BANKING
Future financial services trade must “respect EU regulatory autonomy”
Michel Barnier has warned that any future trade in financial services “must respect EU regulatory autonomy”. The EU's chief Brexit negotiator met yesterday with ECB representatives including President Mario Draghi and vice President Vitor Constancio, alongside his European Commission colleague Valdis Dombrovkis, who is in charge of financial stability and financial services. The group discussed the impact Brexit would have on the sector, with Mr Barnier tweeting subsequently: “EU financial services market is built on a single rulebook and integrated supervision. Future EU-UK relationship must respect EU regulatory autonomy.” Meanwhile, the Single Supervisory Mechanism has urged lenders to speed up their Brexit plans, warning that they could have less than five months to secure licences to continue operations within the EU.
BoE reappointments
The Bank of England has reappointed Alex Brazier in his role as executive director, financial stability, strategy and risk, for a further three-year term as a member of the Financial Policy Committee (FPC). His current term had been due to expire in March. The Chancellor, Philip Hammond, also announced that Don Kohn and Martin Taylor will be reappointed as external members of the FPC.
PRIVATE EQUITY
Carlyle latest PE group to post upbeat earnings, AUM
Carlyle said economic net income for 2017 came in at $1.01, beating a consensus estimate of 65 cents. The private equity group posted distributable earnings of $156m, when the expectation had been $131m.
European venture capital groups struggle to attract investors
Data from PitchBook shows that the total capital raised by Europe’s venture capital groups fell by a quarter to €7.4bn amid growing uncertainty about the outcome of Brexit negotiations.
INTERNATIONAL
Australian regulator granted sweeping powers
Australia’s financial regulator has been granted sweeping powers to cap bank bosses' pays, delay their bonuses and even ban them from the industry if found guilty of non-compliance. The Australian Prudential Regulatory Authority can cap and delay executive bonuses, disqualify executives from the industry and levy fines of up to A$210m ($166m). A spokesman for the Australian Bankers' Association said banks “take executive accountability very seriously which is why they supported the government's initiative in this area”.
QNB secures syndicated loan
Qatar National Bank has announced it has secured a $3.5bn three-year syndicated loan for general corporate purposes. The syndication, which comprised 21 international banks, comes as QNB seeks to secure new funding lines in the wake of a dispute between Qatar and Saudi Arabia, the UAE, Bahrain and Egypt.
AUTOMOTIVE
Nissan to discuss post-Brexit concerns
Nissan has confirmed it will be joining a Downing Street roundtable with Japanese investors to discuss their concerns about trade after the UK leaves the EU. “Nissan Europe chairman Paul Willcox will join representatives from other Japanese companies in meeting the Prime Minister and chancellor on Thursday to discuss our operations and investments in the UK,” the car manufacturer said in a statement.
AVIATION
Strong start to the year for Lufthansa
Carsten Spohr, group CEO of Lufthansa, has said that the German carrier has had a strong start to the year for ticket sales, as he unveiled a new look for the group's namesake brand. Mr Spohr said the focus this year would be on its premium strategy at Lufthansa, Swiss and Austrian airlines, plus rapidly growing budget arm Eurowings to fill the gap left by insolvent German rival Air Berlin.
CONSTRUCTION
Handelsbanken suffers Carillion losses
Handelsbanken UK has revealed that it has suffered SEK556m (£50m) worth of loan losses due to the collapse of Carillion. The lender was one of several that arranged a £790m revolving credit line for the construction group prior to its collapse under the weight of £15bn worth of debts. Last month Santander UK said it had lost close to £200m on loans to Carillion, with analysts estimating the total damage across the British banking sector could top £1bn.
Redrow builds on revenue
Redrow said it built 2,911 homes in the six months to December 31, 14% higher than the same period in the previous year, which, along with a higher average selling price of £309,800, pushed revenue up 20% to a first-half record of £890m. Pre-tax profits rose 26% to £176m. The housebuilder also hit a record level for its order book, worth £1.05bn at the end of December, 5% up on the previous year.
FINANCIAL SERVICES
ABI lays out post-Brexit trade framework
The ABI has put together a framework for future trade agreements with non-EU countries that could be inserted directly into future trade agreements on financial services as they are negotiated, providing the Treasury and Department for International Trade with a series of proposals that would help the sector “secure Britain’s prosperity after Brexit.” They include relaxing rules on foreign ownership and regulations on data transfer over borders, so firms can assess risk abroad to underwrite it and also allow them to compete on long-term savings products in a larger number of countries. Hugh Savill, the ABI's director of regulation, said the framework would “help maintain London’s position as an international centre for insurance.”
Cryptocurrencies unlikely to survive the coming decade
The head of Goldman Sachs’s global investment research division has predicted that the majority of today’s cryptocurrencies are unlikely to survive the coming decade. Steve Strongin said that while it is possible that today’s cryptocurrencies will exist in five or 10 years, it is not probable. He reasons they will be replaced by something better. Mr Strongin said that because of a “lack of intrinsic value”, the currencies that do not survive the next few years “will most likely trade to zero”.
Plus500 granted SA licence
Plus500 has been granted an operating licence by South Africa’s market regulator. The Financial Services Board handed the licence to a new South African subsidiary set up by the spread-betting company after an application made by its Australian division.
Cboe says Vix products not to blame for market rout
JPMorgan and Goldman Sachs have both reduced their ratings on Cboe Global Markets to neutral from buy, citing that the collapse of two popular exchange-traded products could drag down profits for the exchange operator.
Star analyst Huw van Steenis leaves Schroders
Huw van Steenis has left Schroders, just a year after he left Morgan Stanley to join the asset manager.
HEALTHCARE
GSK CEO calls for swift transition deal
Emma Walmsley, CEO of GlaxoSmithKline, has urged the government to sign a two-year Brexit transition deal within two months to minimise disruption to medicine supplies. Ms Walmsley also called for zero tariffs and minimal customs procedures post-Brexit so that drug makers could be sure of “getting the right medicines to the patients”.
DCC moves into US healthcare sector
DCC has acquired Elite One Source Nutritional Services, a US-based manufacturer of tablets, capsules and powders for consumer healthcare, for $50m (£35m). The deal increases the UK support services company’s health and beauty division, which manufactures products for brands including GlaxoSmithKline, PZ Cussons and The Body Shop, by 30%.
Sanofi expects to clinch deal to sell European generics unit in Q3
Sanofi expects to agree the sale of its European generics business in the third quarter. Bidders for the unit include Advent International, BC Partners, Carlyle Group, and a consortium of Blackstone and Nordic Capital.
LEISURE & HOSPITALITY
Carlsberg profits lose fizz
Carlsberg has posted a fall in profit to DKr 1.26bn, down from DKr4.49bn in 2016, while revenues inched up 1% to DKr61.8bn. In the UK, sales fell 6% on 2016.
REAL ESTATE
House prices dip again
House prices fell for a second consecutive month in January, leaving the average price of a home at £223,285, a dip of 0.6%, according to the Halifax. Prices fell 0.8% in December, stunting annual house price growth to 2.2%, its slowest rate in six months. Halifax’s Russell Galley noted household finances remain under pressure as consumer prices continue to grow faster than wages, while Jonathan Samuels, chief executive of property lender Octane Capital, said: “High inflation and low economic visibility amid ongoing Brexit negotiations are holding the property market to ransom.”
ECONOMY
Skills shortages pushing up starting salaries
According to a monthly survey by the Recruitment and Employment Confederation, starting salaries for people moving to new jobs are climbing at the fastest pace in more than two and a half years as employers struggle to find the staff they need. “The UK is plagued by labour, skills and talent shortages,” Kevin Green, the REC’s CEO, said. “This increasing competition for good quality staff is driving up starting salaries, with employers willing to pay higher wages to attract the right people.
OTHER
One in four households has no savings
A survey has revealed that nearly one in four households has no emergency savings pot. Some 24% of people in the UK said that, excluding pensions and insurance policies, they have no savings they can quickly access if needed - the European average is 29%, according to the ING International Survey of 15 countries.