BANKING
Charges in the UK drag down profit at Santander
Banco Santander’s net profit slumped during the third-quarter as one-off charges in the UK blighted the lender. The Spanish bank reported attributable profit of €501m (£432m) in the last three months, 75% down on the same quarter a year ago. The UK arm saw profits down 43% to £785m in the first nine months of the year with near record-low mortgage rates hurting income, a £169m PPI hit and restructuring costs of £127m. However, growth in the US and Latin America helped reduce the impact of a difficult European market.
Falling mortgage rates aiding first-time buyers
Despite the Bank of England increasing interest rates twice in the last 18 months, mortgage rates for first-time buyers are getting cheaper. The average five-year fixed-rate mortgage with a small deposit has fallen from 4% a year ago to 3.65% at present, according to research by Moneyfacts, while in the same period the average two-year rate has dropped from 3.63% to 3.27%.
NatWest offers counselling to gamblers
NatWest is to offer counselling sessions for gambling addicts inside branches, even if they are not NatWest customers. Mike Kenward, the development director of GamCare, said the charity would also help to train NatWest staff to support customers who wanted help to stop betting.
PRIVATE EQUITY
Nordic arm of Thomas Cook rescued
Norwegian property tycoon Petter Stordalen and private equity firms Altor and TDR Capital are to buy the Nordic business of Thomas Cook. The deal will save 2,000 jobs and see nearly £500m injected into the business.
INTERNATIONAL
StanChart posts a solid set of results
Standard Chartered reported that adjusted pre-tax profits climbed 16% year-on-year to $1.2bn (£900m) during the last quarter, 17% ahead of consensus forecasts. Revenue grew in its Hong Kong franchise despite the ongoing pro-democracy protests across much of the city. CEO Bill Winters flagged a “more challenging external environment” due to slowing global growth, the US-China trade war, and low and falling interest rates. The bank said it was maintaining its target to hit a 10% return on tangible equity by 2021. The FT’s Lex says investment costs are set to increase in Q4 and the weakness from Hong Kong will show up with a delay - a “prevailing pressure system” is bearing down on the shares.
Deutsche Bank shares down as losses hit €832m
Deutsche Bank shares fell nearly 8% after the bank reported an €832m third-quarter loss hurt by restructuring costs and weakness in fixed-income trading. The German lender announced plans in July to scale back its global ambitions and insists its restructuring is on track and reaffirmed targets for its core business. The WSJ says if Deutsche is to be convincing, it “must not only execute on cost savings and divestitures, but also deliver revenue growth in its core businesses. It has disappointed investors many times before.” The FT’s Lex is less than optimistic, urging investors to “stay clear of this wipeout”.
Japanese bank Daiwa to pay $150m after losing negligence case
The UK’s Supreme Court has ruled that Daiwa Capital Markets Europe must pay damages of more than $152m for its “negligence” in processing a transaction that was evidently suspicious. The case raises the prospect of a much higher duty of care burden for financial institutions when it comes to dealing with corporate clients.
Wealth management boosts Credit Suisse's profits
Credit Suisse's wealth management arm helped row in double profits during the last three months. The Swiss lender posted net profits of SFr751m for the third quarter, up 108% on the same period a year ago, with its wealth management division's performance up 5% on inflows from high net-worth clients of SFr9.5bn.
Citi plans to withdraw from two-thirds of foreign exchange platforms
Citi, the third biggest forex dealer, plans to reduce the number of systems it uses to connect with customers by two-thirds by Q1 next year saving the bank millions of dollars a year in costs.
AUTOMOTIVE
UK car production falls further
UK car production fell by 3.8% in September, due to political uncertainty at home and weaker overseas demand, according to the Society of Motor Manufacturers and Traders. Overall car output for the year-to-date plunged 15.6%, making it the weakest three quarters since 2011.
Franco-Italian merger could redraw global autos industry
French giant PSA, which owns Peugeot, Vauxhall and Citroën, has confirmed that it is in £40bn merger talks with Fiat Chrysler in “one of the world’s leading automotive groups”. The deal would potentially create a Franco-Italian autos giant to rival Toyota, VW and Hyundai.
AVIATION
Muilenburg slammed over Boeing’s response to 737 failures
Boeing chief executive Dennis Muilenburg has been attacked by US senators over the two fatal crashes of its 737 Max jets. During a Capitol Hill hearing on aviation safety and the future of the company’s 737 Max airliner, lawmakers accused Muilenburg of turning the 737s into “flying coffins” for concealing information about the aircraft’s defective flight control system.
Airbus’ delivery target stalls
Aerospace giant Airbus has revised its full-year commercial jet delivery target amid continuing delays at its newly-expanded Hamburg plant in Germany. The firm hopes to deliver around 860 airliners in 2019, down from 880-890 as previously targeted. Quarterly revenue fell one per cent to €15.3bn and net income rose three per cent to €989m.
FINANCIAL SERVICES
City hopeful of a Johnson victory
The majority of City institutions have welcomed the prospect of Boris Johnson winning the general election with a rise in the pound reflecting the view that the threat of a no-deal Brexit had receded. Kallum Pickering, chief economist at Berenberg, said investors would be cheered by a Johnson administration. However, Capital Economics said a Tory government would deter business investment by continuing to keep a no-deal Brexit on the table until 2020 while a Corbyn-led government would offer the hope to exporters of remaining inside the EU following a second referendum.
Standard Life Aberdeen to pay full parental leave
Investment firm Standard Life Aberdeen (SLA) will from next year offer all of its employees nine months of fully-paid leave when they become parents, and one year’s total leave, irrespective of gender, family situation, or how long they have worked for the company. Under the new policy SLA employees will have the option to take the full year’s leave in one go, or in three separate blocks over two years.
UK sets up Islamic finance taskforce
The UK is seeking to be at the forefront of Islamic finance with the creation of a new international taskforce to engage the industry with the UN's Sustainable Development Goals. Economic Secretary to the Treasury John Glen said the new initiative, which will be based in London and run by the Glasgow-based Islamic Finance Council UK, will "drive forward innovation around the world".
HKEX boss challenges ‘one country, two systems’ framework
Hong Kong stock exchange boss Charles Li has challenged the territory's “one country, two systems” framework under mainland China. Speaking at the London Metal Exchange’s annual dinner, the comments from the chief executive of HKEX, which is attempting to cement its position as the west’s gateway into China, follow concerns about the exchange's autonomy from Beijing in relation to its failed £32bn bid for the London Stock Exchange.
Woodford's frozen fund outperforming benchmark
Neil Woodford’s suspended Income Focus Fund has outperformed the FTSE all-share benchmark in the last two weeks. Link Fund Solutions, which is managing the frozen fund, said returns had grown 1.39%, while its benchmark return index increased 1.10%, though it's considering “indications of interest from several investment managers” to replace Woodford as manager.
Bud to re-focus product stream
HSBC-backed fintech Bud is to make its platform open to businesses from all sectors. The company, which passes financial data made available through Open Banking legislation to banks in order to help them innovate, is undergoing a reorganisation involving the loss of 20 jobs and a shift towards sales and engineering.
Modulr boosts Scots sector with £20m investment
Business-to-business payment specialist Modulr is to invest around £20m in the Scottish fintech industry. The cash will fuel the creation of 50-plus highly skilled jobs and “further boost Scotland's growing prominence as a tech hub".
HEALTHCARE
Pfizer buy boosts GlaxoSmithKline’s sales
GlaxoSmithKline has posted group sales of £9.4bn for the third quarter, along with total operating profits of £2.1m, up from £1.9m for the same period last year. The drug manufacturer, driven by vaccines and the acquisition of Pfizer’s consumer healthcare business. raised its forecast for 2019 and now expects profits to be flat.
General Electric raises cash flow outlook as healthcare unit improves
General Electric has raised the cash flow outlook for its industrial business by $1bn, to between zero and $2bn, ahead of a potential sale of its Biopharma division.
MANUFACTURING
De La Rue issues another profit warning
Struggling passport maker De La Rue has again lowered its profits expectations, wiping over 20% from the its value. The firm, which is struggling to win new contracts, is also currently facing a Serious Fraud Office investigation into a suspected corruption case in Africa.
MEDIA & ENTERTAINMENT
The future’s bright for publisher after buyout
Future, the owner of Classic Rock magazine, is buying the TI Media magazine stable for £140m from British private equity firm Epiris. The TI media deal adds Decanter, Country Life, Wallpaper, Woman & Home, Golf Monthly, TV Times and Horse & Hound to Future's portfolio.
Nikkei loses $29m in alleged money transfer fraud
Japanese financial media giant Nikkei has lost $29m in a suspected transfer fraud which landed in Hong Kong. The firm fell victim to a scammer impersonating a senior manager.
REAL ESTATE
Brexit uncertainty dragging down commercial property market
Political uncertainty over Brexit has led to widespread pessimism in the commercial property market, according to nearly two-thirds of surveyors. A survey by the Royal Institution of Chartered Surveyors showed that 67% of respondents believed the commercial property market is in a downturn.
ECONOMY
Political turmoil and personal finances damaging consumer confidence
The GFK consumer confidence index fell from -12 to -14 in October as shoppers’ uncertainty continued to be knocked by Brexit and the state of their personal finances. Optimism about personal finances fell from 4 to 1 and is now close to negative territory, while pessimism about the general economic outlook fell from -35 in September to -37. Consumers cut back on big-ticket purchases, with the "major purchase index" falling from 3 to 1 in October.
OTHER
Election forces wait for Carney’s successor
A replacement for Mark Carney at Threadneedle Street is unlikely to be announced until after the general election with only four working days left before the election "purdah" starts. Meanwhile, Sir Paul Tucker, the former Bank of England deputy governor who was beaten to the job in 2013 by Mr Carney, has emerged as a possible contender.