BANKING
Profits rise at Secure Trust Bank
Secure Trust Bank has reported a jump in profits by 31.3% in the first six months of 2018 to £15.1m. Underlying profits at the challenger bank rose by 36.4% to £16.5m. The lender grew its loan book by 25.9% year-on-year in the first half to £1.8bn, and signed up its millionth customer as numbers increased by almost a third. CEO Paul Lynam said the lender’s improved results showed its move away from unsecured credit since last year was “paying off”. He also said that a sudden economic downturn could yet damage rivals exposed to the riskier end of the market. He said: “We think some others are mis-pricing risk in unsecured credit - that’s why we are not in that market.”
HSBC shifts European branches to French unit
As Britain prepares to leave the EU, HSBC has moved ownership of its Polish and Irish subsidiaries from its London-based entity to its French unit. The bank will do likewise for its branches in Belgium, the Czech Republic, Ireland, Italy, Luxembourg, the Netherlands and Spain. CEO John Flint said earlier this week that the bank has not yet begun transferring any of the up to 1,000 staff it has said it could ultimately move to its French arm from Britain.
Nomura prepares for “no deal” Brexit
Nomura has reportedly written to clients informing them how the bank will move their business relationship from London to Frankfurt as it prepares for a “no deal” Brexit. It is understood that trading clients based in the EU are being asked to prepare for the move, which would allow the Japanese bank to continue serving clients even if current trading arrangements break down. Nomura said it expects that its EU operations will be ready for trades and transactions with clients in the first quarter of 2019.
Bramson calls for Barclays' McFarlane to step down
Activist investor Ed Bramson, who holds a 5.4% stake in Barclays, has called for chairman John McFarlane to step down from the bank. Bramson, backed by Invesco, Columbia Threadneedle, Aviva, Fidelity, Janus Henderson, Jupiter and Schroders, has previously told investors he wanted Barclays to shrink its investment bank and return cash tied up there to shareholders.
City needs to help regional business to thrive
Alison Rose, chief executive of commercial and private banking at RBS, writes in City AM that financiers must look to offer the same funding opportunities to businesses in the regions as they do in London. She says that we need to ensure that SMEs maintain the ability to innovate and expand, regardless of whether they are based in Louth or London. Ms Rose adds that the UK's regions need to be at the heart of the City's strategy to boost Britain's business environment.
PRIVATE EQUITY
Truell set to increase Tungsten stake
Disruptive Capital Finance, the private equity firm founded by Edi Truell, is expected to confirm today that it has upped its stake in Tungsten Corporation, the electronic invoicing company that he founded, from 12.4% to 13.07%. Mr Truell stepped down as CEO of Tungsten in 2015 after becoming frustrated with the board's lack of willingness to make big investments.
INTERNATIONAL
ABN Amro to cut 250 jobs in investment bank
ABN Amro is to cut 250 jobs in its corporate and investment bank. The Dutch bank also said it would reduce risk-weighted assets in the unit by €5bn to €34bn.
US regulators warned against reducing bank capital requirements
The Systemic Risk Council in the US has warned regulators against reducing bank capital requirements saying the proposals should be modified to protect financial resilience.
AUTOMOTIVE
Musk in talks to take Tesla private
Tesla’s board has confirmed that it will consider a proposal by CEO Elon Musk to take the company private. A statement was issued by six members of the carmaker’s board after Mr Musk suggested he had the funding to de-list the company. The statement said that the board had “met several times over the last week” to discuss going private.
AVIATION
Ryanair cancels flights
Ryanair has announced 250 more flight cancellations due to an anticipated walkout by German pilots tomorrow. The walkout follows a 96% majority vote by Ryanair pilots employed in Germany in favour of a strike, announced on 30 July, in a dispute over pay and conditions.
CONSTRUCTION
Construction firms build on profits
Bellway has warned that slowdown in house prices has put pressure on margins. However, the housebuilder said revenue increased 16% to nearly £3bn in the 12 months leading up to 31 July, compared with £2.5bn in the same period last year. Elsewhere, Morgan Sindall said profits were boosted by big improvements in its Construction and Infrastructure division. Adjusted operating profits soared 28% for the six months up to 30 June to stand at £31.9m. Revenue received a 9% boost to £1.4bn.
FINANCIAL SERVICES
Pru making “good progress” on demerger
Prudential has said it is making “good progress” on the demerger of its M&G Prudential arm as it announced rising profits in the first half. Group operating profit reached £2.4bn in the first half, up 9% year-on-year on a constant exchange rate basis. Growth in Asia was one of the main drivers of Prudential's profits, which rose by 14% year-on-year in the first half. Asian new business profits rose by 11% to £1.1bn.
Insurer warns of rise in fraud
Toby van der Meer, chief executive of Hastings Group, has warned of a sharp rise in fraud, saying that the motor insurer had broken up 33 crime rings so far this year. The warning came as Hastings announced its half-year results, which showed adjusted operating profits rising 22% year-on-year to £105m, with net revenues up 9% at £376m. Hastings said its gross written premiums increased by 5% to £486m. Separately, reinsurer Munich Re has reaffirmed its full-year guidance after revealing profits rose 20% to €1.55bn in the first six months. Net income for the three months ending June hit €728m.
Thomson Reuters on the acquisition trail
Thomson Reuters is on the hunt for acquisitions after reporting a 2% rise in quarterly revenues to $1.3bn. Operating profit at the information provider was down by 6% to $204m. The company agreed in January to sell a 55% stake in its financial and risk unit to Blackstone. It expects to use $1bn to $3bn of the proceeds to make acquisitions in the legal and accounting sectors.
Quilter passes shareholders £220m
Quilter, which was spun out of South African parent Old Mutual, is to pass shareholders £221m in the form of a special dividend of 12p after selling Old Mutual Global Investors to a private equity firm. Presenting strong half-year results, ahead of a raft of major sports events, chief executive Paul Feeney said customers ploughed an extra £3bn into the firm in the first six months.
ICAEW urges financial services to recover ‘clear sense of purpose’
Philippa Kelly, head of financial services at ICAEW, argues that conduct and cultural change is now required as the financial services industry has lost sight of its essential functions - money and payments, storing value, financing, investment and risk management. ICAEW has set out a blueprint for improvements, including suggestions that financial incentives are less influential than we might imagine and that commonly accepted financial targets may actually drive bad behaviour.
New CFO for Moneysupermarket
Moneysupermarket Group has appointed Scilla Grimble to the board as CFO, subject to regulatory approval. She succeeds Matthew Price who is to step down on 31 October.
LEISURE AND HOSPITALITY
Paddy Power Betfair plays down FOBT cut
Paddy Power Betfair has said it can withstand the government's plan to cut the maximum bet on fixed-odds betting terminals [FOBTs] to £2. The gambling firm made the statement as it reported a 4% rise in first half profits to £106m. “Our shops are more profitable, and outperform on sports betting, enabling them to better withstand the impact of lower machine stakes limits,” the company said.
Luxury hotelier Belmond to review possibility of sale, shares jump
The board of luxury hotel owner Belmond is reviewing the potential sale of the company. Belmond has hired Goldman Sachs and JPMorgan as financial advisers.
MEDIA AND ENTERTAINMENT
21st Century Fox sees revenues rise
21st Century Fox saw its revenue rise more than 17% in the fourth quarter. Revenue at the firm reached $7.9bn (£6.1bn) in the three months to the end of June, from $6.75bn in the same period last year. Profits nearly doubled to about $920m, helped in part by a lower US tax rate.
RETAIL
Homebase expected to announce store closures
Hilco Capital, the new owner of Homebase, will next week detail plans to close around a quarter of its stores, threatening over 1,000 jobs, according to reports. Hilco, which acquired the DIY chain from Wesfarmers in May, is expected to outline proposals for a CVA that would close roughly 60 of Homebase's 249 stores.
REAL ESTATE
Supply shortage could push rents up 15% says Rics
Rents could rise 15% by 2023 as the supply of new rental properties dries up, according to a survey by the Royal Institution of Chartered Surveyors. It said small scale landlords are pulling out of the market due to tax changes brought in last year which have made buy-to-let investments less profitable. The proportion of lettings agents reporting falling instructions outweighed those who said they were getting more properties to rent by a margin of 22% – the weakest outlook in the survey’s near-20 year history.
ECONOMY
Sterling slumps amid no-deal fears
Fears of a no-deal Brexit have pushed down the value of sterling to below $1.29 for the first time in a year. Analysts said the decline in sterling would push up inflation and lead to a renewed squeeze on living standards at a time when support for the government's handling of Brexit has fallen sharply.
Brexit fails to make long-term impact on London economy
The Centre for London has issued a report claiming that the capital’s economy has largely coped with the effects of the Brexit vote, with activity and employment increasing faster there.
OTHER
169m old pound coins yet to be returned
Millions of old pound coins are yet to be returned - despite them no longer being legal tender, the Royal Mint has said. According to the company, more than 169m round pound coins have not been given back almost nine months since they went out of circulation.
Radio choice …
In Business, Radio 4, 8.30pm. Ruth Sunderland talks to leading players in the banking industry to hear how those who want to manage people's money are full of new ideas, but face huge uncertainty about what banking will become.