HSBC set to unveil strategy shift
HSBC is set to undertake a strategy overhaul which could see the bank carry out a new round of job cuts targeting senior managers and reduce its presence in some smaller markets. It is understood that the changes are expected to be part of a strategy update by interim chief executive Noel Quinn on 18 February. Mr Quinn is also likely to unveil plans to boost the bank’s profits outside Asia while reiterating HSBC’s commitment to invest more in China. But HSBC will not name a permanent chief executive when it reveals the strategic overhaul - a move the FT says could undermine investor confidence in the plan to reshape the lender.
Contactless crackdown could baffle consumers
Experts have warned that an EU crackdown on contactless payments could cause mass confusion for millions of customers and trigger a €57bn (£48bn) hit to businesses across Europe. The new Strong Customer Authentication (SCA) rules require banks to verify a customer's identity every time they make payments totalling €100 (£85). If customers breach this limit through repeated contactless card payments, they will be forced to type their pin into a machine. But a report published by 451 Research and commissioned by payments company Stripe estimates that €57bn of payments across the EU will be abandoned because of the extra checks.
Investor group pressures Barclays over climate policies
Barclays is under increasing scrutiny over its financing of fossil fuel producers, as it emerged that The Investor Forum has reportedly held talks with the lender over its climate policies. Climate change was already set to be centre stage at Barclays’ AGM in May, after a group of shareholders filed a landmark resolution demanding the lender tighten its environmental policies.
RBS banking app fails to comply with EU rules
RBS has asked users of its banking app Bó to destroy their cards because they fail to comply with new EU banking rules. RBS said customers who joined the app before January 3 will be sent a new card and their original one will stop working on March 14.
Cashpoint shift saves banks millions
Research from Which? reveals the amount paid by consumers to withdraw cash jumped by £29m to £104m last year, as many free machines vanished. The shift in the cashpoint network has saved banks £120m since January 2018, according to figures from Link.
Vanguard partners with HarbourVest to enter PE industry
Vanguard and HarbourVest have announced a strategic partnership to provide investors with access to private equity. The new strategy will initially be provided by Vanguard Institutional Advisory Services (VIAS) to pensions, endowments and foundations.
Private equity became too focused on money, says Guy Hands
Buyout industry pioneer Guy Hands has said private equity has “got too insular”, with dealmakers too focussed on how much money they make.
Credit Suisse investors back Thiam in board battle
Credit Suisse CEO Tidjane Thiam has been backed by three of the bank’s top shareholders in a power struggle with chairman Urs Rohner, which has intensified after a spying scandal at the Swiss bank.
BNP Paribas cuts profitability target
BNP Paribas has cut its target for profitability this year and warned revenue from its retail networks in Europe could decline due to low interest rates. The French lender’s return on tangible equity was lowered to 10% from 10.5%. However, net income for the fourth quarter rose by 28.2% to €1.85bn, while revenue increased 11.5% to €11.33bn.
Fintech lending set to top £300bn by 2023
The global fintech lending industry is expected to be worth more than $390bn (£300bn) by 2023, according to data gathered by LearnBonds.com.
Lookers makes leadership changes
Car dealership chain Lookers has made a number of changes to its senior leadership, with Mark Raban and Cameron Wade announced as the firm’s CEO and chief operating officer, respectively.
ASA grounds Ryanair ads
The Advertising Standards Agency (ASA) has banned a series of “misleading” Ryanair adverts after the company claimed to be Europe's "low CO2 emissions airline". ASA ruled that the budget airline broke rules on environmental claims and misled consumers in its press, TV, and radio ads from September 2019. Separately, the FT reports that Qatar Airways is in discussions to acquire a 49% stake in Rwanda’s national airline as it looks to expand operations in Africa’s fast-growing aviation market. Elsewhere, Dubai International Airport has revealed it has maintained its title as the world's busiest for international travel for the sixth year in a row. The airport, home to long-haul carrier Emirates, saw 86.4m passengers in 2019, 6m more than second-placed Heathrow Airport in London.
Electric car queries soar over UK plan to ban polluting vehicles
Auto Trader has revealed that online searches for electric cars rose 162% above average levels after the government announced plans to ban petrol and diesel car sales by 2035.
Mixed bag for housebuilders
Barratt Developments completed 8,314 new homes in the first half of the financial year, marking a 9.1% rise on the same period in 2018. The housebuilder also revealed it has paid out over £17m for work at “legacy properties” and other sites following the Grenfell Tower fire in 2017 and subsequent amendments to Building Regulations. In its half-year results, Barratt also said revenues and profits ticked up 6.29% and 3.7% to £423m respectively. Elsewhere, Redrow reported that first-half pre-tax profits fell 15% to £157m. The rival housebuilder blamed political uncertainty around Brexit and last year’s election for a fall in completions and a 10% decline in revenues to £870m for the six months to the end of December.
Financial services deal is crucial for Britain and Europe
Writing in the Telegraph, chief executive of the Investment Association Chris Cummings says there is a need for a close relationship between the UK and EU on financial services. He suggests the establishment of a joint UK-EU financial services committee would provide a solution to institutionalise rule making, while respecting each other's freedom to regulate. Elsewhere, the FT’s leader says diverging from all EU directives is not worth the cost of losing all access to European markets.
Kohn calls for stress testing to go beyond banking sector
An external member of the Bank of England’s Financial Policy Committee has called for bank stress testing to extend beyond the banking sector. Donald Kohn told the European Central Bank’s stress testing conference in Frankfurt that the BoE was looking at opening up stress testing to hedge funds and open-ended funds.
UBS and BlackRock warm to EM after long US stock rally
UBS Global Wealth Management and the BlackRock Investment Institute are calling time on the longest US bull run in history, saying emerging market stocks offer better value and superior growth prospects.
GSK set to break up
GlaxoSmithKline has announced details of ambitious demerger plans that would see its consumer healthcare joint venture with Pfizer spun off through a London Stock Exchange listing in 2022. The standalone consumer merger would be valued at around £40bn, which would make it one of the 20 most valuable companies in the FTSE 100. GSK has also said profit grew to £8.9bn last year, a 3% rise on 2019, despite a 16% fall in the final quarter to £1.8bn.
LEISURE AND HOSPITALITY
CMA probes gambling merger
The Competition and Markets Authority (CMA) is to open an investigation into a planned £10bn gambling merger between Flutter and the Stars Group. The CMA will examine whether the tie-up between Paddy Power and Betfair owner Flutter and Toronto-based Stars will stifle competition.
Smurfit Kappa unpacks full-year profit
Smurfit Kappa has announced it has returned to profit in its full-year results. The packaging business said profit before tax for the year to 31 December was €677m (£571m), compared to a loss of €404m the previous year.
MEDIA AND ENTERTAINMENT
Spotify subscribers music to the ears
Spotify grew monthly subscriber numbers to 271m in the fourth quarter, up 31% year-on-year, with paid subscribers up 29% to 124m. Total revenue for the period jumped 24% to €1.9bn (£1.6bn). However, operating expenses soared 80% in the period due to social charges — payroll taxes linked to stock based compensation — and the firm posted a loss of €77m.
LinkedIn chief executive Jeff Weiner to step aside
Jeff Weiner is stepping aside as chief executive officer of LinkedIn after more than a decade.
Poundland sale 'almost inevitable’
Andy Bond, chief executive of Pepco Group, which owns Poundland, has acknowledged that it's “almost inevitable” that owner Steinhoff will sell the business. Three private equity firms, Advent International, Hellman & Friedman and Mid Europa Partners, are reportedly considering a bid for Pepco.
UK services sector surged in January
A new survey has revealed that the UK services sector surged in January. The IHS Markit/Cips index of services activity hit 53.9 in January, its best reading since September 2018. It was well above an earlier estimate of 52.9 and far higher than the 50 registered in December. A score of above 50 indicates expansion, and January’s reading was the first time the sector had grown since August 2019. Meanwhile, the pace of job creation reached its strongest since July 2019 last month, meaning services firms have taken on employees for three months in a row.