Carney and Lagarde press for business action on climate change
Mark Carney has called on more institutions to join the Task Force on Climate-Related Financial Disclosures (TCFD), an initiative to get companies to calculate their exposure to climate risk and disclose it to investors. Speaking at an event in London yesterday, the governor of the Bank of England said he hoped such reporting would be made mandatory. "Achieving net zero will require a whole economy transition - every company, every bank, every insurer and investor will have to adjust their business models," said Carney. He added that such a transition "could turn an existential risk into the greatest opportunity of our time". At the same event, Christine Lagarde, the ECB president, said none of the 26 biggest eurozone banks and insurers provide full disclosure and only five partially disclose their exposure to climate change risks. “We still have some way to go,” she added.
Mortgage competition dragging on Co-op Bank recovery
The Co-operative Bank's pre-tax losses widened by 8% to £152.1m last year, as PPI repayments continued amid tough mortgage lending competition and record low rates. The lender’s net interest margin fell to 1.75% in 2019, compared to 2.05% in 2018, though it battled to increase its mortgage book by 5% after generating £3.8bn of new business. Consumer and small business deposits also both grew, by 6%.
Banking start-ups to reveal progress
Banks that received funds from the state-backed Banking Competition Remedies (BCR) scheme will disclose their latest progress on building new digital business bank accounts today. Starling Bank received £100m from the scheme and ClearBank, which partnered with banking app Tide, took £60m. The updates follow news Metro Bank handed back £50m after announcing massive losses and missing pledges made to the BCR.
Provident profits pay dividends
Provident Financial has proposed a 60% increase in its final dividend after revealing a 1.6% rise in profit to £162.2m. Though Vanquis Bank’s profit before tax slipped 9.1% to £173.5m, reflecting previously guided reduction in ROP income, Provident division Moneybarn’s profit before tax rose 10% to £30.9m as demand for used cars remained robust, taking basic earnings per share up 22% to 33.3p.
Thyssenkrupp seals €17bn private equity deal for elevator unit
Advent and Cinven have paid €17.2bn for Thyssenkrupp’s elevator business. The private equity firms bid in a consortium with the Abu Dhabi Investment Authority and the RAG Foundation.
Coronavirus concerns shadow strong results at Standard Chartered
Asia-focused Standard Chartered will miss its income growth targets of between 5% and 7% this year due to the coronavirus outbreak. The bank, which posted a 46% rise in pre-tax profit to $3.7bn (£2.9bn), began offering relief measures which include interest-only mortgage payments for up to six months to borrowers in affected areas in its key markets of Hong Kong, mainland China and Singapore, earlier this month.
Citi consolidates European leadership in Frankfurt
Citigroup has appointed a new regional chief to its Frankfurt base. Kristine Braden’s move from New York to Germany reflects a growing focus for US banks on Europe, with Brexit looming.
Aston Martin losses deepen to £100m in turbulent 2019
Aston Martin has shelved its electric vehicle plans after pre-tax losses widened to £104m, from £68m, on the back of a £49m impairment charge. Revenues fell 9% to £997m.
Inchcape foresees challenges in 2020
Inchcape reported yesterday that annual revenues were marginally up at £9.4bn but its underlying pre-tax profits were down 7% at £326m. The car retailer’s CEO Stefan Bomhard blamed the profit fall on "challenging dynamics in several markets" and said he expected 2020 to also be difficult.
Climate campaigners win Heathrow expansion case
The court of appeal has ruled that plans for a third runway at Heathrow are illegal as ministers have not adequately taken into account the government’s responsibilities to meet climate change targets. Miles Celic, CEO of TheCityUK, representing financial services, said the uncertainty over airport capacity was "a blow to any serious vision of a global Britain" and the UK seemed "stuck in the international infrastructure slow lane".
Persimmon chief quits amid row over firm's building quality
Persimmon has announced the departure of chief executive Dave Jenkinson, as the housebuilder scrambles to improve the quality of its homes following a damning independent review and a deluge of customer complaints. The builder reported profit of £1.04bn for 2019, down 5%.
Inflows slow at St James's Place
Slowing inflows at St James’s Place resulted in a fall in full-year operating profit for the wealth manager, with the firm posting an operating profit of £952m, down from £1bn in 2018. New business fell to £793m in 2019, down from £852.7m the year prior. Though client funds increased to a record £117bn, up from £95.6bn in 2018, net inflow of funds under management slipped from £10.3bn to £9bn.
Impairment charges not so friendly for Amigo
Lender Amigo has withdrawn its guidance for the full year after revealing a sharp drop in pre-tax profits, from £79m to £53.5m. In the nine months to the end of December, revenue grew 8.5% to £218m, while net loan book rose 3.8% year on year to £722.3m, though the firm’s impairment charges as a percentage of revenue was 31.5%, up from 24.2% the year prior.
RSA reveals record year for underwriting profit
Insurance firm RSA has revealed a record year for underwriting profit after restructuring its international business. RSA, which has pulled out of several lines in its commercial insurance business, including international freight and construction, enjoyed an operating profit of £656m, up from £517m in 2018, after underwriting profit rose to £405m, which was up around 60% on the year prior. The insurer’s combined ratio was 93.6%.
Financial services must realise the opportunities of Brexit
Adam Vile, head of EMEA at Lab49, says in a piece for City AM that the City should stop treating Brexit like a damage limitation exercise and recognise the opportunities presented by leaving the EU, such as increasing the performance and competitiveness of UK banks by removing onerous regulation.
City watchdog tells asset managers to stop using Libor-linked products
The FCA has told asset managers to stop using investments and fee-structures linked to Libor as regulators attempt to speed up the transition to alternative risk-free rates.
MEDIA & ENTERTAINMENT
Coronavirus savages WPP stock
Advertising giant WPP was the biggest faller on the FTSE 100 on Thursday after the firm acknowledged a slowdown in business related to the coronavirus outbreak. WPP posted a 1.9% fall in net sales in the fourth quarter, its worst of the year, as China, the world’s second largest advertising market after the US, accounts for 5% of its £10.8bn net sales. Boss Mark Read said: “If, or when, the coronavirus impacts the global economy it will no doubt impact WPP.”
Wealth managers limit exposure to UK property
UK asset managers have significantly reduced their exposure to property, following the high-profile suspensions of the M&G and Prudential UK property funds last year. Six adviser groups have removed direct property funds from their portfolios for investors across all risk profiles, according to FE Fundinfo's Adviser Fund Index. Ten funds in the sector were removed overall, the highest from one sector single in the index, with Threadneedle's UK Property Authorised Investment IGA, L&G's Property Feeder and M&G's Property Portfolio funds among them. Earlier this week M&G announced that it was continuing the suspension of its £2.5bn property fund despite making good progress in selling some of the fund's assets.
Sales fall at Topps Tiles
Topps Tiles has issued a surprise profit warning, sending a shiver through the building market. The firm blamed the downturn on weak consumer spending in the home improvement sector. The tile and flooring group, which had until now shrugged off jitters around Brexit and political uncertainty, said that like-for-like sales had fallen by 5.5% since the start of the year.
Liverpool reveals record turnover
Liverpool Football Club enjoyed record turnover of £533m in the period ended May 31 2019 - the day before their sixth Champions League triumph in Madrid. Despite a record £223m outlay on transfers, media revenue increased by £41m to £261m, commercial revenue grew by £34m to £188m and match revenue rose £3.5m to £84m.
Markets enter correction territory amid jump in coronavirus cases
Thursday saw Wall Street’s main indexes fall for the sixth straight session and enter correction territory as fears over the impact of coronavirus heightened. The S&P 500 and Nasdaq are now more than 10% below their intraday record highs hit on February 19, while the Dow Jones Industrials is 10% off its February 12 peak. Elsewhere, Europe’s STOXX 600 officially entered correction territory as a jump in coronavirus cases outside China, especially in Europe, raised concerns about a prolonged economic slowdown. In London, the FTSE 100 dropped another 3.5% to 6,796.4, wiping £62bn off the value of British blue-chip companies.