Provident Financial reports positive first half results
Bradford-based lender Provident Financial has reported adjusted ongoing pre-tax profit of £63.5m for the six months ended June 30, 2021. Malcolm Le May, CEO of the firm, noted: "The first six months of 2021 showed a marked contrast to the extremely difficult conditions seen throughout 2020. Underlying customer trends and macroeconomic conditions have improved year-on-year, allowing us to focus on the core businesses, which is reflected in our results.”
Comment: Banks have social responsibilities too
Leo McKinstry comments on the closure of high street bank branches in the UK arguing that lenders are using the rise of online banking as an excuse to cut services and save money. He warns that even with the Government considering new laws to prevent closures, banks will continue to slice off further parts of the network. McKinstry goes on to say that banks should remember they were bailed out by the taxpayer and they owe a debt to the nation.
Tesco Bank puts switching requests on hold
Tesco Bank customers have been left frustrated after the bank cancelled their switching requests so it could deal with a backlog. It announced last month that it was closing the service in November because only 12% of its 230,000 customers with an account used it as their main banking account.
ABN Amro resumes dividend payments as Q2 net profit beats forecasts
ABN Amro announced better-than-expected profits on Wednesday due to the economic recovery in the Netherlands and that it would be resuming dividend payments as a result. The Dutch bank said net profit rose to €393m in the second quarter, well up on the €266m predicted by analysts. “Demand for corporate loans in the Netherlands is still muted as strong government support continues, but it is showing signs of stabilising and the pipeline is improving”, Chief Executive Robert Swaak said. The bank also announced that Dutch prosecutors are investigating its role in dividend tax transactions between 2009 and 2013.
Hacker behind $600m DeFi attack returns funds
A hacker who stole over $600m (£434m) from a cryptocurrency exchange Poly Network has returned most of the funds after being tracked by blockchain analytics firm SlowMist Technology. The theft was the biggest DeFi attack to date but several crypto exchanges blocked transactions from the addresses that Poly Network identified as belonging to the hackers. Some $180m of stolen assets remain at the Poly Network Exploiter address, Tether froze $33m worth of USDT connected with the hackers account and the remainder of the missing money has been moved to separate addresses.
Ghana to pilot digital currency
Ghana will pilot a general purpose digital currency, the country’s central bank said on Wednesday. The programme will be conducted in partnership with German banknote printer Giesecke+Devrient and will serve as a precursor to the issuance of a digital form of Ghana's national currency to be called the 'e-Cedi'.
Australia’s Commonwealth Bank unveils record $4.4bn share buyback
Commonwealth Bank of Australia said on Wednesday that cash profits jumped 20% to A$8.8bn in the year to June; unveiled a record A$6bn (US$4.4bn) share buyback and hiked its dividend following a surge in profits.
Fortress-type resilience makes big banks hard to topple
William Cohan says in the FT that banking giants such as JPMorgan “have become cartel-like institutions” that simply brush off scandals. But they remain vulnerable to borrowing short and lending long.
Goldman Sachs hires former spy chief as adviser
The former head of MI6 Sir Alex Younger has been hired by Goldman Sachs as a paid adviser on geopolitics, international risk and cyber.
Prudential demerger of US business to complete next month
Prudential has said that the demerger of its US business is set to complete next month. The announcement came alongside its half-year results, which showed a rise in new business sales, but also significant disruption caused by pandemic measures that stopped its agents from travelling. New sales in Hong Kong were down 35% year on year, with cross-border selling to mainland China “severely” affected by travel restrictions. Overall new business sales in Asia and Africa increased by 17%. Strong performances from Prudential’s Chinese joint venture, its Singapore and its Malaysia operations helped deliver new business profit up a quarter year on year to $1.2bn, higher than analysts had predicted.
English law could pave the way to innovation in global crypto-markets
Writing in the Telegraph, Shearman & Sterling partner Barnabas Reynolds considers whether the UK’s legal system can provide the necessary transactional fairness and regulatory certainty to allow the global crypto financial market to bloom. The main problem is that disagreements between legal and regulatory systems threaten “to restrict and even kill off valuable product offerings and limit the benefits to the world of phenomenal innovation.” Reynolds says that if the UK’s common law system was used to structure regulation it could provide “a key function for the benefit of the world’s economy, allowing for growth and innovation at one and the same time.”
Admiral post robust half-year results
Admiral has posted robust half-year results for the period up to the 30 June 2021. The insurer saw its pre-tax profit jump by 76%, from £274.4m this time last year to £482.2m for the six months to 30 June 2021. It is thought that a fall in settled car claims during the lockdowns of 2020 and 2021 has led to the positive results posted by the company. Elsewhere, the group turnover also saw a significant increase of 9% as the fewer claims looks to have seriously bolstered the company accounts.
LEISURE & HOSPITALITY
Hungry customers boost Deliveroo
Deliveroo said that its gross transaction value, its preferred measure of sales, rose 102% year-on-year to £3.4bn in the first six months of 2021. This growth saw the food delivery group's revenues rise 82% to £922.5m and although Deliveroo remains in the red with a pre-tax loss of £105m, this was less than the £128m reported in the same period last year. However, Deliveroo said that gross profit margins for the full year would be “in the lower half” of its 7.5% to 8% range due to investments and expectations that the average size of consumer orders will fall back to pre-COVID levels.
UK should aim to become an industrial superpower once more
Writing in City A.M., Katherine Bennett, the chief executive of the High Value Manufacturing Catapult, says the UK needs to become an industrial superpower once more and should aim to increase the size of its manufacturing economy from £220bn to £400bn by 2030. Bennett adds that the decision to prioritise advanced manufacturing as a strategic industry over the past ten years has been vindicated but the next decade will see even greater challenges. However, “with those issues comes the tremendous opportunity for the UK to lead the world in developing sophisticated technology that improves lives everywhere.”
Meggitt centre of US bidding war
Interest in British defence companies from US firms has grown following an offer for Meggitt from Ohio-based TransDigm, which has a base in Marlow, Buckinghamshire, after buying an arm of Cobham. Earlier this month, Meggitt agreed an offer from Parker Hannifin.
MEDIA & ENTERTAINMENT
BBC weighs disposal of Elstree studios
The BBC is considering a sale of its studios at Elstree in north London as the broadcaster scrambles to cut costs amid increased competition from streaming rivals.
Demand eases, but property shortage supports prices
A report from the Royal Institution of Chartered Surveyors indicates that demand for new homes fell in July for the first time in four months as the stamp duty holiday came to an end. However, despite demand easing, house prices are being supported by a shortage of properties coming to market. Simon Rubinsohn, chief economist at RICs observed: “Significantly, a strong message from survey respondents is that buyers are continuing to place a premium on space, with the prospect of a hybrid model of work being adopted by many organisations providing the opportunity for greater flexibility around location. This is being reflected in the challenge some current homeowners are having in moving up the property ladder, as well as in stronger price expectations for larger properties.”
John Lewis to create 500 jobs at delivery depot
John Lewis is to create 500 jobs at a new warehouse it has rented from Tesco in Milton Keynes as it tries to keep up with the boom in online orders. The retailer cut nearly 4,000 jobs in shops since the onset of the pandemic.
La Liga confident of securing victory in €2.7bn tie-up with CVC
A report by Rothschild asserts that the €2.7bn offer from CVC Capital Partners for La Liga is fair and that the private equity firm could help Spain’s top football league develop its digital business and extend its international reach. Meanwhile, it has been reported that Goldman Sachs will contribute a $1.17bn syndicated loan to CVC's investment.
How the hot UK labour market is driving interest rate forecasts
The FT reports on how analysts suspect that without a significant cooling of the labour market following the end of furlough, the Bank of England could be forced to increase interest rates as early as next spring.
UK lobbying regulator probes email Philip Hammond sent on behalf of bank
The Office of the Registrar of Consultant Lobbyists is investigating whether former chancellor Philip Hammond should have registered as a lobbyist when he promoted software from OakNorth Bank to the Treasury.