Metro Bank chairman planning to step down
Metro Bank has announced that its chairman and co-founder Vernon Hill is to step down. Mr Hill, who will remain a non-executive director, believes the bank has reached an appropriate size and scale to appoint an independent chair. The news emerged as Metro Bank reported a sharp drop in first half profits, following a major accounting error earlier this year which shook confidence in the bank. Customers withdrew £2bn of deposits over the six months to June. Half year pre-tax profits fell to £3.4m from £20.8m a year earlier. The bank warned investors that underlying profitability for 2019 would reflect “income pressure” from the sale of treasury assets, the planned sale of its mortgage portfolio and deposit gathering initiatives during the first half of the year. CEO Craig Donaldson said that despite a turbulent first half of the year, Metro Bank had "delivered a resilient performance with both personal and business current accounts growing…[and] deposit growth returning to normal in June and July”. The lender also revealed that Michael Torpey, a former senior executive at Bank of Ireland, will join the bank’s board this September.
Banks set for biggest mortgage lending period since 2007
High street banks agreed more than £50bn of mortgages to homebuyers in the first half of the year, up 10% on the first six months of 2018 and setting up lenders for their biggest year since 2007, according to data from UK Finance. The loans were offered to almost a quarter of a million homebuyers in the first six months, up 6% on the first half of 2018. The number of mortgages approved for house purchase rose to 42,653 in June, on a seasonally-adjusted basis, up from 42,407 in May and close to April’s two-year high of 42,792. UK Finance said gross mortgage lending in June was 4% lower than the same month last year, at £21.9bn, as a result of a dip in remortgaging. The figures also showed that unsecured consumer credit growth was stable at 4.1%, still well below late 2016 levels of 7.1%. Lenders have become more cautious with customers as a result of actions by the central bank that have encouraged them to tighten lending standards.
Deutsche Bank posts larger than expected loss
Deutsche Bank posted a bigger-than-expected €3.15bn (£2.8bn) quarterly loss as it counted the cost of a radical overhaul including plans to axe 18,000 jobs worldwide. The German lender previously flagged a loss of €2.8bn when it recently announced it is shedding about a fifth of its global workforce, with hundreds of jobs at risk in London. CEO Christian Sewing said: “The past few weeks have been extremely challenging for all of us. Acting quickly means we absorb the financial consequences of the transformation as fast as possible. This has had a major impact on our financial results for the second quarter.” The FT’s Lex states that Mr Sewing deserves credit for moving an ambitious plan forward, but adds that “until profits start to move forward, the bank will remain sunk in shadow.”
Aston Martin slashes sales forecasts
Shares in Aston Martin have dived more than 20% after the luxury carmaker cut its sales forecasts for 2019. The British firm blamed weaker demand across Europe after sales to dealers in the region fell by almost a fifth in the first half of the year. It now expects to sell 6,300-6,500 cars to dealers this year - down from an earlier forecast of 7,100 to 7,300. Aston Martin said sales of its cars to dealerships had fallen 17% in the UK in the first half, year on year, and by 19% in Europe, the Middle East and Africa. It also said it had reined it its investment plans by £40m, despite a continued strong performance in the US and Asia.
Nissan to axe jobs
According to reports, Nissan is set to announce more than 10,000 job losses today amid weakening sales. In the UK, union sources said they hoped the cuts would not affect workers at Nissan’s Sunderland plant. The firm is also expected to announce an around-90% fall in profits for the first quarter of 2019, which would represent one of the carmaker's worst quarterly performances in a decade.
Boeing considers halting production of 737 Max
Boeing has admitted that it could halt production of the 737 Max jet after it reported the company’s largest ever quarterly loss following two accidents involving the plane. The airline manufacturer lost $2.9bn in the three months to the end of June, compared to a profit of $2.2bn for the same period last year. Sales fell 35% to $15.8bn. CEO Dennis Muilenburg said production of the plane could be slowed or halted if regulators do not move to lift the ban on the plane.
Lloyds and SLA agree settlement
Lloyds Banking Group and Standard Life Aberdeen have settled a feud over the management of more than £100bn of assets. The settlement follows a row over Lloyds' decision to withdraw £109bn of assets that was being managed by Standard Life Aberdeen. The detailed settlement, announced yesterday, sees a third of the funds - recently valued at £35bn - retained by Standard Life Aberdeen at least until April 2022. Those are the passive funds, which are less valuable in terms of fees paid, as well as £5bn in real estate assets. The other two-thirds will transfer to Schroder Wealth, a joint venture between Schroders and Lloyds.
Drop in retirement income hits Just Group
Retirement income provider Just Group has said that sales during the first half of the year tumbled 30% to £831m, pushing its shares down 7% to roughly 50p. The group said a “challenging” environment had hit its capital efficiency, as it prepares for new regulations from the Prudential Regulation Authority that requires more capital to be put behind lifetime mortgages.
BGC aims to boost European equity options trading with new platform
BGC Partners has launched a new platform that connects potential buyers and sellers of options on the Euro Stoxx 50 index. Optiver, IMC and Maven Securities have signed up.
Morses Clube names new COO for Shelby
Doorstep lender Morses Club has appointed Gary Marshall as chief operating officer of its subsidiary Shelby Finance.
GlaxoSmithKline’s revenues boosted by shingles vaccine
GlaxoSmithKline has said it expects higher earnings in 2019 than previously thought after sales of vaccines jumped 23% in the second quarter of the year. The higher vaccine sales of £1.6bn were mostly due of GSK’s shingles vaccine Shingrix, sales of which jumped to £386m in the US in the second quarter.
LEISURE AND HOSPITALITY
Marston’s sees sales dip
The pub operator Marston’s has reported like-for-like sales growth at its managed and franchised pubs rose by 0.5% in the 42 weeks to July 20. However, the company said that it had seen weaker sales in the past 16 weeks. Ralph Findlay, Marston’s chief executive, said: “We have achieved modest growth during the 42 weeks to date continuing the long term positive like-for-like sales trend despite May and June being hampered by relatively poor weather.”
MEDIA AND ENTERTAINMENT
The streaming market is heading for saturation
Ahead of the imminent entry of Disney+ and the BBC/ITV joint venture, and despite Netflix's wins against many local services, the FT editorial board describes a near-saturated streaming market.
Competition authority to probe JD Sports’ Footasylum takeover
The Competition and Markets Authority has begun its probe into JD Sports’ acquisition of Footasylum. The competition watchdog will decide whether to refer the merger for a phase two investigation by September 19.
British services exports climb
Office for National Statistics figures show that exports of British services have risen by almost a fifth in the past three years, with firms in the sector selling £68.7bn of services overseas in the first quarter. This marks a 19% increase on the total recorded in Q1 2016. Non-EU countries accounted for £41.3bn of Q1 exports – with the US buying £16bn of services, making it the biggest market for UK firms. Some £27.4bn of exports went to EU countries.
Johnson hands out leading roles
Boris Johnson has given key cabinet roles to leading Brexiteers after becoming the UK's new prime minister. Sajid Javid has been named as the new chancellor, while Dominic Raab replaces Jeremy Hunt as Foreign Secretary and Priti Patel becomes Home Secretary. Meanwhile, Michael Gove leaves behind his environment brief to become Chancellor of the Duchy of Lancaster, Gavin Williamson heads to Education and Liz Truss is named as the Department for International Trade Secretary. Health Secretary Matt Hancock and Work and Pensions Secretary Amber Rudd are among the few ministers who backed Remain who have kept their jobs. Earlier, in a speech outside Downing Street, Mr Johnson listed a wide range of domestic ambitions, chiefly a promise to sort out care for the elderly "once and for all". He also pledged to improve infrastructure, recruit 20,000 new police officers and "level up" school spending. He promised reforms to ensure the £20bn in extra funding earmarked for the NHS “really gets to the front line”. On Brexit, the new PM said he had “every confidence” the UK would leave the EU in 99 days’ time with a deal, but preparations for the “remote possibility” of a no-deal Brexit would be accelerated.