Regulators bite into Barclays' profits
Barclays is confident of delivering larger returns, despite pre-tax profits falling 9.5% to £3.1bn over the nine months to September, down from £3.5bn the previous year. The bank blamed the £1.4bn US Department of Justice settlement in March over past mis-selling of mortgages and the £400m additional charge for payment protection insurance claims in the first quarter for the hit. Taking out the fines, pre-tax profits for the period were up 23% to £5.3bn, with underlying profits increasing at both its UK division and international arm, and chief executive Jes Staley said 2018 was “proving to be a year of delivery on strategy at Barclays". The bank reported a rise in pre-tax profits from £1.11bn to £1.46bn in the three months to September 30. Meanwhile, Mr Staley is set to meet activist investor Ed Bramson, whose Sherborne group is pushing for higher investment banking returns and larger shareholder payouts. On Mr Bramson, Mr Staley commented: “He's not yet articulated to the bank what his strategy is.” "We look forward to hearing from him like all our major shareholders," he added.
Metro Bank profits triple
Metro Bank has unveiled pre-tax profit of £39.2m for the nine months to September 30 – a 197% increase on the same period in 2017. The bank revealed a 38% increase in deposits, which hit £14.8bn, and a 52% rise in lending to £13.1bn. Pre-tax profit reached £10m for the three months to September 30, a 113% increase on the same period last year, while revenues rose 34% to £105m. Chairman Vernon Hill noted that the bank now had 1.5m customer accounts and 60 stores. Chief executive Craig Donaldson added: “We delivered double digit growth in deposits, record lending growth year-on-year and for the fourth successive quarter exceeded £1bn in net lending.”
PPI payments hit £3.7bn in 10 months
A total of £3.7bn has been paid out following PPI claims since the Financial Conduct Authority launched its campaign to promote consumer action, with monthly volumes up 40% since the launch. Financial Conduct Authority executive director of supervision, retail and authorisations Jonathan Davidson said: "Since 2011 more than £30bn in redress has been received by consumers."
Card spending hits £10.7bn
UK Finance data shows that consumers spent £10.7bn using credit cards in September - the highest monthly total since records began in 1997. This came in a month where the amount of money placed into savings accounts climbed by 0.9%, the smallest increase since 2007.
Private equity set to surpass hedge funds in assets
Research from data provider Preqin suggests private equity will overtake hedge funds as the largest alternative asset class in the next five years, with assets under management forecast to grow by 58% to $4.9tn.
HarbourVest to open in Dublin
HarbourVest, which has $50bn in assets under management and more than 400 employees, will open a Dublin office as it looks to minimise disruption from Brexit on its clients and funds. The firm’s managing director John Toomey said HarbourVest is not planning to reduce the size of its London office.
Deutsche Bank profits fall 65%
Deutsche Bank saw profits fall 65% in Q3, with net profit hitting €229m. This compares to a total of €649m recorded in the same period in 2017. Revenue in the third quarter fell 9% while costs during the quarter fell 1%. Chief executive Christian Sewing said that despite the dip in profits, the bank is “on track to be profitable in 2018, for the first time since 2014" and said he was "very confident" the bank would meet its 2018 targets. Meanwhile, DWS, a fund manager spun out of Deutsche Bank, has seen adjusted costs fall 7% to €398m.
Commerzbank eyes NordLB stake
People close to the matter have revealed that Commerzbank has made a non-binding offer to take a stake in NordLB. With NordLB looking to boost its capital, Helaba and private equity investors Apollo, Cerberus and Advent have also handed in tentative bids.
Danske whistleblower to testify before parliaments
Howard Wilkinson, the whistleblower who helped to reveal a money laundering scandal at Danske Bank, will testify before the European Parliament and the Danish Parliament. His attorney Stephen M. Kohn said Mr Wilkinson will testify at public hearings in Copenhagen and in Brussels as “all voters in Europe have a right to know what their governments are doing to stop corruption and protect whistleblowers.”
Car production dips in September
Society of Motor Manufacturers and Traders figures show that car manufacturing in the UK fell 16.8% in September from a year ago to 127,051 – this marks the fourth consecutive month where production has declined. Production of cars for the UK market dipped 19%, year-on-year last month, while the number produced for import was down 16.2%. The number of cars made between January and September dropped 6.6% compared with the same period in 2017, to 1.17m.
Flights between UK and EU 'in jeopardy',
Flights between the UK and the European Union after Brexit look increasingly in jeopardy, according to Lucy Chadwick, director general at the Department for Transport. Ms Chadwick told the Public Accounts Committee that agreements on air and rail services between Britain and the EU comprise “an area of growing concern to us”. She added that, whilst UK airlines take advantage of an “open skies” arrangement with the bloc, After Brexit, there is currently no legislation for British carriers nor for foreign airlines to serve the UK – and five months before the leaving date, negotiations over flight rights have yet to start.
Britain’s financial services see world’s biggest surplus
Analysis by TheCityUK shows that Britain's financial services industry had the biggest trade surplus in the world last year, at £68bn. The total is bigger than the US, Switzerland and Luxembourg – the second, third and fourth nations on the list - combined. The research shows that the UK holds 37% of all foreign exchange trading and an 18% share of cross-border bank lending. The analysis also shows that at $10.8tn, the UK's banking sector assets were the largest in Europe last year. Anjalika Bardalai, chief economist at TheCityUK, said: "The UK is not only a leading global financial centre, it is also Europe's financial hub.”
Rothschild to sell trust services business
Rothschild & Co is to sell its trust services business to one of its managers, Richard Martin, who will get financing for the deal from an un-named investor. Alexandre de Rothschild, executive chairman of the bank, said: "Following a strategic review of our private wealth business, we have decided to focus on growing our wealth management operations." He added: “In a changing environment, we believe that the trust business can operate more successfully in an independent structure.”
Blackrock commits to post-Brexit UK
Blackrock, the world's largest asset management firm, has committed to keeping its largest European regional operations headquarters in the UK after Brexit. The firm has received approval to expand its Dutch office as the main legal entity for European client business however, and its Paris office will become an investment hub.
LEISURE AND HOSPITALITY
Heineken holds its own
Heineken, the brewer behind Amstel, Tiger and Strongbow, has kept its forecast for the financial year unchanged, helped by good weather in Europe and positive developments in the US and South America. Net profit stood at €1.6bn (£1.4bn) for the first nine months of the year, up 8% on the same period in 2017.
MEDIA & ENTERTAINMENT
WPP to sell data division
Advertising company WPP is preparing to sell a stake in data investment management division Kantar, a source close to the firm has revealed. The process will be run by Goldman Sachs.
Mortgage approvals fall
Gross mortgage lending fell to £21.5bn in September, according to data from UK Finance, down 1.2% on last year. The number of mortgages approved was down 9.1% year-on-year. Around 37,352 mortgages for house purchases were approved last month, down from 42,581 in August. This marks the lowest level since February and a 10% fall compared with September 2017. Home buyers took an average mortgage of £195,400, down from a peak of £203,800 in May.
Service exports surge
Service exports increased to £72.3bn in the second quarter of 2018, up from £66.9bn in the first quarter, and up from £68.6bn during the same period in 2017, according to the ONS. Exports to the EU increased by more than any other region between the first and second quarter. However, the US remained the UK’s largest single country trade partner, buying £15.2bn of British services in the second quarter. ‘Other business services’ - including legal, accounting and advertising - was the biggest type of exported services, followed by financial services.