Virgin Money shares rise as firm ups forecast
Virgin Money has announced a smaller than expected full-year loss and upped its forecasts for the coming year, with a pre-tax loss of £232m in the year to September 30, compared with a £164m loss a year earlier. The loss was mainly driven by PPI provisions, the takeover costs incurred when CYBG bought Virgin Money last year for £1.7bn and its subsequent rebranding. As a result of the losses, the lender said it would postpone its final payouts for shareholders. The FT’s Lex says the shares look cheap while top estimates for next year’s resumed dividend imply a healthy yield of more than 8%.
Chief executive pension perks to be reduced by major banks
HSBC, Barclays, Royal Bank of Scotland and Lloyds — have cut or are planning to cut executive pension allowances after call to align the payments with those received by other staff. For example, Barclays chief executive Jes Staley will receive a cash lump sum of £396,000 instead of a pension this year, the figure will be cut by more than £200,000 from next year. However, Virgin Money said yesterday that only new appointees would be paid in line with the rest of its staff meaning CEO David Duffy will continue to receive an allowance worth up to 20% of his salary. Peter Parry, policy director at investor group Sharesoc, commented: “It’s a start but these cuts do not really go far enough. There’s no real reason why CEO pension payments shouldn’t be completely in line with other staff”. But the FT’s Kate Burgess thinks “heading a British bank looks like a low-paid task.”
Former Gib regulator to mediate in bank clashes
Samantha Barrass, the former chief executive of Gibraltar’s financial services regulator, has been appointed as the first chief executive of the Business Banking Resolution Service. Ms Barrass, who is a former director of the Solicitors Regulation Authority, said the new service would be a “landmark moment for dispute resolution in the UK, bringing independent, transparent and effective closure for tens of thousands of businesses across the country”. Alexandra Marks, a deputy High Court judge and expert in dispute resolution, has been appointed chief adjudicator.
List of 82 closing TSB bank branches published
A cost-cutting plan announced by TSB will see some 82 branches of the bank shut their doors, with customer banking director Robin Bulloch stating: “We have made the difficult decision to close 82 branches, today announcing the locations. We will fully support customers through this transition.” Jenny Ross, money editor at consumer magazine Which?, said that communities across the country would be hit hard by the closures.
Zopa confident of satisfying regulators
Peer-to-peer lender Zopa must raise up to £150m and satisfy regulatory demands before being recognised as a bank, having been granted an Authorisation With Restriction by the Financial Conduct Authority just under a year ago. A spokesperson for the firm said: “We’re confident we will meet the requirements for full bank launch, as laid out by the regulators and we continue to work collaboratively with the FCA and PRA towards lifting our restrictions.” The company is seeking to offer savings accounts and credit cards as well as other products.
Experts sceptical about Bó’s appeal
The Telegraph’s James Cook questions whether RBS’s new Bó app will succeed given it mirrors Monzo’s offering four years after it launched and which is still not profitable. Fintech experts are sceptical about Bó’s appeal but analysts also say it may prevent existing RBS customers switching to a rival challenger bank. Bó’s customers can track their spending through a smartphone app and are given a bright yellow debit card. However, the bank pays no interest, in contrast with Monzo, which offers interest of 1% to 1.5% on money put aside in its "savings pots".
Myers joins Metro
Metro Bank has announced the appointment of Jessica Myers as brand and marketing director - a newly created role.
Japanese financial regulator unveils shake-up for stock exchange
Plans to introduce new capital to Japanese equity markets by providing foreign investors with an index of liquid, well-governed stocks could see the sector undergo its biggest reorganisation in decades.
UK car sales stutter – again
The FT features a report on the global car industry, with the Society of Motor Manufacturers warning in Britain that the sector’s “global competitiveness is under threat” as production falls.
Russia’s Sberbank pushes into driverless cars with AI joint venture
Sberbank is taking a 30% stake in Cognitive Pilot, a spin off from AI transport start-up Cognitive Technologies.
Boeing barred from self-certifying Boeing 737 Max
US regulators are reversing an agreement that Boeing can self-certify the safety of the Boeing 737 Max aircraft. Furthermore, European regulators will break with standard practice and cease to follow FAA approval of aircraft in light of the recent disasters involving the Boeing 737 Max.
Blackmore’s interest payments delayed again
Blackmore Bond, a minibond company that has raised at least £25m for property developments, has warned its 2,000-plus investors that it will miss its self-imposed deadline of paying their quarterly coupons today. The interest had originally been due at the end of October and this further delay will raise questions about the company’s financial health. A spokesman for Blackmore said: “We have been working tirelessly to pay the interest due, however a number of properties have not yet completed. Contracts have been exchanged and completion dates are now agreed, so we expect to be able to be in a position to pay interest by the end of December.”
Barclays Wealth personal injury business acquired by Rathbone Brothers
The personal injury and court of protection business of Barclays Wealth is to be acquired by wealth and investment manager Rathbone Brothers for an undisclosed sum, with a team of 10 from Barclays personal injury division to join Rathbone after the deal is completed. Shares in the latter were flat at 2,140p by late morning trading, with Barclays shares down 0.10% at 174.24p.
Frankfurt fails to lure City jobs
Attempts by Frankfurt to lure London jobs over Brexit fears has failed, a lobbying group representing the city’s financial services has admitted. Frankfurt Main Finance last year claimed up to 10,000 jobs would move there by 2022. But yesterday it conceded just 1,500 had moved, with another 2,000 potentially shifting once the UK actually leaves the EU.
Amigo shares jump as customer numbers climb
Amigo Loans has reported progress in restructuring its business and addressing regulatory concerns, as it reported a pre-tax profit of £42.3m for the six months to September.
European investors add to call for shorter trading day
Asset managers across Europe are backing calls from their UK counterparts to shorten trading hours in the hope this will boost diversity and improve poor liquidity.
Immupharma signs lupus deal with Avion Pharmaceuticals
Immupharma has announced an exclusive US licensing deal for its flagship lupus treatment Lupuzor, with the specialist drug developer to receive $70m (£54.1m) in milestone payments after reaching the deal with Avion Pharmaceuticals. Avion’s chief executive officer Art Deas stated: “After in-depth due-diligence around Lupuzor, its mechanism of action and learnings within the initial phase three results, we believe that Lupuzor has a unique position within lupus that sets it apart from competition.”
MEDIA & ENTERTAINMENT
Telegraph titles could be bought by Mediahuis
Telegraph newspapers could be bought by Belgian media group Mediahuis, with chief executive Gert Ysebart noting that his firm is looking for acquisitions. Sir Frederick and Sir David Barclay are believed to be considering a sale of the Telegraph and Sunday Telegraph titles after acquiring them for £665m 15 years ago.
Investors call for Big Four to act on climate-related risks
Natasha Landell-Mills, head of stewardship at Sarasin & Partners, is leading an investor push for Big Four auditors to take urgent action on climate-related risks, warning that failure to do so could do more damage than the financial crisis.
Nationwide figures reveal growth in house prices
Nationwide has issued figures revealing that annual growth in UK house prices has been under 1% every month for the last year, with the market remaining relatively stagnant. However, prices were up 0.8% in the year to late November, representing a slight increase on October’s figures, while the housing market as a whole is being affected by Brexit-related economic uncertainty and weak global growth. Nationwide said the average home in Britain now costs £215,734 and its chief economist Robert Gardner added that election periods tended not to directly affect the housing market, with wider economic conditions influencing buying and selling decisions more.
Hornby narrows losses and grows revenue
Hornby has reported a loss after tax of £2.71m in the six months to 30 September, down from a £3.23m loss the previous year, with group revenue at the model railway brand increasing 15% to £15.9m from £13.8m in the first half of last year. Chief executive Lyndon Davies commented: “Revenue is growing, losses are narrowing and we are shifting gears in our journey back to profitability and beyond”.
UBS cautious on UK shares
UBS says earnings growth for UK equities will not improve in 2020 regardless of which party wins the upcoming General Election. If the Tory party wins, uncertainty over the future trading relationship with the EU will continue, limiting the benefits of pushing through a Brexit deal. If Labour wins, corporate tax rates, greater regulation, and the prospect of nationalisation will cause UK domestic stocks to suffer, analysts said.
Business confidence on the rise
Business confidence has risen for the third consecutive month, according to the Lloyds Bank Commercial Banking Business Barometer. Business concerns about leaving the EU eased to -16 per cent in November, the least negative since January, and more businesses reported expecting improved trading conditions after Brexit.