Barclays confident on bumper figures
Barclays' UK arm almost trebled its pre-tax profits on last year, up 30% to £826m for the first half. Without charges, including the £1.4bn settlement with the US Justice Department, Barclays’ international unit saw pre-tax profits jump 20% to £3.7bn. A confident chief executive Jes Staley said: "This is a business which is performing well, having addressed the challenges of the last decade." Total income for the period was flat at £10.9bn. Barclays' core capital ratio rose to 13%, just above analysts' average forecast of 12.9%. In the first three months of 2018, the ratio was 12.7%. Meanwhile, Barclays has acquired a significant minority stake in fintech Marketinvoice, using the latter’s technology to provide £1bn in capital to small businesses in the UK. This follows Santander’s announcement of its own fintech partnership yesterday, with Moneybox.
NatWest debit cards declined
Some customers of NatWest have reported debit cards being declined when making payments. The bank, part of RBS, admitted there had been "issues" over card payments, with problems lasting for two hours. It apologised for the inconvenience. NatWest said that debit card payments were not working for two hours during the morning, although withdrawals at cash machines were still available.
HSBC puts client-checking software on offer
HSBC has agreed to sell its new know-your-customer compliance system through a deal with US-listed outsourcing company EXL.
RBS seeks CFO
RBS has approached senior investment banker at Morgan Stanley, William Chalmers, to become its next chief financial officer, reports suggest. Ewen Stevenson, a former Credit Suisse banker, is leaving RBS to become HSBC’s finance director.
Credit Suisse increases investment bank assets in Frankfurt
Credit Suisse is increasing its investment banking assets in Frankfurt as it builds up a hub there ahead of Britain's exit from the EU next year. The Swiss bank said it had approved moving around $200m worth of assets linked to its German unit to its investment banking and capital markets division from its strategic resolution wind-down unit. The move came "after a business reassessment in connection with our planning relating to the withdrawal of the UK from the EU", it said.
Société Générale profit rises as investment bank bounces back
French lender Société Générale has recovered after last quarter's declines with net banking income of €6.45bn, up 24% over the same quarter last year. Net income was €1.16bn, up 9%.
Deutsche Bank loses head of equity research for Emea
Deutsche Bank’s head of equity research for Emea, Paul Reynolds, has left the bank to join a competitor. It is understood that a successor has not yet been named.
Rolls-Royce swings to loss as engine problems drag
Rolls-Royce has revealed a pre-tax loss of £1.3bn for the six months to June 30 over its restructuring programme and nagging engine problems. Revenue was up 12% to £7.5bn.
Housebuilding sector drives buoyant July for UK construction
The UK construction industry has reported its fastest output rise since May 2017, driven by housebuilding. The construction purchasing managers’ index hit 55.8 last month, up from 53.1 in June.
Weather hits RSA profits
Overall profits after tax at RSA rose by 19% in the first six months of 2018 to £245m, while pre-tax profits increased by 12% to £296m. However, group operating profits fell by 15% to £304m “due to adverse weather”. Scandinavia was the largest operating profit centre, at £147m, closely followed by the UK and international unit, which contributed £144m. Underwriting profits fell by 23% year-on-year to £171m, while investment income also fell by 6% to £160m. The volume of net written premiums fell by 5% to £3.2bn, with a fall in the UK dragging it back.
New LSE chief bears good news
David Schwimmer, new chief executive of the London Stock Exchange has announced a 30% increase in first-half profits as growth was boosted by the group’s index and clearing businesses.
LEISURE AND HOSPITALITY
Currency headwinds blow Merlin off course
Merlin said profits fell in the first half of the year due to currency headwinds and the lack of another Lego movie. Revenue was up 1.3% £694m on a reported basis. On a like-for-like basis, revenue growth hit 0.5%, beating consensus estimates which had anticipated a decline. But pre-tax profits fell 13.7% to £43m.
MEDIA AND ENTERTAINMENT
Apple hits $1trn landmark
Apple has become the world's first public company to be worth $1trn (£767bn), with shares hitting a record high of $207.39. This follows quarterly financial results released on Tuesday which revealed profits of $11.5bn in three months on the back of record sales that hit $53.3bn. Apple’s share price has grown 2,000% since 2011.
Hyperoptic prepares broadband rollout
UK broadband company Hyperoptic has raised £250m from banks including Barclays and BNP Paribas to fund a rollout of fibre-optic broadband across the country. Dana Tobak, the firm’s chief executive, commented: “Such large financial backing from prestigious investors is testament to the strength of Hyperoptic’s business model and proven record for delivery”.
Cisco acquires cyber security firm for $2.4bn
Cisco Systems is to buy venture capital-backed cyber security company Duo Security for $2.35bn (£1.79bn) in cash, as it focuses on high-growth areas including security and cloud computing.
Sonos shares up on market debut
Smart speaker maker Sonos saw its shares increase on its market debut yesterday.
Countrywide shares fall
Peter Long, executive chairman of estate agency Countrywide, has insisted the firm’s turnaround strategy is on track after more than 60% was wiped off its value following the news that it would raise £140m through a heavily discounted share sale.
Amazon cuts tax bill despite soaring sales
Amazon paid £4.5m in corporation tax last year, despite sales of £1.98bn. The bill was down from £7.4m the previous year – when its sales were lower at £1.46bn. The Mail says the figures have angered retail campaigners, who say high street stores are being hit by increasing business rates while online entities face lower rates on out-of-town warehouses. MP Wes Streeting, a member of the Treasury select committee, commented: “It’s time for the Chancellor to overhaul the system of business rates to save our high streets, and instead make sure that big multinational corporations like Amazon are paying their fair share of taxes.” James Daunt, chief executive of Waterstones, offered: “If tax bills fall disproportionately on one set of retailers, that’s not a level playing field – that applies to business rates and it applies to corporation tax.”
House of Fraser hangs in the balance
Sports Direct’s Mike Ashley and Edinburgh Woollen Mill Group’s Philip Day may enter a bidding war to save House of Fraser from collapse. The retail chain is believed to urgently require cash so it can pay its rent bill next month and buy stock ahead of the Christmas trading period.
Bank of England raises UK interest rates to 0.75%
The Bank of England has raised the interest rate a quarter of a percentage point, from 0.5% to 0.75% - the highest level since March 2009. BoE Governor Mark Carney said there would be further "gradual" and "limited" rate rises to come, but if certain Brexit scenarios materialised the Bank would cut again if necessary. The Bank said that it did not expect interest rates to return to their long-term average of 5% “for many years” because the fundamental structure of the economy had significantly changed since the financial crash. Suren Thiru, head of economics at the British Chambers of Commerce, said: "While a quarter-point rise may have a limited long-term financial impact on most businesses, it risks undermining confidence at a time of significant political and economic uncertainty." Meanwhile, high street banks including Lloyds, Nationwide, RBS, Barclays and HSBC, are under fire after announcing plans to hit homeowners with interest rate hikes from today while failing to pass on higher rates to savers.