BANKING
Banks to have anti-fraud checks in place by 2020
Major UK banks will have checks in place to confirm the recipients of money transfers by 2020, the Payment Systems Regulator (PSR) has said. The 'Confirmation of Payee' service will see lenders cross-reference names with sort codes and account numbers to ensure funds are being sent to the right recipient. The banks involved in the initiative will include Lloyds, Barclays, HSBC, Royal Bank of Scotland, Santander and Nationwide Building Society. Louise Buckley, co-managing director of the PSR, said: "Today marks another significant step to making sure there are greater protections against authorised push payment scams.”
Barclays' half-year profits increase to highest in 10 years
Barclays has unveiled its best performance for almost 10 years, with an 83% increase in profits for the first half. Pre-tax profits were £3bn, its highest figure since 2010, with the boost partly thought to be linked to the lender facing no misconduct charges over the period. Chief executive Jes Staley insisted the bank could meet its profitability goal, a return on tangible equity (ROTE) of more than 9%, partly by reducing costs by more than it had previously planned to. The FT’s Lex says the verdict is still out on Staley’s commitment to investment banking.
Job cuts planned at HSBC
HSBC is planning further job cuts on top of the hundreds in the investment banking division announced earlier this year. The restructuring will also involve relocating more roles away from London to Paris. A source told The I that he expected the cuts to be in the thousands and across the whole business. In its last set of annual results, HSBC reported net profits were $12.6bn (£10.4bn) in 2018, 30% higher than in 2017 but below analyst forecasts of $13.7bn.
Revolut launches commission-free share trading
Digital Bank Revolut has launched a commission-free stock trading service as it looks to challenge trading platforms such as Hargreaves Lansdown.
INTERNATIONAL
StanChart profits outperform as buyback boosts shares
Standard Chartered delivered higher than expected profits in the first half of the year but warned of the impact of the US-China trade war on global market sentiment. Underlying profit before tax was $2.6bn in the six months to the end of June, up 11% year on year. CEO Bill Winters said the bank had made “good progress both financially and on our strategic priorities in the first half”. He also expressed regret that criticising shareholders as "immature and unhelpful" for raising concerns about his pension arrangements had caused such a backlash insisting that his compensation was a matter for the board.
NAB compensates clients A$32m
National Australia Bank has compensated more than 1,000 customers a total of A$32.4m (£18.3m) in the six months to the end of June. Over the period, Australia's five largest banking and financial services institutions paid a total of A$119.7m in compensation to customers whose savings were eroded by poor financial advice.
Central banks make record $15.7bn gold purchases
Global trade tensions led central banks to purchase a record $15.7bn of gold in the first six months of the year in an effort to diversify their reserves away from the US dollar.
AUTOMOTIVE
BMW and Ford warn Johnson over Brexit
BMW and Ford have warned the Prime Minister about the effects a no-deal Brexit would have on the car industry. With net profit falling 29% to €1.48bn (£1.35bn), BMW’s Harald Kruger said a no-deal would be a “lose-lose” situation for Britain and the EU, noting that Boris Johnson should: “Listen to the economy and listen to the people. He needs to be in a dialogue with business. I would visit Johnson to tell him this.” Meanwhile, BMW-owned Rolls-Royce has delivered a record first half, with a 42% rise in sales showing that the upmarket automotive sector is booming.
CONSTRUCTION
Kier shares soar on debt announcement
Kier Group enjoyed a 40% boost to its market value this morning as it announced “significant interest” in its house building arm, which it is trying to sell to reduce its debt. RPC Group finance boss Simon Kesterton is to take over as Kier’s new chief financial officer.
FINANCIAL SERVICES
London Stock Exchange inks deal to buy Refinitiv
London Stock Exchange Group (LSEG) has agreed a $27bn takeover of the financial data provider Refinitiv. Don Robert, the LSE chairman, said that the acquisition was a “defining moment” for the exchange, which will be transformed into a global rival to Bloomberg. LSEG is buying the business in an all-share transaction from Thomson Reuters and a consortium led by private equity firm Blackstone. The deal will result in Refinitiv’s shareholders holding an approximately 37% interest in LSEG and voting rights of less than 30%. The London Stock Exchange said in a statement: “The transaction brings together two highly complementary businesses to create a leading, UK headquartered, global financial markets infrastructure provider with a leading data and analytics business, significant capital markets capabilities across multiple asset classes, and a broad post-trade offering, well-positioned for future growth in a fast evolving landscape.”
FCA should have greater powers to protect consumers, MPs say
A report from the Treasury Select Committee recommends that the Financial Conduct Authority be given the power to propose an adjustment of its “regulatory perimeter” so the regulator can warn customers about unregulated financial products. "The FCA should be given formal power to recommend to the Treasury changes to the perimeter of regulation, with all recommendations publicly disclosed, providing greater transparency and focus to the process," the Committee said in a statement. The move follows the collapse of London Capital Finance, which sold unregulated mini-bonds and leaves 11,600 retail customers facing a loss of £236m. A Treasury spokesperson said: “We need to make sure we get the balance right on the regulatory perimeter” adding that the government is “committed to regulating only where there is a clear case for doing so.”
Insurance M&A at highest level in four years
With 222 deals completed worldwide in the insurance M&A sector in the first half of 2019, this represents the biggest increase in transaction volume since the first half of 2015 and is also the fourth six-month period of growth in a row. Ivor Edwards, partner and European head of corporate insurance at Clyde & Co, noted: “Despite recent signs of market hardening, delivering a positive result for shareholders remains challenging and M&A is an attractive strategy to deliver growth for re/insurance businesses around the world. “
Weak investor sentiment sees Schroders profit drop
Asset manager Schroders has announced its half-year results, with a 14% drop in pre-tax profits resulting from difficult market conditions and large outflows from its equity products. Profits before tax and exceptional items were £340.4m for the six months ending June 30, beating analysts’ forecasts of £336.3m.
Woodford offloads more assets
Neil Woodford has offloaded stakes in two more businesses: Russian warehouse owner Raven Property Group and venture capital company Mercia Asset Management. The disposals take total share sales to £800m since his flagship fund was suspended.
LEISURE & HOSPITALITY
Merlin Entertainments reveals fall in pre-tax profits
Merlin Entertainments Finance chief Anne-Francoise Nesmes said bad weather in the UK and US was weighing on the group after strong Easter and Spring Break trading, with pre-tax profits falling 21% to £34m in the six months to June 29. Group revenues were up 6.5% to £763m on the back of higher tourist visitors in London.
MANUFACTURING
Manufacturing output in UK falls to seven-year low
The Purchasing Managers’ Index compiled by research group IHS Markit has revealed that British manufacturing is “suffocating”, with a downturn in the sector continuing into July and factory activity at a six-and-a-half-year low. The figure remained at 48.0 in July, its lowest level for more than six years, marking the third consecutive month that the majority of firms reported a fall in output.
REAL ESTATE
Westfield owner suffers UK income fall in first half
Retail landlord Unibail-Rodamco-Westfield (URW) saw UK rental income fall in the first six months of the year as store closures and leasing delays affected its two London sites, with like-for-like net rental income down 3.1% compared to 2018.
SPORT
Rangers lose fight over merchandise
Rangers bosses have lost a legal fight with Mike Ashley who claimed they have been in breach of obligations under deals relating to replica kit. A company in the Sports Direct Group, SDI Retail Services, wants damages to be assessed.
ECONOMY
Bank of England cuts growth forecast on Brexit uncertainty and trade tension
The Bank of England has predicted a 30% chance that the UK economy will shrink at the start of 2020, amid growth of just 1.3% this year and next. The forecast is based on a smooth transition to a Brexit deal and a disorderly exit would have more severe consequences. The Bank left interest rates at 0.75%. It said that assuming a smooth Brexit and some recovery in global growth, it would be appropriate to raise rates “at a gradual pace and to a limited extent”.