tax increased to £127.2m compared to £123.8m in the first half of 2017. The bank said it had cut £7.8m from previously declared credit card earnings after a “full and in-depth” analysis of customer behaviour. Virgin Money was releasing its results a month after CYBG struck a £1.7bn deal to buy the bank. Commenting on the takeover, Jayne-Anne Gadhia, Virgin Money’s chief executive, said: “The recommended offer made by CYBG for Virgin Money in June reflects confidence in our strategy, our track record of delivery and the complementary models of the two businesses and will accelerate the delivery of our strategic objectives.”
Former ombudsman to lead review over branch closures
Natalie Ceeney, the former head of the ombudsman service, is leading a review asking politicians, regulators and banks how to ensure that vulnerable people still have access to cash in the future, despite the closure of rural bank branches. Ms Ceeney has written to Nicky Morgan, chairwoman of the Treasury committee, and to regulators and banks, inviting them to contribute to the Access to Cash review, which is intended as a way to actively plan for further falls in cash usage.
Coutts hunting for entrepreneurs
The Independent’s Edward Robinson examines Coutts’ decision to launch an invitation-only investment club that connects clients with handpicked UK companies seeking early-stage funding. Coutts charges clients a small percentage of the capital they invest. Mohammed Kamal Syed, Coutts managing director, comments: “We have entrepreneurially minded clients who want to invest in private companies, but they don't have a lot of time to source deals. We filter deals for them.”
Madar joins Barclays
Barclays has appointed Fabio Madar as global head of G10 foreign exchange trading and distribution. He will be based in London and joins Barclays from Deutsche Bank.
PE house EQT looks to raise €8bn infrastructure fund amid boom
EQT is looking to raise €8bn to create what would be Europe’s largest infrastructure fund.
ECB sticks to promise to end stimulus
The European Central Bank has reaffirmed that it will end its 2.6trn euro stimulus programme this year, saying the risks from an unpredictable global trade conflict did not warrant any deviation from its plan. The move came just as the eurozone was showing signs of an economic slowdown after a bumper 2017. Growth fell from 0.7% in the final quarter of last year to 0.4% in the opening three months of 2018.
UBS to review misconduct policies after rape claim
UBS has said it is planning to review how it handles cases of harassment after an alleged incident between a London-based trainee and a more senior employee.
Macquarie Group appoints first female chief executive
Macquarie Group has appointed Shemara Wikramanayake, the current head of the investment bank’s asset management arm, as its new chief executive.
Daimler to split into three
Daimler is to split itself into three separate units as the German carmaker prepares for the arrival of electric and self-driving vehicles. The board's vote for the overhaul came after Daimler posted a 27% drop in second-quarter profit to €1.8bn (£1.6bn) and revenues 1% down to €40.8bn.
Airbus reports rise in profits
Profits at Airbus, Europe's largest aerospace company, more than doubled in the second quarter despite a slow start to 2018. The company said adjusted profits before interest and other charges rose 110% to €1.15bn (£1.02bn) in the first half of 2018. However, net profit for the six months fell 55% to €496m.
FCA warns of ‘significant’ errors in Priips data
The Financial Conduct Authority has warned that significant errors have been made by investment managers following the introduction of regulations for Priips (packaged retail and insurance-based investment products).
Alliance Trust considers selling savings arm
Alliance Trust is considering the sale of its savings arm after being approached by several buyers. The firm has announced profits of £74.1m for the first six months of 2018, up 49% on last year.
External shareholders deliver blow to CMC Board on exec pay
More than half of CMC Markets’ external shareholders have voted against executive pay, although the vote passed due to the backing of majority shareholder and chief executive Peter Cruddas.
Pensions risk could make schmucks of savers
The FT’s John Authers writes that the next financial crisis is brewing in pension funds, and not banks. He says the dangers in the financial system have become more insidious.
MEDIA AND ENTERTAINMENT
Sky’s annual profits up 7.5%
Sky saw pre-tax profits rise 7.5% in the year to June, gaining 500,000 new customers in Europe. US groups Comcast and Fox remain in a bidding war to buy the UK based company, with Comcast’s £26bn bid recently trumping Fox’s £24.5bn offer. Fox currently holds a 39% stake in Sky and is vying to secure the remaining 61%, having agreed to sell its Twentieth Century Fox entertainment assets – including its stake in Sky – to Disney.
Facebook suffers heavy losses
More than $110bn has been wiped off Facebook’s market value after the company told investors that user growth had slowed following the Cambridge Analytica scandal. Shares in the company fell by 19% to $176.26, dragging its market capitalisation down to $510bn from $629bn the day before.
Australian media companies merge
Australian media corporations Nine Entertainment and Fairfax have agreed to merge, creating what they say will be the nation's "largest integrated media player". The deal, worth an estimated A$4bn (£2.25bn), gives Nine Entertainment a 51.1% stake. The new business will be called Nine.
Robert Walters plans US expansion
Headhunter Robert Walters is planning to expand in the US to take advantage of surging jobs growth. It already has offices in New York and San Francisco.
Mothercare completes fundraising
Mothercare has successfully completed a share issue, raising £32.5m as it pushes ahead with sweeping store closures. The retailer has identified savings of £19m through the store closure process, and hopes to realise £10m in cash. In total, Mothercare plans to shut 60 of its stores by June next year, placing 600 jobs at risk.
Household debt situation worst on record
ONS data shows British households spent around £900 more on average than they received in income last year, pushing their finances into deficit for the first time since the credit boom of the 1980s. The shortfall amounted to nearly £25bn, with the overspend mostly paid for with borrowed money, although savings were also eaten into. Anti-poverty charities warned that low income households were the worst affected. The ONS figures showed the poorest 10% of households spent two and a half times their disposable income, on average, while the richest 10% spent less than half of their available income.
Low earners’ wage growth outstrips the rich
Inequality has fallen since the financial crisis, as incomes for the bottom 40% of earners have risen faster than for those earning the average amount. In the past five years incomes for the bottom 40% rose by an annual average of 2.5%, compared with 1.9% for the average household, the ONS said.