BANKING
StanChart tells staff they can work when they want and wherever they want
Standard Chartered has told its 75,000 staff they can work when they want and wherever they want informing its workforce that it was in talks with a third party to provide extra "near-home" workspaces. "While we have been thinking through the issues around future workplace for some time, it's inevitable that recent events provided a catalyst," said the bank's HR chief Tanuj Kapilash rami. "We also see this as an opportunity to appeal to a wider and more diverse potential future workforce." HSBC has already hinted that it could adopt similar measures, as have JP Morgan and Deutsche Bank.
More than £1.1bn in fraud exposed in UK bounce back loan scheme
More than £1.1bn of suspected fraud has been prevented so far in the UK Government’s flagship “bounce back” loans in an indication of how criminals have aggressively targeted the scheme. Estimates from the British Business Bank provided to the Commons public accounts committee said lenders had rejected 26,933 bounce-back loans over concerns they could be fraudulent preventing criminals from stealing £1.1bn from the £40bn scheme.
PRIVATE EQUITY
BlackRock looks for new profit rockets as rivals play defence
The FT reviews Blackrock’s performance this year, noting that the asset manager has once again outperformed its peers, and the S&P 500, closing up 30% year to date on Wednesday.
INTERNATIONAL
Commerzbank records Q3 loss
Commerzbank recorded a net loss of €69m ($81.12m) in the third quarter, overturning a net profit of €297m a year earlier. A €62m loss was expected, according to a consensus forecast. The German lender booked a restructuring charge of €201m in the quarter to close 200 branches and offer early retirement to hundreds of employees. The bank also set aside €272m in provisions for future credit losses, up from €114m a year ago and largely related to the pandemic.
Higher-than-expected Q3 profit for UniCredit
UniCredit said net profit in the three months to the end of September was €680m, compared with an average forecast of €334m euros ($391m) in a company-provided consensus. Revenues rose 4.4% on a quarterly basis driven by fees and a jump in trading income as commercial activity on the bank’s main markets in Italy, Germany and Austria picked up after restrictions to fight the virus eased.
SocGen returns to profit
Société Générale said its third quarter net income rose by 0.9% from the same period of last year to €862m ($1.01bn), while revenue fell 2.9% to €5.81bn. Equity trading revenue rose 5.1% year-on-year while fixed income trading revenue rose 9.4% in the latest quarter.
Natixis to cut ties with under-fire H2O
French investment bank Natixis is looking to sell its majority stake in under-fire H2O Asset Management casting doubt over the future of the asset management firm.
AUTOMOTIVE
SMMT: Car sales set for worst year since 1982
Figures from the Society of Motor Manufacturers and Traders (SMMT) show sales of new cars fell to a nine-year low in October with the Welsh “fire break” that closed dealers accounting for half of the decline. Registrations of new cars during the month slipped by 1.6% to 140,945, taking the year-to-date total to 1.384m - down almost a third. The SMMT now expects 2020 to be worst performance by the British car industry in almost 40 years, with sales at a low not seen since 1982. The trade group downgraded expectations for sales this year to 1.56m, down from the 1.66m it forecast in May, and far below the 2.25m expected at the start of the year before coronavirus struck. The SMMT calculated the decline will be worth £22.5bn in lost sales.
Bentley will stop making fossil fuel cars by 2030
Bentley has said it aims to stop building cars with traditional internal combustion engines within six years and be completely carbon neutral at the same time.
CONSTRUCTION
Housebuilding projects prop-up the construction sector
A new survey has indicated that mass housebuilding projects across the country are keeping Britain's construction sector propped up. The IHS Markit/CIPS construction purchasing managers' index for October fell to 53.1 from 56.8 in September, missing expectations for a reading of 55 and marking the slowest rate of growth in five months. It had peaked at a 57-month high of 58.1 in July, benefiting from a 'catch-up' of work following the restrictions on activity earlier in the year. The construction PMI dropped to 29.9 in May and reached a record low of 8.2 in April when vast numbers of building sites were closed due to the lockdown from 23 March. A PMI reading above 50 or more indicate growth, while a reading below signals contraction.
FINANCIAL SERVICES
Foreign bidders swoop on RSA
RSA has confirmed it is in talks with a consortium of Canadian insurer Intact Financial and Danish insurer Tryg about a possible deal that will value the insurance giant at £7.1bn. The proposals would see Tryg assume control of RSA's Swedish and Norwegian businesses, as well as co-owning with Intact the British group's operations in Denmark. Intact would retain RSA's businesses in Canada, the UK and elsewhere. The news sent RSA shares up 46% to close at 670p yesterday.
Ant IPO could face six month delay
Ant Group’s $35bn (£27bn) IPO could face a delay of up to six months after it was suspended on Tuesday, according to reports. The payments company has come under pressure in China over concerns about its huge loan book. Draft rules, introduced on November 1, force internet companies such as Ant to provide around a third of loans themselves and cap loans. Ant currently only provides 2% of loans itself with the rest from third party lenders. Ant is believed to have around $270bn of consumer loans on its books, meaning it will need to hold vastly more cash on its balance sheet.
Lloyd’s of London aims for £800m of savings for brokers and underwriters
Lloyd’s of London has said that it will cut operating costs for brokers and underwriters by £800m, or about 3% of the total, within the next two years by reducing bureaucracy and increasing automation.
HEALTHCARE
Mixed set of Q3 results for AstraZeneca
AstraZeneca has posted a mixed set of third-quarter results. Product sales of $6.52bn were ahead of a company-compiled consensus of $6.50bn. The number excluded payments from collaborations. However, the company reported core earnings of 94 cents per share for the three months ended September 30, lower than analysts’ expectations of 98 cents.
Covid vaccine market could be worth $10bn a year
Analysts at investment banks Morgan Stanley and Credit Suisse predict the future market for COVID-19 vaccines could be worth more than $10bn (£7.6bn) in annual revenues for pharmaceutical companies. The calculations are based on the assumption that people will need to be vaccinated every year, in a similar way to the flu jab, with an average price of $20 for a COVID-19 vaccine dose. Prices range from $3 a dose to $37.
LEISURE & HOSPITALITY
Airbnb could list next week
Airbnb is set to make its IPO listing as early as next week, according to reports. The home rental company suggested last month that it was aiming to raise around $3bn (£2.3bn) from a stock market listing, with the hopes of achieving a valuation of more than $30bn subject to market conditions. Bookings on the platform were down by more than 80% at its lowest point during the coronavirus crisis, forcing Airbnb to cut 25% of its workforce. However, the firm has regained ground since March, following a summer that saw holidaymakers ditch hotels for home rentals as quarantine measures crippled the aviation industry.
Hospitality firms facing bleak winter
The Office for National Statistics has found that a third of hotels and restaurants fear going bust over a bleak winter as bosses brace for another slump in sales and investment.
MEDIA & ENTERTAINMENT
Virgin Media increases broadband customers
Virgin Media has reported its biggest quarterly increase in broadband customers since 2017 as the firm said its proposed merger with O2 was on track. The telecoms group said its fixed-line customers have surpassed 6m after an increase of 37,000 in the third quarter. This is compared to a loss of 3,000 in the same period last year and marks the biggest rise since the third quarter of 2017. Virgin’s Project Lighting full-fibre rollout increased to 125,000 premises over the period, up from 93,000 in the first and second quarters, taking its total build to 2.4m. Mobile customers increased by 92,900, with the number of converged customers taking a broadband and mobile contract rising. As a result, revenue ticked up 0.8% to £1.3bn over the quarter. Net profit hit £190.4m, compared to a £49.1m loss last year. However, EBITDA and amortisation slipped 3.6% to £514.5m.
TalkTalk extends Toscafund deadline offer
TalkTalk has extended the deadline for major shareholder Toscafund to make a solid offer for the company until 3 December. Last month the asset manager made a 97p per share approach for TalkTalk, with the original deadline set for yesterday. The current offer values the telecom at around £1.1bn, and represents a significant step down from previous bids. Toscafund itself reportedly offered 135p per share for the company last year.
Nintendo increases operating profit
Nintendo has posted a first-half operating profit of ¥291.4bn (£2.1bn), up from ¥94bn in the same period last year. The Japanese tech firm said it expected to sell 24m Switch consoles in the year to March 2021, up from its previous forecast of 19m. It also hiked its operating profit forecast by 50% to ¥450bn.
RETAIL
Sainsbury's to cut 3,500 jobs and close 420 Argos stores
Sainsbury’s has announced it will close almost four-fifths of its standalone Argos stores by 2024, with the potential loss of more than 3,500 jobs, as it refocuses on food under new chief executive Simon Roberts. The company said that 120 stores that did not reopen after the UK’s first COVID-19 lockdown would now close permanently and the overall estate would be cut to about 100 stores, while up to 200 more Argos collection points will be added to supermarkets and convenience stores. The changes come as Sainsbury’s said 40% of its sales were now online, compared with 19% a year ago. The company said it would book a £438m one-off charge to reflect the cost of Argos store closures and other strategic changes, pushing the company into a first-half pre-tax loss of £137m. Total sales slipped 1.4%; a fall in petrol and clothing sales was offset by an 8.2% rise in sales of groceries and a 7.4% rise in general merchandise. Sainsbury’s said it will be paying out £232m in dividends.
ECONOMY
BoE launches fresh £150bn stimulus package
The Bank of England has launched a fresh £150bn stimulus package as part of efforts to shore up the UK economy as the coronavirus crisis continues to blight the country. The latest expansion of the scheme takes total bonds purchased by the Bank under quantitative easing to £895bn. Andrew Bailey, Bank Governor, warned the outlook remains "unusually uncertain" in the wake of the spread of the virus but added: "We are confident that we have the headroom to do what we need to do to meet our remit." Mr Bailey said the Bank now expected economic output would be 11% lower at the end of the year than it was at the start, and that unemployment would rise from the current level of 1.5m to 2.6m. The Bank also forecast a 1% hit to the economy in early 2021 as a result of the end of the Brexit transition period - even if there is a deal with the European Union.
Furlough scheme to be extended until end of March
Chancellor Rishi Sunak has confirmed that he will extend the furlough scheme across the UK until the end of March. Mr Sunak said the scheme will pay up to 80% of a person's wage up to £2,500 a month. He told the Commons that the Government will review the policy in January.