BANKING
NatWest returns to majority private ownership
NatWest has returned to majority private ownership, more than 14 years after it received a massive bailout by taxpayers following the financial crisis, after the Government sold a further £1.2bn worth of shares back to the bank, diluting its stake in NatWest below 50%. The latest move takes the Government's stake in NatWest, which peaked at 84% in 2009, down to 48.1%. NatWest chief executive Alison Rose called the moment an "important milestone", while John Glen, economic secretary to the Treasury, said it was a landmark moment. The move would be a "good use of capital for the bank and our shareholders", said Ms Rose. "Reducing government ownership below 50% is an important milestone for NatWest Group and a further demonstration of the progress we are making as we continue to deliver for our customers and shareholders," she said.
Barclays to take £450m hit
Barclays has said it expects to make a £450m loss over the mishandling of US securities in 2019, with the discovery of the error delaying a £1bn share buyback programme as it is investigated. The bank announced that it had offered and sold too many structured notes and exchange-traded notes and that they will have to be repurchased at the price the bank sold them to customers. Barclays issues these securities to meet “actual and anticipated client demand” for such securities but said they had been oversupplied to the market for about one year, giving certain customers the right to cancel contracts.
HSBC cuts references to war
HSBC has reportedly removed references to a “war” in Ukraine from research reports. The bank's committees that review all research sent to clients have amended multiple reports to soften the language used on the subject, including changing the word “war” to “conflict”, according to the FT.
NatWest small business bank Mettle gains fivefold increase in customers
NatWest’s digital bank for small business customers, Mettle, has had a fivefold jump in users since the start of 2021 as the pandemic drove a wave of new business creation.
PRIVATE EQUITY
Private equity giants snap up women's health firm
Carlyle Group and PAI Partners have snapped up women's pharma business Theramex from CVC Funds for around £1.2bn. Theramex has already achieved double-digit revenue and earnings growth since it was formed in 2018 and serves more than 6m women in 57 countries, it said in a statement.
Private equity group TPG spots opportunities after tech rout
US private equity group TPG has reported improved earnings on rising AUM with CEO Jon Winkelried confident that current disruptions in the technology market will provide investment opportunities in due course.
INTERNATIONAL
Credit Suisse cuts Russian exposure
Credit Suisse will stop pursuing new business in Russia and slash its current exposure to the country, the bank has announced. The move comes as US lawmakers open a probe into the bank’s compliance with US sanctions. The US congressional committee on oversight and reform has raised concerns following a report that the bank had asked investors to destroy documents related to its richest clients’ private jets and yachts.
UniCredit shareholders urged to vote against Orcel pay
Glass Lewis has recommended investors reject UniCredit’s remuneration policy next week due to what the proxy adviser called “excessive” entitlements for CEO Andrea Orcel.
AVIATION
UK aerospace R&D receives fresh funding boost
The Government has announced that Britain’s Aerospace Technology Institute will receive £685m in taxpayer funds over the next three years in a boost to R&D in the aviation industry. Separately, British Airways has taken delivery of its first batch of sustainable aviation fuel made from used chip fat and the contents of household bins. Sean Doyle, chief executive of BA, said: "Progressing the development and commercial scale-up of sustainable aviation fuel will be a game changer and crucial to reducing the aviation sector's reliance on fossil fuels."
FINANCIAL SERVICES
FCA risks hampering crypto innovation
City AM reports that many crypto firms are withdrawing from the Financial Conduct Authority’s temporary register for digital asset service providers and seeking approval in Europe as a 31 March deadline for the regulator to approve firms approaches. Just 33 crypto firms have made it onto the FCA’s register, with 80% of applications rejected or withdrawn. Many key players in Britain’s crypto industry including Revolut, Copper, and Blockchain.com remain in limbo on the temporary register while they await the regulator’s final decision. City AM notes that firms regulated in jurisdictions considered to have equivalent standards to the UK can continue to serve UK customers. But Charles Kerrigan, a fintech partner at law firm CMS, said a hostile regulatory environment for crypto “could harm the UK’s reputation for innovation.”
Probes into senior manager misconduct dwindle
The Financial Conduct Authority (FCA) opened just six enforcement investigations into senior manager misconduct last year, less than half the number launched a year prior. Data gleaned from a freedom of information request by the consultancy firm Bovill revealed the drop, which has come in spite of 50,000 additional firms being added to the Senior Manager and Certification Regime (SMCR). “In recent years we have questioned SMCR’s ability to hold individual senior managers to account, pointing to consistently low numbers of investigations and enforcement actions,” said Ben Blackett-Ord the chief executive at Bovill. “This year’s statistics show that SMCR currently lacks bite and is not biting often enough to be considered as an effective enforcement tool.”
City needs greater socio-economic diversity
Catherine McGuinness, the chair of the City of London Corporation’s Policy Committee, writes in City AM on the importance of getting more people from lower socio-economic backgrounds into senior positions in the City. “Breaking down socio-economic barriers to progression in our financial services sector is key to ensuring the Square Mile becomes even more competitive on the world stage. Improving diversity in the boardroom helps to prevent groupthink as well as foster innovation.”
Backing Aviva is the best policy, UBS says
Aviva was one of the biggest movers in London on Monday after UBS laid out the investment case for the insurer. Analysts at the bank think Aviva has the potential to generate up to £350m of excess capital, in addition to ordinary dividends, each year in the medium-term.
BlackRock wins massive investment mandate for insurer AIG
AIG plans to hand over management of up to $150bn of fixed income and private placement assets to BlackRock as the US insurance giant prepares to split off its life and retirement business.
RETAIL
Profits double at Asda
Asda has reported that statutory pre-tax profits rose to £1bn for the year to end of December 2021, more than double the £469.2m of 12 months earlier. The results were helped by a £394.5m sale and leaseback of its distribution centres, while operating profits increased by 42.5% from £486.5m to £693.1m, helped by £187m fewer COVID-19 costs.
Ted Baker rejects Sycamore takeover proposals
Ted Baker has confirmed it has rejected two unsolicited non-binding takeover proposals from private equity firm Sycamore Partners Management for significantly undervaluing the company.
ECONOMY
Bank of England expects 1970s-style energy shock
Bank of England Governor Andrew Bailey has warned of a further slowdown in UK growth as the country faces a “shock from energy prices this year…larger than any single year in the 1970s.” The increase in the price of energy and other goods and services would likely cause growth and demand to slow, Bailey said, explaining that this pressure on demand is expected to weigh down on domestically generated inflation. “For that reason we do expect inflation to return to target, two years or so out from now.” Analysts expect the Bank to raise interest rates to 1% in May, but Bailey said inflation could go either way. There was a high degree of uncertainty facing the UK economy, Bailey continued, adding: “We’ve got a pandemic followed by a European war, in any scale that is a very difficult position to be in for policy.”
OTHER
Lobbyists for hostile states will need to be registered
Ministers are expected to announce the introduction of a Counter States Threat Bill which will require lobbyists working for states hostile to the UK to sign a “foreign influence” register or face time in prison. The move comes as the Government scrambles to rebuild the City’s reputation as the war in Ukraine and sanctions against key Russian influencers highlight London’s role as the favoured destination for oligarchs to launder their cash. Meanwhile, the Economic Crime Bill has stopped oligarchs using offshore companies to hide their ownership of British property. The Official Secrets Act is also expected to be updated after security chiefs said they were unable to prosecute foreign spies who hit Britain with cyberattacks.