Lloyds hails 'landmark' year after return to private sector
Lloyds Banking Group has reported strong full year profits in its first year as a fully private enterprise. Pre-tax profit for 2017 was £5.3bn, 24% higher than a year earlier, and the bank's highest profit since 2006. Chief executive António Horta Osório said it had been "a landmark year", and announced that the bank planned to spend up to £1bn buying back shares. Lloyds, Britain's biggest mortgage provider, also said it would invest £3bn in new technology and staff as part of a three-year plan focused on expanding its digital services. "Our customers want better products they want more convenience. They want safer products," Mr Horta Osório told BBC Radio 4. He said the bank planned to lend an additional £6bn to small businesses in the UK over the next three years and provide £10bn more to first time buyers.
Metro Bank reports first annual profit
Metro Bank has reported its first annual profit, driven by a boom in residential mortgages and strong commercial lending. The challenger bank said it had made a pre-tax profit of £20.8m during 2017 compared with a £11.7m loss a year earlier. However, Metro said it was scaling back its plans to open new branches. The bank, which operates across London and the south of England, is now aiming for 100 branches rather than the 110 it had previously intended to open. It would still open 12 branches this year, creating 900 jobs, it said.
Deutsche Börse eyes UKs euro clearing
The new CEO of Deutsche Börse has said that the Frankfurt stock market operator will be aiming to win a quarter of the euro clearing business that takes place in London. Theodor Weimar said that Brexit offered an opportunity for Frankfurt to "build a credible alternative to London". Elsewhere, payments company Currencycloud has applied for a regulatory licence in the Netherlands due to prolonged uncertainty over the UK's post-Brexit policies on immigration and passporting rights.
Strong growth in Scotland’s mortgage market
UK Finance figures show that there were 8,800 new first-time buyer mortgages completed in Scotland in the fourth quarter of 2017, an increase of 3.5% on Q4 2016. The value of loans to first time buyers was up almost 10% to £1.01bn, while the average loan to a first-timer was £106,000 in the last three months of 2017. The data also shows that there were 9,100 new home mover mortgages completed in the same period - 8.3% up on the same period in 2016.
Green light to Deutsche Bank HQ
Land Securities has received the all-clear from the City of London Corporation for its development at 21 Moorfields, which will become the UK headquarters of Deutsche Bank. Meanwhile, Bank of America has extended the lease on its City headquarters. A spokesperson said that the bank had extended its lease by 10 years to 2032.
NatWest testing "digital human"
NatWest is testing a "digital human" called Cora to answer basic banking queries. Customers could in future have a two-way talk via computer screen, tablet or mobile phone.
US proposes overhaul of ‘too big to fail’ regime
The US government is to propose a new “Chapter 14” bankruptcy process to ensure creditors and not taxpayers pick up the bill for bank collapses.
AA share price plunge
AA shares have closed 28% down after the firm warned that its full-year profit will fall short of analysts' expectations. The roadside recovery and insurance group expects underlying income to reach between £335m and £345m for 2019. City analysts had forecast that profit would hit around £390m.
Barratt announces profit climb
Barratt Developments has announced record profits as demand for new homes across the UK soars. The building firm posted half year pre-tax profits that were up 6.8% to £342.7m, while revenue rose 9.5% to £1.99bn for the six months ending December. Demand for new homes has been fuelled by cheap mortgage rates and the Help-to-Buy loan scheme. “There is high demand for new housing across the country, supported by attractive market fundamentals,” said chief executive David Thomas. The firm also detailed that in 2017 it spent £641.2m on new land over 51 sites, almost doubling the £382.2m it spent in 2016. Meanwhile, Barratt has said it will not seek to build any new homes in central London due to falling prices in the capital. It also revealed that it is considering relocating its construction block manufacturing operations from Germany to the UK to mitigate the possible impact of Brexit.
MPs wave Randell’s appointment through
MPs have approved Charles Randell as chairman of the Financial Conduct Authority, despite his admission of making an "error of judgment" when he invested in an alleged tax avoidance scheme. The Mail notes that Chancellor Philip Hammond was not informed that Mr Randell had used a tax avoidance scheme and was forced to repay £114,000 plus interest to HMRC. Despite some objections, Treasury Select Committee chairman Nicky Morgan said MPs were assured there were “no other aspects of his personal tax affairs that might cast his judgment into further question” and waved his appointment through.
Temenos agrees Fidessa deal
Temenos has agreed a £1.4bn acquisition with London-headquartered software firm Fidessa, with shares trading above the offered price after Elliott Capital Advisors disclosed an increased stake.
MPs launch inquiry into cryptocurrencies
The Treasury Select Committee is to examine whether bitcoin and other digital currencies need to be regulated over fears they could worsen "market volatility, money-laundering and cybercrime".
UK antitrust body’s initial decision on investment consultants due in July
The Competition and Markets Authority has said it plans to publish a review into the investment consultancy industry in July. The review comes after the FCA flagged “serious concerns” about the industry last year.
UK start-ups growing by 30% every year
The UK’s 500 most successful start-ups over the past six years have grown at an annual rate of 30% a year, according to analysis by SyndicateRoom and Beahurst. Those that went on to an IPO grew at an even faster rate of 43% while fintech firms grew the fastest of all, achieving an annual growth rate of 63%.
LEISURE AND HOSPITALITY
AccorHotels closes property deal amidst record earnings
Accorhotels has announced that the long-delayed sale of a stake in its property unit is being finalised and said the deal will give it greater financial leeway to accelerate growth and fight off competition. The firm also announced that revenues climbed 7.7% to €1.94bn in 2017, with earnings before interest, tax, depreciation and amortisation up 8.1% to €626m.
Unite to raise £170m in London return
Unite Group plans to raise £170m in funding for two developments in Oxford and London - its first scheme in the capital in five years. The company is developing a project with Oxford-Brookes University to build 887 rooms in the city, and with King’s College London for around 1,000 rooms. The funds will be raised via placing of 22.2m shares, around 9.2% of its total market capitalisation.
HKICIM pledges 41% stake as collateral
Hong Kong International Construction Investment Management Group (HKICIM), the real estate unit of Chinese conglomerate HNA Group, has pledged around 41% of the company as collateral for a loan from Hong Kong private equity firm PAG Holdings. This comes soon after a deal that saw HKICIM sell two Hong Kong land parcels to Henderson Land Development for $2bn.
Uptick in jobless rate a “blip”
The UK unemployment rate rose to 4.4% from 4.3% in the three months to December - the first increase in almost two years. However, the ONS noted that the numbers of people in work continued to rise over the quarter while the number of people classed as economically inactive fell. "The rise in unemployment looks like a blip, although it will still instil some caution on the Bank of England’s MPC," said Samuel Tombs of Pantheon.