Co-op bank narrows losses
A cost-cutting drive has helped the Co-operative Bank narrow its losses by £336.8m in the last year. Adjusted pre-tax losses came in at £140.3m in the year to 31 December, against a loss of £477.1m a year earlier. Over the last year, the Co-op Bank reduced its staff costs by £35.1m, while saving an additional £20.6m in 'non-staff costs.' The bank saw its annual income fall by £77.2m to £317.6m on a net interest basis. The results are the first full set to be released since the bank completed a £700m deal that saved it from a potential collapse last year. The Co-op Bank closed 10 branches last year and plans to shut the doors to 27 of its other sites across England and Wales by June. The closures will bring the firm's branch numbers down to 68.
Staley given a year to fix Barclays investment bank
Investors in Barclays have reportedly given CEO Jes Staley one more year to deliver on a promise to turn its investment bank into a profit engine able to weather downturns or face demands for a review of the business. "Assuming market conditions remain favourable, then we would really be looking to see high single digit returns on equity for this business by the next year-end, or questions will need to be answered," said Steve Davies, manager of the Jupiter UK Growth Fund, a top 40 Barclays investor.
Germany’s association of foreign banks expects about 20 banks to expand their presence in Germany as a result of Brexit. After Brexit, banks based in Britain will potentially lose passporting rights that allow them to do business across the EU from their London base. "This will involve up to 5,000 new jobs (in Germany) in the next two years, many of which will be hired locally," said Stefan Winter, the head of the Association of the Foreign Banks in Germany (VAB). Mr Winter said the VAB, which represents more than 200 foreign banks and financial services institutions in Germany, expects the bulk of bank jobs to shift to Frankfurt next year.
Banks avoid Cannes conference to guard reputations
Major banks including HSBC and Bank of America Merrill Lynch have stayed away from the influential Mipim property conference in Cannes this week as the industry struggles to shake itself of concerns about behaviour in the wake of the Presidents Club scandal. Sources close to the banks suggested that there is a nervousness about being seen to be encouraging spending that could be perceived as excessive.
Investment falling in female-led firms
Figures from a Barclays study show that investment in female-led businesses has fallen for the first time. Statistics show that although a record level of investment went into new businesses in 2017, firms with at least one female founder saw the total put into their companies decrease by £1m.
Blue Vision raises $14.5m in funding
London-based augmented reality firm Blue Vision Labs has raised $14.5m of venture capital funding. The funding round was led by GV and existing investors such as Accel, Horizons Ventures and SV Angel.
SocGen deputy steps down
Didier Valet has quit as deputy chief executive at Société Générale, becoming one of the most senior bankers to leave the company over the international Libor rate-rigging scandal. Mr Valet had worked at the bank for 26 years. Separately, the Mail reports that the bank
Ivory Coast digital services launched by StanChart
Standard Chartered is launching its first digital-only retail bank in Ivory Coast. Clients will be offered 70 digital services, including money transfers, bill payments and balance tracking.
The EU’s plan to shift clearing out of London risks disaster
Karel Lannoo, chief executive of CEPS, argues that splitting supervision of clearing houses between Paris, Frankfurt and other continental financial centres after Brexit will threaten stability.
Unite union urges British car plants to go electric
The Unite union has said that the UK’s car parts factories must focus on electric vehicles to avoid thousands of job losses.
Cathay Pacific's first back-to-back loss for decades
Blaming intense competition from low-cost Chinese carriers and higher fuel prices, Cathay Pacific has posted its first back-to-back annual loss since the company was founded in 1946. Losses came to HK$1.26bn ($161m; £115m) for the year to December, the firm said.
Balfour Beatty building handsome profits
Balfour Beatty has posted a hefty rise in annual profit as its turnaround continues. Britain's biggest construction firm made a £117m pre-tax profit in 2017, up from just £10m the previous year, while underlying profits doubled to £196m. Chief executive Leo Quinn said: "These results today demonstrate an amazing transformation and turnaround." The firm suffered a one-off loss of £44m on the Aberdeen Western Peripheral Route project contract as a result of Carillion's liquidation.
Persimmon to unveil new chairman
Persimmon is expected to reveal it has hired Roger Devlin as its new chairman, a month after he took up the same post at William Hill.
Investors back Prudential split, shares rise 5%
Shares in Prudential rose 5% yesterday following the announcement of plans for a break-up. The company said M and G Prudential will break from Prudential plc, with both firms expected to be large enough to list on the FTSE 100. Chairman Paul Manduca noted that the decision followed a “rigorous review that considered all options”. Mike Wells, the group chief executive, insisted the split had "nothing to do with Brexit", nor was it about cutting costs or making large job cuts.
Staff pensions fine for Crest Healthcare
Birmingham-based Crest Healthcare and its managing director Sheila Aluko have pleaded guilty to recklessly providing false or misleading information to the Pensions Regulator about offering staff a workplace pension. Both also admitted wilfully failing to comply with automatic enrolment duties, leading to charges which carry a maximum sentence in a magistrates' court of an unlimited fine.
LEISURE AND HOSPITALITY
IHG expands into luxury market with acquisition
InterContinental Hotels Group (IHG) has picked up a controlling stake in a luxury hotel business, as it ramps up its plans to expand into the top end market. IHG announced it had bought a 51% stake in Regent Hotels and Resorts for $39m (£28m) and will have the right to acquire the remaining 49% in phases from 2026. Regent, which has six sites currently, will grow to a 40-strong chain of five-star destinations under IHG's ownership.
£30m tax bill for drinks firm
Conviviality, owner of Bargain Booze, has revealed that it owes £30m in taxes, forcing it to suspend trading in shares and cancel its dividend. Shares in the firm fell 64% earlier this week.
US firm offloads liabilities to UK lifeboat
The Times reports that Dana, the proposed new owner of GKN’s automotive business, has offloaded its UK pension liabilities into the Pension Protection Fund. GKN struck a $6.1bn deal last week to sell its Driveline automotive business to the American firm. Dana is understood to have offloaded four defined benefit schemes into a new vehicle and injected a lump sum of £47.5m.
MEDIA AND ENTERTAINMENT
Media groups publish gender pay gaps
ITN has revealed its gender pay gap, with women at the news organisation receiving 19.6% less in pay than men and 77.2% less in bonuses. Elsewhere, the Guardian newspaper also revealed its pay gap, with women paid 11.3% less than men.
BT nears deal to shut final salary pension
BT is close to reaching a deal with union leaders to shut its final salary pension, which has funding shortfalls of around £14bn, and transfer workers to a defined contribution scheme.
London office demand soared in February
According to research, office space under offer in Central London rose by 3% last month to 3.7m sq ft. This stood ahead of the ten-year average of 2.8m sq ft and equated to a year-on-year increase of 76%, while take-up increased by 20% to hit 0.6m sq ft. The banking sector saw the largest proportion of take-up at 40%, followed by the creative industries at 23% and the consumer and leisure sector at 14%.
Toys R Us plans to close all stores with 3,000 job losses
After administrators failed to find a buyer for Toys R Us, the chain will shut all 100 of its UK stores, with 3,000 jobs lost. The firm’s most recent accounts revealed an operating loss of £500,000 on sales of £418m.
Unilever set to name Rotterdam as base for new headquarters
Unilever is expected to choose Rotterdam over London as the location of its new unified headquarters, with Brexit critics likely to put the decision down to waning confidence in Britain.
Sportech investors face profit warning and deal failure
Sportech has announced a failure to find a buyer, alongside a profit warning and a new chief executive, Andrew Gaughan. It is estimated that £8m in one-off costs, including a £4.3m payment of share options to former senior staff, will weigh on earnings.
Tax rises of £40bn needed to cut deficit, IFS says
Annual tax rises of £40bn will be needed if the government wants to keep spending constant and balance its books by 2025, according to the Institute for Fiscal Studies (IFS), which warned that poor productivity, earnings and GDP growth had become the norm. Paul Johnson, director of the IFS, said "nothing much" had changed in the Spring Statement: "If high-paid jobs - and EU citizens, who are well represented among high earners in the UK - relocate elsewhere, the consequences for the Exchequer will be severe," he added. The IFS said the tax rises would be needed each year to retain public spending and balance the budget by the middle of the next decade, with an extra £11bn required to cover social care, health and pension costs for the ageing population.
Investment bankers’ health a concern
A large-scale survey of British bank employees suggests that investment bankers consider their jobs more damaging to their health than their business and retail lending counterparts do. The poll of more than 36,000 bankers was carried out by the Banking Standards Board (BSB). Across the sector, 26% of employees on average had a negative perception of their role's effect on their health.
FCA head must watch for bitcoin, Brexit and small businesses
Outgoing FCA chair John Griffith-Jones has identified Brexit, cryptocurrencies and small businesses as the key areas that his successor should focus on.