Virgin Money issues update
Virgin Money has set aside a further £173m of “exceptional items” including £49m of merger costs and £71m of “conduct charges” mostly connected to the PPI scandal. This comes after the bank announced a small profit of £72m for the last six months, compared to a £7m loss for the year earlier period. Chief executive David Duffy remarked: "We are cautiously optimistic about the improving outlook as the impact of the vaccination program in the UK delivers positive revisions to economic expectations.”
Goldman Sachs bankers should return to office in June
Goldman Sachs has told its UK bankers they need to be ready to return to the office in June, according to an internal memo issued on Tuesday. Although the rise in infections in India and Latin America is hampering a return to the office in those regions, the bank said it was "encouraged by the rollout of vaccines" in many places. US bankers should be ready to come back into the office on 14 June, and UK bankers should make plans to be back on 21 June, the memo said.
Barclays investors to get climate vote at meeting
Barclays is to offer a vote on its climate policy at next year's investor meeting, after activists said the firm is not doing enough to reach environmental goals. Chairman Nigel Higgins said the firm plans to devise additional targets after consulting shareholders.
BlackRock hardens push on ESG issues
BlackRock have increased their engagements with companies regarding the environment by 50% in the past year, according to a quarterly update from the private equity giant. The company's stewardship team held almost 1,000 meetings with firms it is invested in, with more than 700 of those relating to environmental concerns, over the first three months of the year. BlackRock also voted against 153 board directors at 138 companies concerning their climate change policies, the figures show.
EU urged to toughen climate finance rules
Campaign group Finance Watch has written to European Commission President Ursula von der Leyen calling for tougher capital rules for banks and insurers involved in environmentally damaging activities. Finance Watch suggested banks apply a risk weighting of 150% to existing fossil fuel exposures. The risk weighting for oil and gas companies can be as low as 20% to 50% due to their high credit ratings but the letter states that the risk of such activities becoming “stranded” or suddenly worth far less due to climate-related events is not factored into bank capital rules sufficiently.
New car market rebounds
The motoring industry showed shoots of recovery in April with a total of 141,583 new cars registered during the month, according to the Society of Motor Manufacturers and Traders. Mike Hawes, SMMT chief executive, said the figures show “there is light at the end of the tunnel [following] one of the darkest years in automotive history”. Sales of battery-powered cars were down slightly, with the relative decline blamed on changes to the plug-in car grant, which was cut by £500 in mid-March and abolished altogether for more expensive models. However, the Department for Transport said the trend for sales of “ultra-low emission” cars was up overall. Separately, motor manufacturers have called on the Government to postpone the ban on petrol and diesel cars for five years stating that 2035 was a more realistic target.
Stellantis says carmakers’ chip shortage will worsen
Carmaker Stellantis has warned that a global shortage of semiconductors will worsen in the second quarter. This comes as revenues at the firm rose 14% to €37bn.
FCA uncovers record number of scams
The Financial Conduct Authority issued a total of 219 warnings about bogus firms last month, as the regulator continues to battle a torrent of fraud online. The warnings cover firms that are illegally selling financial products such as bonds, foreign currency exchange and shares without authorisation, as well as those pretending to be legitimate businesses. The Mail says the number underlines the scale of the challenge facing the FCA in combating financial crime. The paper adds that a group of Britain’s biggest banks, insurers and asset managers have urged the Government to tackle digital fraud in the forthcoming Online Safety Bill. Elsewhere, the Telegraph reports on the suggestion from a crime commission headed by former Downing Street adviser, Sir Michael Barber, that financial services firms and others should have a duty of care to prevent fraud and other forms of economic crime.
Pension funds urged to help UK reach net zero climate goals
Several prominent climate campaigners have written to the Guardian urging pension companies to sign up to green investment principles. The signatories have urged all companies to sign up to the green pensions charter, which requires businesses to ensure their company pension scheme achieves net zero emissions by 2050, as well as setting short-term targets to halve the greenhouse gas emissions associated with their portfolios by 2030. They wrote: “If we want to deliver healthy returns for our retirements, as well as ensure a healthy world for our grandchildren, 2021 needs to be the year that we unleash the power of our pensions … What’s the point in saving for retirement in a world on fire?”
Direct Line reports fall in premium income
Direct Line has blamed a drop in car sales and fewer new drivers for a fall in income. The collapse of the travel sector also contributed, the company said, while the group's roadside assistance brands also suffered. Home insurance provided some relief with premiums up 1.8% in the first quarter.
SEC reviewing short-selling rules
In remarks prepared for a House Financial Services Committee hearing on Thursday, Gary Gensler, the chairman of the Securities and Exchange Commission chairman is expected to suggest tougher regulation for online brokerages and firms that dominate the business of executing stock orders. The SEC has been reviewing shorting rules following January's GameStop saga and the meltdown of Archegos Capital.
UK to scrap derivatives rule
The UK has announced that it will scrap a rule inherited from the EU which aimed to open the listed derivatives market to more competition. The Treasury said it had concluded that open access, originally designed to improve cross-border capital markets in the EU, was not suitable if Britain acted on its own.
Indivior faces shareholder ire over bonus for imprisoned ex-CEO
A shareholder revolt is brewing for Indivior after the London-listed drugmaker maintained bonuses for its former chief executive, despite him being jailed for his role in the US opioid crisis.
Croda up on spin-off talk
Croda jumped to its highest price in almost two weeks after it announced a strategic review of its performance technologies and industrial chemicals businesses. The chemicals group added that demand is strong across all regions and sectors, and it expects trading to continue to improve this year.
Boohoo revenues surge
Fashion retailer Boohoo has posted sales of £1.75bn for the year to February, with adjusted earnings before interest, tax, depreciation and amortisation in line with estimates at £174m. The retailer expects sales growth of 25% in 2021.
Bank of England set to raise economic growth forecasts
The Bank of England is today expected to revise up its GDP growth forecast for the UK economy in 2021 as Britain’s recovery accelerates. The Bank is also likely to keep interest rates on hold at 0.1% and revise down its unemployment projections as the hiring outlook has improved, experts say.
Bankers too tired to take risks before lunch
A study by the University of Cambridge suggests people applying for mortgages should avoid going to banks at lunchtime or just before closing because credit officers are likely to reject them because of “decision fatigue”. The research also showed that if credit officers had based all their decisions on similar criteria to that used in the early morning, they would have collected an extra £360,000 in loan repayments and increased the application rate to 42%.