HSBC found to be complicit in Hong Kong human rights abuses
A report by the UK’s All-Party Parliamentary Group (APPG) on Hong Kong accuses HSBC of denying pension payouts to Hong Kong residents who fled the country after China’s crackdown on pro-democracy supporters. The bank is complicit in human rights abuses through its decision to follow a directive from the Hong Kong government to refuse to recognise the British National Overseas (BNO) visa as valid identification and therefore deny Hong Kong residents access to their savings. APPG chair, Alistair Carmichael MP, said banks including HSBC had “been complicit in the repression of the human rights of innocent Hong Kongers… [and] cannot continue to act with impunity.” HSBC said in a statement that it respected human rights and “like all banks, we have to obey the law, and the instructions of the regulators, in every territory in which we operate”.
Zopa plots swoop on parts of fintech rival DivideBuy
UK-based digital bank Zopa is planning to acquire parts of a fintech rival DivideBuy days after raising £75m from investors to accelerate its growth. DivideBuy is a buy now pay later provider backed by US-based Davidson Kempner Capital Management.
Hundreds face job cuts at Nationwide
Nationwide Building Society is planning to cut around 450 jobs as the company looks to streamline some non-member facing roles. A spokesperson said the cuts will enable the building society to "increase investment in the value and service we provide our members".
Bank of London maintains $1.1bn valuation with fresh funding
The new London-based clearing bank The Bank of London revealed on Wednesday that it has secured a fresh $40m funding injection as it gears up for full operations after winning its banking licence last month.
Earning drop for KKR amid decline in asset sales
KKR has said that fourth-quarter after-tax distributable earnings dropped 42% year-on-year, driven by asset sale declines in its private equity portfolio and lower transaction fees in the capital markets division. After-tax distributable earnings, which represent the cash available to pay dividends to shareholders, fell to $821.8m from $1.4bn a year earlier. According to Refinitiv, that resulted in after-tax distributable earnings of 92 cents per share, which exceeded the average analyst forecast of 86 cents per share. The private equity firm said its income from carried interest, which consists of profit from asset divestments, fell 66% to $194m in the fourth quarter. Transaction fees from its capital markets business fell by 55% to $144.4m. KKR's income from investments made out of its balance sheet dropped 34% to $223.2m.
Société Générale drawn into SEC messaging probe
The investigation by the US Securities and Exchange Commission into the use of unauthorized communication channels has been expanded to include Société Générale, according to the lender's annual report released on Wednesday. The French lender's US unit received an information request from the SEC “focused on compliance with record-keeping requirements in connection with business-related communications on messaging platforms that were not approved by the firm,” it said. US regulators have already announced more than $2bn in total penalties in the matter, and have expanded their probe to include hedge funds and asset management firms. The bank reported a 35% drop in fourth-quarter profit yesterday, as the bank increased provisions for bad loans fivefold in expectation of customers struggling to repay debts.
Credit Suisse plans $380m bonus scheme for top staff tied to overhaul
If top executives at Credit Suisse can pull off a radical restructuring designed to restore the fortunes of the scandal-hit bank they will be rewarded with a share of a SFr350m ($380m) bonus pool.
ABN Amro shares up after buyback announced
Shares in ABN Amro rose 5% on Wednesday to their highest level in 3 years after the bank announced a €500m share buyback. The Dutch lender reported a net profit of €354m for the last three months of 2022.
JPMorgan to hire more small-business bankers
JPMorgan Chase plans to hire more than 500 bankers catering to small businesses over the next two years, the company said on Wednesday. The new hires will boost the bank's workforce serving small enterprises by 20% from more than 2,300 currently.
Barratt reveals signs of recovery in buyer demand
Barratt Developments says it has seen a “modest uplift” in reservations this month, in the first early signs of a recovery in homebuyer demand as mortgage rates start to ease back. However, the housebuilder said its net reservation rate remains 46% lower year-on-year since the start of January.
City of London to produce review of financial services reforms
The City of London Corporation is to conduct a review in financial services regulations and tax rules in an attempt to stake out a long-term strategy to “reinforce and renew [London’s] global position.”
Bayer appoints Roche veteran Anderson as chief executive
Roche’s former head of pharmaceuticals Bill Anderson has been appointed CEO of Bayer, replacing Werner Baumann at the end of May, almost a year before his contract expires.
LEISURE & HOSPITALITY
McDonald’s signs deal with UK equalities watchdog over sexual harassment complaints
McDonald’s has signed a legally binding agreement with the UK’s Equality and Human Rights Commission to improve its handling of sexual harassment claims following a wave of complaints from staff. It comes after the Bakers, Food and Allied Workers Union (BFAWU) revealed in 2019 that some 1000 McDonald's workers in the UK were being subjected to a “toxic” work culture and alleged that NDAs were being used to silence victims of sexual harassment. McDonald’s has promised to introduce measures including communicating a “zero tolerance” approach to sexual harassment, providing anti-harassment training for its employees, and improving policies to better respond to complaints. Alistair Macrow, chief executive at McDonald's Restaurants in UK and Ireland said: “As one of the UK's leading employers, the safety and wellbeing of our people is our absolute priority. It is hugely important to me that everyone in our organisation feels safe, respected and included at all times – this is core to the values of our business.”
MEDIA & ENTERTAINMENT
Disney to axe 7,000 jobs in $5.5bn cost-cutting plan
The Walt Disney Company on Wednesday said it would cut about 7,000 jobs as part of a “significant transformation” announced by chief executive Bob Iger. The job cuts amount to about 3% of the entertainment company’s global workforce and are part of a targeted $5.5bn saving across the company. Disney said on Wednesday that it earned $1.28bn in the three months to December 31, up from net income of $1.1bn a year earlier. This comes despite its first ever drop in subscriber numbers and $1.1bn of losses in its streaming division. Disney has suffered a slump in its share price and is facing a high-profile proxy battle with activist investor Nelson Peltz, who has built up a $900m stake through his Trian Partners.
CMA issues provisional block on Microsoft's takeover of Activision Blizzard
The Competition and Markets Authority (CMA) has issued a provisional ruling opposing Microsoft's planned takeover of games developer Activision Blizzard. The $69bn (£57bn) deal would see Xbox-maker Microsoft acquire hit titles such as Call of Duty and Candy Crush. The CMA said it would result in higher prices, fewer choices and less innovation. The US Federal Trade Commission (FTC) has already moved to block the deal on similar competition grounds, with a hearing due in August.
Alphabet shares fall sharply after Google’s AI chatbot debut stumbles
Microsoft’s beefed up AI-powered Bing search engine is posing a threat to Google’s search dominance, reflected in an 8% slump in parent company Alphabet’s share price on Wednesday. Google’s delayed response to the launch of the ChatGPT AI system over two months ago has left Microsoft with a rare chance to claim a technological edge as the search market faces its first big change for years.
Number of high value properties located outside London rises
The number of £1m-plus homes located outside of London has reached a record high, according to new analysis. Thanks to the pandemic-driven race for space, there are now 730,390 homes valued at £1m or more, a rise of 40% compared with the beginning of 2020. The number of homes worth £1m or more has surged by more than half in all regions of the UK since the beginning of 2020, with the exception of London. Wales recorded the biggest rise, with the number of prime properties jumping by 146% over the three-year period to 4,899 in 2022. In the south west of England properties worth more than £1m more than doubled, rising by 104% to almost 52,000. Prime property sales were driven largely by hotspots in north Somerset, Devon and Cornwall. In Scotland, property millionaires surpassed 10,000 for the first time in 2022 – more than half of which are located in Edinburgh. While London recorded the smallest percentage rise in £1m properties between 2020 and 2022, an increase of just 14%, the capital still has the highest number of prime homes in the UK.
Survey finds inflation adding £18.2bn to UK non-food retail sales
A new report reveals that non-food retail sales values are expected to hit £249bn in 2023, but the 2.6% increase – or an additional £18.2bn of spending on last year – will be driven entirely by rising consumer prices. The survey of over 730 retail businesses across eight international markets found that 80% of retailers are planning to increase the price of products, with 40% suggesting rising costs will be their biggest challenge this year. It also found 66% say inflation is their biggest concern, while 74% plan to change their buying behaviour, with 34% saying they would only make necessary purchases while 29% intend to delay or reduce spending. This means that UK retail sales volumes are set to fall by 4.9% on last year due to shoppers having to spend more to get less for their money, with retail inflation expected to hit 7.5% over the year ahead. The study also found that more than a quarter of retail firms plan to increase the cost of delivery for their customers, while just 18% said they would not increase the price of products, delivery, or returns this year.
UK economy may just skirt a recession
The National Institute of Economic and Social Research (Niesr) said the UK is likely to avoid a recession this year but warned that the rising cost of living meant it would still feel like a recession for millions. Niesr said one in four UK households - some seven million families - would be unable to fully cover their and food and energy bills in the 2023-24 financial year, up from around one in five in 2022-23. Middle-income households would also face a hit to their disposable income ranging from 7% to 13%, reaching up to £4,000 this financial year, it said. Niesr predicts the economy will grow by just 0.2% this year, and 1% in 2024. The Bank of England said last week that the UK is set to enter recession this year, but the downturn would be shorter and less severe than previously expected. It predicts the slump will now last just over a year rather than almost two.