BANKING
CYBG “puzzled” by failure to win bank grants
CYBG, the owner of Virgin Money, Clydesdale Bank and Yorkshire Bank, has declared that it was disappointed and puzzled after failing to win anything in the first two phases of the disbursement of £775m of money from RBS to boost competition in business banking. CYBG’s CFO Ian Smith said the decision by Banking Competition Remedies to award the first batch of grants to companies including Starling Bank and a joint venture between Clearbank and Tide was particularly puzzling, as they were meant to go to established banking players. He was speaking as the bank revealed a resilient first-half performance. Statutory pre-tax profit came in at £42m for the six months to March, compared with a loss last time of £95m. On a pro-forma basis, CYBG said underlying profits were £286m, down by 5%. The bank added that its integration was making good progress. David Duffy, chief executive, said: “Everything we have seen since completing the transaction, including our exciting engagement with the Virgin Group, has given us further confidence that we can achieve our ambitions.”
Bank of England warned prosecutors against charging Barclays
The Bank of England’s top regulator Sam Woods reportedly warned the Serious Fraud Office in 2017 that charging Barclays over Qatar payments presented a risk to the bank’s safety. Mr Woods questioned whether a charge was in the public interest as it could harm the lender. Despite the Prudential Regulation Authority’s intervention, the SFO charged the bank with conspiracy to commit fraud in June 2017. All charges against Barclays were then dismissed by the Crown Court in May 2018 and the SFO then lost a case to reinstate the charges in October. Four former senior Barclays executives, including former chief executive John Varley, have since faced trial for related offences. A spokesman for the BoE said: “Whether to take a charging decision or not is a matter for the Serious Fraud Office only, and is not one for the PRA.”
Metro Bank shares continue to climb
Shares in Metro Bank have continued to climb amid growing investor confidence ahead of the bank’s £350m capital raise. The stock had plunged as low as 475p on Monday after the bank was forced to quash WhatsApp rumours of fresh financial turmoil. However, they reached 576p yesterday morning as it is expected the bank will reveal a successful fundraising.
MPs condemn Lloyds over pension pot
Ahead of its annual meeting today, MPs have criticised Lloyds Banking Group for failing to cut CEO António Horta-Osório’s pension pot. Mr Horta-Osório’s retirement pot is 33% of his salary, lower than the 46% he previously received but still above the 13% pension contribution awarded to almost every other employee. Rachel Reeves MP, head of the business committee, said: “Investors should take the opportunity to hold pay committees to account and vote against remuneration which includes chief executive pay packages vastly outstripping those of the wider workforce.”
Poorest losing access to free cash machines
A study by the University of Bristol has found that access to free cash machines is declining in some of the poorest communities. The research suggested that bank branches and free cashpoints were concentrated in areas of economic activity. In contrast, cash machines in more deprived areas tended to be owned by firms that increasingly charge people to withdraw their own money.
PRIVATE EQUITY
Nestlé picks EQT group for talks to buy $10bn skincare unit
A consortium led by Swedish private equity firm EQT Partners is poised to enter exclusive talks to buy Nestle’s skincare business.
INTERNATIONAL
German authorities raid banks in offshore tax fraud probe
Eleven banks and eight private homes and offices across Germany have been raided by police and tax investigators as part of a wide-ranging investigation into tax evasion. The eight individuals under investigation are alleged to have founded companies in offshore tax havens aided by a former British Virgin Islands branch of Deutsche Bank.
Goldman Sachs plots South Africa banking expansion
Goldman Sachs is looking to secure a banking licence in South Africa. The US bank then plans to sell more core banking products to clients in the country.
Profits down at Crédit Agricole
Net profits at Crédit Agricole were down 11% at €783 (£662m) in the first quarter. The French bank had to make a higher contribution to the EU's Single Resolution Fund (SRF).
ABN Amro warns of lower earnings
Dutch bank ABN Amro has warned that slower economic growth and low interest rates could hit future earnings. The bank reported net income for the three months to March of €478m, down 20% from the same period a year ago.
AUTOMOTIVE
Aston Martin posts loss
Aston Martin has reported a pre-tax loss of £17.3m against a £2.8m profit the year before. Revenues rose 6% to £196m on the back of a 10% rise in output.
AVIATION
Pilots raised Boeing safety fears months before crash
American Airlines pilots confronted Boeing about potential safety issues in its 737 Max planes in a meeting last November. They urged swift action after the first deadly 737 Max crash off Indonesia in October, according to audio obtained by CBS and the New York Times. Boeing reportedly resisted their calls but promised a software fix. Currently 737 Max planes are grounded worldwide amid concerns that an anti-stall system may have contributed to both crashes.
FINANCIAL SERVICES
NSF pushes ahead with hostile Provident bid
Non-Standard Finance will push ahead with a £1.3bn hostile bid for Provident Financial despite only securing the support of 53.5% of the subprime lender’s shareholders, having declared the deal unconditional. A Provident Financial spokesperson said: “This deal is not done,” adding that regulators “still need to bless this and shareholders should continue to reject this woeful offer.” The proposed takeover is subject to regulatory approval from the Competition and Markets Authority, the Financial Conduct Authority and Prudential Regulation Authority.
AIIB bond boosts London market
The vice-president of the Asian Infrastructure Investment Bank, Sir Danny Alexander, has said the bank has been a boon to London after it raised $2.5bn through a bond issue to invest in the region. Speaking as he opened trading yesterday at the London Stock Exchange, the former chief secretary to the Treasury said: “This is a vote of confidence that London is the [international] centre for bond issuance.”
Cenkos may stick with boss
Cenkos has said Anthony Hotson will remain as CEO for the immediate future after the FCA failed to approve its planned new boss Jim Durkin. Hotson had announced his departure last October after a 90% drop in profits.
Ethical fintech firm secures funding
Soar, which is developing a cloud-based banking platform to be used by credit unions and other not-for-profit banking organisations, has secured a £450,000 research and development (R&D) grant from Scottish Enterprise. The fintech said it will use the investment to develop its offering.
LEISURE AND HOSPITALITY
Pay revolt hits Playtech
Investors in gambling software firm Playtech have revolted against executive pay at the annual general meeting, with more than 40% voting against the remuneration policy and report.
MEDIA AND ENTERTAINMENT
Cineworld maintains guidance
Cineworld has said it is on track to deliver full-year revenue in line with expectations, as it looks ahead to a bumper slate of films later in the year. The cinema chain posted a 9.4% drop in revenue over the first quarter, which it blamed on the timing of major releases such as Black Panther and Avengers: Infinity War in the same period last year.
Acquisitions help Ocean Outdoor to post rise in revenues
Outdoor advertising firm Ocean Outdoor has posted a 14% rise in revenue to £18.6m for the first quarter. The strong growth was driven by the acquisition of Dutch out-of-home advertising firms Ngage Media and Interbest, which Ocean snapped up in a deal worth €51m (£45m).
REAL ESTATE
Tough retail climate hits British Land
British Land has revealed a 4.8% fall, from £13.7bn to £12.3bn, in the value of its assets amid the tough retail climate. Underlying profits dropped 10.5% from £380m to £340m in the year to March 31, while losses before tax hit £319m, swinging from a profit of £501m over the same 12-month period the year prior. The company said that like-for-like rental growth of £15m was enough to offset the £14m impact of retail CVAs.
RETAIL
Asda planning stock market float
Asda could be listed on the stock market after its merger with supermarket rival Sainsbury's was blocked by the competition authorities. Judith McKenna, chief executive of Asda's owner Walmart, told managers at an event in Leeds that the listing was under consideration, although any listing could “take years”. The remarks are the first time that Walmart has spoken publicly about the future of its UK operations since the CMA blocked the deal.
OTHER
BoE equality drive
Joanna Place, chief operating officer at the Bank of England, has said the bank is “well down the road” in dealing with gender and ethnic minority imbalances – despite falling short on most metrics. Figures from the bank showed that the median gender pay gap was 23%, compared with 11.9% for UK employers as a whole. The Bank has set a target of 35% female senior staff by next year and 13% BAME.