BANKING
Lloyds ups dividend despite profits miss
Lloyds Banking Group is upping its dividend by 5%, to 3.21p a share, and planning a share buyback of £1.75bn - a total spend of £4bn. The bank saw profits rise 24% to £4.4bn in 2018, although this missed market expectations for £4.6bn. Lloyds also revealed that it had set aside £750m in 2018 for further PPI claims, taking the bank's total provision pot to £19.4bn. Lloyds sold 16m PPI policies since 2000 and has settled or set aside funds for 53% of them. Chief executive Antonio Horta-Osorio said: "Over 2018 the UK economy has proven itself to be resilient, with record employment and continued GDP growth. Although the near-term outlook for the UK economy remains uncertain, our strategy continues to deliver for our customers."
Caps on bankers' bonuses could increase risk
A study by the Bank of England has suggested that capping bankers’ bonuses may increase financial risk rather than curbing it. The Bank mimicked laws introduced by the European Union in the wake of the recession to clamp down on reckless investments, asking participants to make investments with an unlimited bonus, with a capped bonus, or modelling malus rules with a bonus that was dependent on the future success of the project. The Bank found that tough performance targets made all groups take more risky decisions, but it noted that those with capped bonuses became sloppier with their work and did less research before making decisions.
Former Barclays chairman 'not aware' of £280m Qatar deal
Former Barclays chairman Marcus Agius has told jurors he knew nothing about a deal to pay Qatar £280m in fees for helping the bank raise £7.3bn at the height of the 2008 financial crisis. The SFO alleges four former Barclays executives – Richard Boath, John Varley, Roger Jenkins and Tom Kalaris – put together two advisory services agreements in order to disguise Qatar’s demand for larger commission payments.
PCF raises £10m to fund finance growth
Specialist bank PCF has raised close to £10m through a share placing. PCF said the proceeds will be used to fund its organic growth in vehicle and asset finance, and to complete the launch of its property bridging finance pilot scheme.
Standard Chartered fined £102m
The Financial Conduct Authority has fined Standard Chartered £102.2m in relation to its investigation into the bank's historical financial crime controls. In a filing to the Hong Kong Stock Exchange yesterday, Standard Chartered said it was considering its options in relation to the decision.
HSBC investment banking executive to depart
Robin Phillips, the co-head of HSBC’s global banking division, is expected to step down this summer. Mr Phillips was criticised in an internal letter sent to the group’s board last year.
Well-regulated fintech offers salvation to the financial services
Michael Kent, chief executive of Azimo, says fintech has driven down the cost of offering bank accounts, with financial inclusion “rocketing” as a result.
PRIVATE EQUITY
British AI firms lead Europe in VC fundraising
British artificial intelligence companies are attracting almost as much capital as the rest of Europe combined, according to new data. The figures, compiled by Dealroom for industry group Tech Nation, show that in 2018, there were 82 venture capital fundraisings by UK companies, raising a record $1.3bn (£1bn) over the course of the year. This is compared to the 70 deals that raised $1.2bn a year earlier. French businesses in the space, meanwhile, raised $400m in 2018, and German companies $300m.
INTERNATIONAL
UBS to appeal tax fraud fine
UBS has been fined €3.7bn (£3.2bn; $4.2bn) in a French tax fraud case. A court in Paris found that the bank had illegally helped French clients hide billions of euros from French tax authorities between 2004 and 2012. UBS said it had consistently contested any criminal wrongdoing and would appeal against the verdict. The bank had turned down a settlement offer of €1.1bn, choosing instead to fight the allegations in court. The FT’s Lex column argues that a victory would bolster UBS’s reputation for probity and its allure to wealthy clients.
Swedbank shares plunge on link to Danske money-laundering scandal
Swedbank has been drawn into the Danske Bank money-laundering scandal, with broadcaster SVT alleging the Stockholm-based bank may have been used to funnel billions of dollars of suspicious funds.
AUTOMOTIVE
Ford extends deal with The AA
The AA has signed a new contract to sell roadside assistance with Ford, extending by three years a relationship that has been in place for the past thirteen.
AVIATION
Flybe rejects Mesa Air bid
Flybe has rejected a late bid by US airline Mesa Air and Bateleur Capital to gatecrash its 1p-a-share sale to a consortium led by Virgin Atlantic. Flybe dismissed the approach as a "preliminary and highly conditional outline contingency proposal" and "not executable".
FINANCIAL SERVICES
Insurance brokers not harming customers
The Financial Conduct Authority has found no evidence of significant levels of harm during its probe into insurance brokers, meaning that “intrusive remedies” will not be necessary. However, the regulator did identify areas of concern which have scope for improvement, including management of conflicts of interest, the information firms disclose to clients and contractual agreements between brokers and insurers which have the potential to limit competition. The FCA launched its analysis of the wholesale insurance brokers market in November 2017 to assess how competition was working in the sector.
Schroders and Lloyds partner for financial planning venture
Schroders is partnering with Lloyds Banking Group to provide financial planning services through Schroders Personal Wealth. As part of the joint venture, Schroders will take on an £80bn investment contract from Scottish Widows.
Politicians must stand up for the City of London after Brexit
Writing in the FT, Jo Johnson MP argues that politicians are not doing enough to promote the City as a substantial asset for the UK which must be preserved after Brexit.
MANUFACTURING
Manufacturers facing Brexit 'crisis point'
The Confederation of British Industry has warned that the UK manufacturing sector is facing a Brexit “crisis point” after a survey revealed that output growth slowed in the three months to February. In its latest survey of 366 manufacturers, a balance of 7% said that output had risen in the past three months, down from 16% in January.
REAL ESTATE
Intu hit by £1.4bn plunge in property values
Shopping centre landlord Intu took a £1.4bn writedown on the value of its properties in 2018, with its portfolio worth 13.3% less at £9.2bn at the end of a year marked by several high-profile retail collapses and a decline in demand for floor space. The drop in property values saw the company write up a loss of £1.2bn, down from a year-earlier profit of £203m.
RETAIL
Sainsbury’s-Asda merger in jeopardy
Sainsbury’s planned takeover of Asda is on the brink of collapse after the UK competition regulator expressed “extensive concerns” about the undermining of supermarket competition in Britain. The Competition and Markets Authority said it was "likely to be difficult" for the chains to "address the concerns" and also said the merger could lead to a "poorer shopping experience." Analysts at Jefferies said Asda will now represent “an attractive target for private equity.”
ECONOMY
Third of investors fear recession
A client survey by Bank of America Merrill Lynch has found almost a third of European credit investors fear the global economy is heading for recession. Investors’ biggest concern in February was a “global recession”, with 33% of high yield investors and 28% of high grade investors singling out the threat from 18 options.