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Daily News Roundup: Thursday, 24th May 2018

Posted: 24th May 2018


City cool on Barclays and Standard Chartered merger speculation

City investors and analysts have questioned the rationale for any merger between Barclays and Standard Chartered, following speculation that Barclays was considering merger options. “We see absolutely no strategic logic or rationale behind such a transaction,” Edward Firth, an analyst at Keefe, Bruyette & Woods, said. Meanwhile, Ian Gordon, an analyst at Investec, said the mooted merger seemed “far-fetched” and “makes absolutely no sense to us” adding “we struggle to see any material upside on a 'standalone' view, and do not see any obvious strategic fit with Barclays.” The FT says that whatever the pros and cons of any deal between Barclays and Standard Chartered, it is evident that the appetite for European bank deals is returning.

RBS community bankers a ‘PR exercise’ - residents

RBS plans to introduce community bankers in towns earmarked for branch closures have been labelled a "PR exercise" by residents in Grantown, Aviemore and Beauly, among other places. John Grierson, chairman of Aviemore and Vicinity Community Council, noted: “They would be far better if they left the bank open for people to go in to. I don't see anything positive in it at all. They need to rethink their strategy.”

Cryptocurrency focus for Revolut

Revolut is strengthening its focus on cryptocurrencies, in a move which flouts the approach to Bitcoin taken by traditional lenders recently. Vlad Yatsenko, the firm’s chief technology officer, noted that demand for both the Ripple and Bitcoin Cash currencies was “overwhelming” even as the cryptocurrency boom wanes.


Thousands of jobs at risk at Deutsche Bank

Deutsche Bank is considering cutting 10,000 jobs across the globe, with redundancies focused on the lender's investment bank. Chief executive Christian Sewing had earlier indicated that he planned to make "significant" job cuts.

Julius Baer's AUM hits record

Julius Baer has said assets under management (AUM) rose 3% in the first four months of 2018 to a record SFr401bn Swiss francs ($404bn). "The rise in AUM came on the back of continued net inflows as well as a positive currency impact, the latter mainly following the strengthening of the US dollar in April," the Swiss private bank said in a statement.

M&A activity could involve thousands of US banks

Conditions for dealmaking among US banks are believed to be looking better than at any time since the financial crisis, with higher interest rates and lower taxes increasing profits.

Reminder from EU bankers on threat from big tech

Bankers in the EU are stepping up calls for regulatory scrutiny of big technology companies, which they view as encroaching on the financial services industry.

Unsecured lending urged at US banks

The Office of the Comptroller of the Currency is urging US banks to expand into short-term, small-dollar lending.


Sales put the brakes on JLR profits

Jaguar Land Rover has reported a drop in profits after slower sales growth and rising business investment. Annual pre-tax profits fell to £1.5bn from £1.6bn the year before, and fourth-quarter profits almost halved from £676m to £364m. Annual sales grew 1.7%, helped by strong demand in China; however, UK sales dropped 12.8% to 108,759 car, which the firm attributed to "consumer uncertainty surrounding diesel models, Brexit and vehicle taxation". European sales also fell. However, overall car sales in the year to 31 March increased 1.7% to 614,309 cars compared with the previous year.

BMW computer system contains flaws

A Chinese cyber security lab has claimed that BMW's car computer systems have been found to contain 14 separate flaws. They could, in theory, let hackers take at least partial control of affected vehicles while in use.

Uber stems losses to see valuation rise to $62bn

Uber has announced a tender offer that values the firm at $62bn, as it stemmed its losses under chief executive Dara Khosrowshahi.


IAG buy-up downgraded

IAG, owner of British Airways, could encounter problems if it moves forward with its takeover interest in Norwegian Airlines, according to HSBC.


UK staff bonuses cut at RSA while boss receives £1m

An internal outcry has forced RSA to backtrack on plans not to pay staff a bonus, after it was revealed that chief executive Stephen Hester received a bonus of £1m. The company then agreed to pay bonuses of between £600 and £800.

Chairwoman at St James’s Place retires

Wealth manager St James's Place has announced that its chairwoman Sarah Bates will retire, to be succeeded by senior independent director Iain Cornish.

Brexit-ready Brussels outpost approved for Lloyds

Lloyd's of London has gained approval from Belgium's central bank to open a subsidiary in the country, with its new Brussels office able to sell new policies in the EU.

First female president for NYSE

The New York Stock Exchange has appointed Stacey Cunningham its first female head, effective from tomorrow.


Cau rescue plan for Gaucho

Seeking to solve the poor performance of its Cau brand, Gaucho, the steak restaurant chain, could be sold in its entirety by Equistone Partners. A Gaucho spokesperson commented: “Having completed a strategic review and engaged with key stakeholders, the directors have instructed advisers to commence an options process. The process aims to secure a viable long-term structure for the business. This may or may not lead to a sale.”

Strike for Hollywood Bowl as debt halved

A rise in the number of customers has seen Hollywood Bowl halve its debt pile, with chief executive Stephen Burns noting that debt was reduced from £13.5m to £7.2m in the first half of its financial year.


ZTE revenues down on US sanctions

Chinese telecoms equipment maker ZTE Corp has reportedly lost more than $2bn in revenue since a ban on the supply of US components came into force in April.

Sony survival plan based on data and AI

Sony's chief executive Kenichiro Yoshida has said that data and artificial intelligence lie at the core of its survival plan.


ONS: Housing market continues to cool

Figures from the ONS show that UK house price growth continues to slow, particularly in London, which saw its weakest performance since 2009, with prices down 0.7%. The ONS said that the decline in the capital can be linked to changes in stamp duty as well as the Brexit vote. In the year to March, average house prices across the UK increased by 4.2% to £224,000, the ONS said. This was £9,000 higher than in March 2017. The annual growth rate slowed from a 4.4% rise in February. Compared with February, prices decreased by 0.2%, or £500.

ZPG profits up ahead of £2.2bn US takeover

ZPG has reported increasing profits as it prepares for a £2.2bn takeover by Silver Lake Management. The firm reported a 31% rise in pre-tax profits to £29.5m in the six months to 31 March, with sales rising 33% to £156.9m.


M&S profits slide

Marks & Spencer has reported a sharp fall in annual profits as it revealed a deterioration in clothing sales and costs associated with store closures. Pre-tax profits at the department store chain fell by 62% to £66.8m after a £514.1m bill for restructuring costs that included £321m to pay for the first phase of its store closure plan. M&S said clothing sales in stores that have been open more than a year fell by 3.4% in the fourth quarter as trading was hit by poor weather. That compared with a decline of 2.3% in the previous period. Sales in M&S’s food halls also declined, with underlying sales down 0.6% in the three months to March 31.


Forecast of interest rate rise eroded by April inflation dip

Inflation in the UK was lower than expected last month, dealing a blow to predictions of an interest rate rise in August from the Bank of England. Alistair Wilson, head of retail platform strategy at Zurich, commented that UK inflation is “finally heading in the right direction for savers”.

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