HSBC relocates senior bankers
HSBC chief executive Noel Quinn has announced that four executives are to relocate to Hong Kong from London later in the year. Head of global commercial banking Barry O'Byrne, co-head of global banking and markets Greg Guyett, head of wealth and personal banking Nuno Matos and head of global asset management Nicolas Moreau will move. Mr Quinn commented: "An important part of our global strategy is to base more of our leadership population in Asia, and so it is a logical step to locate more members of our global executive team in the region.” In a memo to staff, HSBC said that some employees working directly for three of the bosses also would be moving, but added: "Beyond that, we are not planning any large-scale movement of jobs from London to Hong Kong as a result of this decision."
£3bn briefly knocked off Barclays’ value
A suspected “fat finger” trade briefly knocked more than £3bn off Barclays’ value yesterday, with a slide from almost 187p on Tuesday to just over 168p shortly after trading opened on Wednesday likely the result of an incident where a trader mistakenly pushes the wrong button on their computer or fills out their order incorrectly. The London Stock Exchange confirmed that the sharp drop had triggered a price monitoring extension, whereby trading of the shares is stopped for five minutes while things settle. While shares had slipped below 169p at 8.05am, by 8.25am they were back above 186p.
Banks prepare 5% deals
A number of large mortgage lenders are set to offer ultra-low deposit deals for home buyers under the Government-backed 5% deposit scheme unveiled in the March Budget. Lloyds, NatWest, Santander, Barclays, HSBC and Virgin Money have declared an intention to take part. Lloyds Banking Group has confirmed that its new deals will be available across its brands, Lloyds Bank, Bank of Scotland, and direct from Halifax, as well as through Halifax Intermediaries. Nationwide is exploring opportunities to fully return to 95% loan-to-value lending in the coming months. Moneyfacts data shows that as of early April there were 34 deals for borrowers with a 5% deposit compared to five in March.
Goldman Sachs’ earnings up 460%
Goldman Sachs has announced a 464% rise in overall net earnings to $6.84bn, while revenues more than doubled to $17.7bn. Revenue generated by its investment banking unit in Q1 increased by 73% compared to the same period in 2020, hitting $3.77bn. Equity-trading revenues within its global banking division were 68% higher at $3.69bn. David Solomon, chairman and chief executive, said: “Our businesses remain very well positioned to help our clients reposition for the recovery and that is reflected in the record revenues and earnings achieved this quarter.”
JPMorgan reports record Q1 results
JPMorgan has reported net income of $14.3bn in the first three months of the year, an increase from $2.9bn a year earlier. The bank also reported a 14% rise in revenue to $33.12bn. Investment banking revenues were up 57% and trading revenue increased by 37% to $10.1bn. Jamie Dimon, chairman and chief executive of JPMorgan, cited the impact of the “rapidly improving economy”, adding that the recovery could be universal, provided that government initiatives were implemented “wisely and efficiently”.
ECB borrowing from Spanish lenders up
The European Central Bank has reported that borrowing by Spanish banks increased nearly 3% in March from the previous month to €268.7bn, as lenders take out cheap ECB loans amid the ongoing effects of the pandemic.
UniCredit investors to vote on CEO pay
Andrea Orcel's appointment as chief executive of UniCredit is to be come before shareholders for approval this week. ISS and Glass Lewis both back the appointment but have highlighted the "problematic pay package of the new CEO."
Flybe set to take-off again
Flybe is set to be relaunched after regulators granted the airline permission to return to the skies. The airline closed down in March 2020 but a new company affiliated with Cyrus Capital, which was part of a consortium that bough the airline in 2018, has bought Flybe’s business and assets. It will be known as Flybe Limited and is expected to fly many of the previously operated routes. The deal excludes Flybe’s aircraft, which were mortgaged to lenders by the previous owners, but includes Flybe’s take-off and landing slots.
EasyJet plans more flights from May as it banks on borders reopening
EasyJet has announced that it expects a pre-tax loss for the six months ending in March of between £690m and £730m, with revenue down 90% over the period to £235m.
Financial services firms see optimism increase
Financial services companies are seeing confidence in the economy surge at the fastest pace in more than seven years, according to a report from the CBI. The analysis shows that optimism rose at the fastest rate since December 2013 in March. A net balance of 52% of respondents said that they felt confident about the future, up from 44% in December. While businesses were hit during the most recent lockdown, a net balance of 43% said that they expected volumes to improve over the next three months. Businesses in the financial services sector expect profitability to rise in the next quarter, with a net balance of 32% forecasting higher profits. While employment fell for a fifth consecutive quarter in March, with a net balance of -12% reporting increased headcount, the pace of decline is expected to ease in Q2. Rain Newton-Smith, chief economist at the CBI, said: “It’s encouraging that financial services firms are feeling optimistic about the months ahead, likely warmed by the prospect of a phased reopening of the economy.”
City job listings surge
Morgan McKinley’s quarterly London Employment Monitor shows that financial services job postings returned to growth in March. The sector saw a 70% increase in job listings and a 4.8% rise in job seekers. Available roles were up 50% year-on-year. Hakan Enver, managing director at Morgan McKinley UK, said: “As the vaccine rollout continues apace and the road out of lockdown clears, we are seeing the sector recover at a faster rate than anticipated."
Coinbase goes public
Coinbase co-founder and CEO Brian Armstrong is taking the crypto exchange public. The largest bitcoin exchange in the US is expected to fetch a valuation of between $65bn and $100bn, which could make Mr Armstrong’s 20% stake worth up to $20bn. That would put him among the 100 wealthiest people in the world, based on Forbes’ most recent billionaires list.
House prices hit record high
Analysis from Halifax shows that house prices have hit a record high despite rising at a slower rate than a year ago, hitting an average of £252,765. The report reveals a 5.7% year-on-year increase in Q1, with this down from a nearly five year high of 7% recorded last year. On a quarterly basis, prices rose 0.3% in the first three months of the year, marking a slowdown on the 2.5% increase seen in Q4 2020. Reflecting on the figures, AJ Bell analyst Laith Khalaf was optimistic about the outlook for the sector, saying: “While there might be a few bumps along the way, particularly at the end of the stamp duty…the property market has proved itself to be unbelievably resilient.” He notes that much of this “comes down to the efforts the Government and the Bank of England have made to make mortgage borrowing incredibly easy and cheap.”
Tesco forecasts ‘strong’ recovery after pandemic hit
Tesco expects a “strong recovery” in profits in the current year after almost £900m of additional costs related to the COVID-19 pandemic held back its performance. Pre-tax profit fell 19.7% to £825m in the year to February 27, due in part to the cost of hiring more staff to cover employees who were off work due to coronavirus or self-isolating. Group sales, adjusted to remove the benefit of an additional trading week, rose 7% to £53.4bn. Like-for-like sales rose 6.3%, while online sales jumped 77% to £6.3bn.
Productivity rises amid the pandemic
Office for National Statistics data show that productivity increased last year, with output per hour, the main measure of productivity, increasing by 0.4%. The climb comes despite lockdowns causing economic output to shrink by almost 10%, with the headline figure increasing largely because the lower-paying and least productive jobs had borne the brunt of the pandemic. Output per worker in 2020 was 9.5% lower than in 2019.