Standard Chartered a takeover target after bid from UAE lender
Shares in UK lender Standard Chartered rose by 20% on Thursday after reports that First Abu Dhabi Bank was considering a bid for the bank. The Abu Dhabi group was forced to confirm it was evaluating a bid but said it was no longer interested, sending the gain in StanChart’s shares down to 7%. Standard Chartered’s share price has fallen by 33% under the leadership of Bill Winters and the aborted bid serves to highlight the bank’s vulnerability to a takeover. “Historically the barrier to a deal would have been its valuation, whereas that’s not the case now,” Gary Greenwood, a banking analyst at the stockbroker Shore Capital, said. “It is attractive from a valuation perspective, it’s just whether you can get over all the other regulatory and political hurdles that come with buying a large, complex bank.”
Silvergate crashes as crypto-related deposits plunge by $8bn
The US crypto bank Silvergate Capital revealed on Thursday that its deposits from digital asset customers shrank to $3.8bn on December 31st, from $11.9bn at the end of September. The news sent its shares down 43% in New York trading. Silvergate’s troubles are the latest to hit the industry after the collapse of Sam Bankman-Fried’s crypto exchange FTX in November. Silvergate said it would cut its workforce by 40%, or about 200 employees, as it tries to rein in costs amid a deepening industry downturn.
Danske Bank pleads guilty to Estonia bank fraud
Danske Bank has agreed to pay over $2bn to end probes into anti-money laundering failures in a now-closed branch in Estonia. The $2.06bn payout includes $1.21bn to the U.S. government, $178.6m to the U.S. Securities and Exchange Commission and a criminal fine of $672.3m to Danish authorities. The U.S. Department of Justice said Danske defrauded U.S. banks about its Estonia customers and its anti-money laundering controls to enable high-risk customers who lived outside Estonia, including in neighbouring Russia, to access the American financial system.
Crypto lender Genesis mulls bankruptcy
The crypto lender Genesis has laid off 30% of its staff and is considering filing for bankruptcy, the Wall Street Journal reports. The company suffered steep losses from loans it supplied to FTX’s trading arm Alameda Research and crypto hedge fund Three Arrows Capital. Both Alameda and Three Arrows filed for bankruptcy last year. Genesis is working with investment bank Moelis to evaluate its options for the future, including a potential chapter 11 filing, said people familiar with the matter.
Mercedes chief warns of rising protectionism in car industry
Mercedes-Benz boss Ola Källenius has warned of a creeping political protectionism in the auto sector, arguing that forcing further regionalisation of supply chains is anathema to a sophisticated industry.
LME Chair Huey Evans exits ahead of nickel report
Gay Huey Evans, the chairman of the London Metal Exchange, is stepping down with the business giving no reason yet for her departure. Her exit comes ahead of the planned publication next week of an independent review into the crisis in its nickel market last year. The LME is being sued in London by hedge fund Elliott Investment Management and trading firm Jane Street after it cancelled billions of dollars’ worth of trades in response to a runaway short squeeze on nickel. The LME is accused of protecting China-based Tsingshan Holdings which initially faced a hit of $8bn due to a hefty short position. Regulatory investigations by the Financial Conduct Authority and Bank of England are also ongoing and the LME agreed in April to appoint new directors to strengthen its governance.
Former CEO of Celsius sued for fraud
The former CEO of the failed cryptocurrency lending platform Celsius Network is being sued for fraud by the New York Attorney General Letitia James. In her lawsuit filed in state court in Manhattan, James said Alex Mashinsky, a co-founder of Celsius, "engaged in a scheme to defraud hundreds of thousands of investors" by getting them to put billions of dollars' worth of their digital assets in his platform.”
Citadel posts record revenues for 2022
US hedge fund Citadel has posted record revenues for 2022. Kenneth Griffin’s operation, with $54.5bn under management, had about $28bn in revenue, far exceeding its prior record of $16.2bn the year before. Citadel Securities also posted improved revenue – at $7.5bn up from $7bn in 2021.
Global regulators to step up scrutiny of risks outside banking system
The FT reports on how global regulators are readying tougher rules for non-bank financial institutions as concerns grow over the stability of hedge funds, clearing houses and pension funds.
LEISURE & HOSPITALITY
Sales rise at Greggs
Greggs has reported that like-for-like sales grew by 18.2% in the three months to December 31, lifting its total sales for the year to £1.51bn, an increase of 23% compared with the same period in 2021. The company said demand for its seasonal lines was high, including its festive bake, a vegan alternative, sweet mince pies and festive hot drinks such as the salted caramel latte.
MEDIA & ENTERTAINMENT
WhatsApp allows users to connect via proxy servers
WhatsApp is to allow users to connect to the app using proxy servers in a move designed to bypass internet shutdowns.
Next raises profit forecast
Next has reported that full-price sales increased by 4.8% in the nine weeks to December 20, compared with the same period last year. As a result it now expects full-year pre-tax profits of £860m, £20m higher than previously forecast and 4.5% higher than last year. However, the retailer said that initial guidance for the year ending January 2024 was for full-price sales to fall by 1.5% and for profit before tax to be £795m, down 7.6% versus the current year. This figure was, however, above consensus forecasts of about £780m.
Sales rise at B&M
B&M has upgraded its full-year profit forecast to a range of £560m to £580m in the year to March, up from current analysts’ forecasts of £557m. It comes as the retailer reported that group sales increased 12.3% year-on-year to £1.6bn in the 13 weeks to December 24, while in the UK, B&M’s branded stores were up 10.3% compared to the same period last year.
December footfall reaches the highest level since pandemic start
Data from the British Retail Consortium show shopper footfall reached its highest level since the start of the pandemic in December. Total UK footfall across 2022 remained 11.8% below pre-pandemic levels but this was a significant improvement on 2021's 33.2% drop.
UK’s services sector ended 2022 in lacklustre fashion
The S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) for December has been revised down to 49.9 from an earlier flash reading of 50.0, indicating a minor contraction in business activity. Tim Moore, economics director at S&P Global Market Intelligence, said: “UK service providers ended the year with another downturn in new orders as strong inflationary pressures and worries about the economic outlook sapped demand.” Although business optimism had recovered slightly, respondents were “braced for a sustained period of subdued demand in 2023,” Moore added.
UK businesses cut investment as interest rates rise, BoE survey finds
Higher interest rates are prompting UK companies to cut investment by an average of 8% with business leaders also expecting wage growth to increase, driving a further rise in rates.
OpenAI heading for $30bn valuation
The research lab behind the viral ChatGPT chatbot is in talks to sell existing shares in a tender offer that would value the company at around $29bn. OpenAI released a series of artificial intelligence-based products last year that captured the public’s attention, including the image-generation program Dall-E 2 and chatbot ChatGPT.