BANKING
Co-operative and Sainsbury's call off £650m mortgage deal talks
The Co-operative Bank has exited talks with Sainsbury's Bank about buying a £650m mortgage book after failing to agree on a price. A sale process has been under way for some time but it is now unclear whether Sainsbury's Bank had discontinued the sale process or was proceeding with another party.
Why Britcoin would be taking a liberty
The FT’s John Guthrie says the Bank of England’s case for a CBDC doesn’t add up and warns that serious unintended consequences could result from its roll-out.
INTERNATIONAL
UBS chief sees pay jump 11% but overall bonus pool falls
Ralph Hamers, the CEO of UBS, received SFr12.2m ($13m) in salary and bonuses in 2022, up from SFr11m the year before after successfully leading the bank through a challenging year. The Swiss lender’s overall bonus pool dropped 10% to SFr3.3bn. UBS saw a particularly strong performance in its wealth management division which offset the dramatic fall in its global markets unit. Separately, UBS has appointed two new co-heads for its investment banking business in the technology, media, and telecom (TMT) sector of the Asia-Pacific region. Axel Granger and Tim McKessar have been named as co-heads of TMT in Asia Pacific, replacing Patrick Tsang, who the bank said would focus on driving coverage and strategic initiatives for key clients across global banking in Asia.
Top Goldman Sachs trader Joe Montesano to exit bank
Goldman Sachs’s head of equity trading for the Americas is retiring from the bank. Joe Montesano was so successful he often earned more than the bank’s CEOs. Goldman has seen several high profile departures in recent weeks from both its trading unit and asset management arm after it merged its mainstay and investment banking divisions following the creation of three main business units last year.
Paris beats London for hiring, says top Citigroup banker
A Citigroup executive overseeing the creation of a new trading floor in the French capital says it is easier to hire in Paris than London. Fabio Lisanti, head of Citigroup's European trading business, told Bloomberg that Citigroup had been able to "hire talent in Paris that we would never have been able to attract in London". He added: "London remains the main trading hub for us. But we have and will move certain risk management and risk books in Europe."
AUTOMOTIVE
New car market grows for seventh consecutive month
New car registrations increased by 26.2% in February, representing a seventh consecutive month of growth, according to the Society of Motor Manufacturers and Traders (SMMT). Total registrations for the month hit 74,441, which is a significant improvement over last year, if down 6.5% on pre-pandemic 2020. The SMMT anticipates that registrations across the whole of 2023 will reach 1.79m, up 11.1% on last year.
CONSTRUCTION
UK construction sector rebounds in February
Research from S&P Global showed the construction sector grew at its fastest rate for nine months in February after two months of declines. Tim Moore, economics director at S&P Global Market Intelligence, said: "Some firms noted that fading recession fears and an improving global economic outlook had boosted client confidence in the commercial segment." Last month's 54.6 index score was up from 48.4 in January. Commercial construction and civil engineering saw the biggest rebound, however, output in the house-building sector continued to fall. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said February's dry weather may have enabled more work than usual to go ahead. He added: "We continue to expect housing construction to fall over the next six months."
FINANCIAL SERVICES
WANdisco stokes more fear of exodus to New York
Concerns over the future of London as a listing destination continue to bubble away with news that software firm WANdisco is considering a dual listing in New York providing more cause for hand-wringing. Mark Austin, partner at Freshfields and the author of the Austin Review of the UK’s secondary markets, said London needed to act fast in order not to fall behind. “We are already in the process of meaningfully reforming our relevant law and regulation and discussions are now also gaining momentum in relation to the changes we need to make to market practice,” Austin added.
Post-Brexit financial reforms increase risks for insurers
The Governor of the Bank of England, Andrew Bailey, has warned that financial reforms intended to bolster the City in the post-Brexit landscape will increase the risk of insurance firms going bust and potentially leave taxpayers with a multi-billion pound bill. Mr Bailey said that relaxing Solvency II capital buffer rules will free up £14bn over a one-year period but increase the probability of an insurer failing from 0.5% to 0.6% – an increase of 20%.
Chinese companies choose Switzerland over US and UK to raise money overseas
Chinese companies are spurning the US and the UK to list in Switzerland, with $3.2bn raised by nine Chinese companies in Zurich last year. This compares with $470m Chinese firms raised in New York.
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LEISURE & HOSPITALITY
Shapps told to overhaul Ofgem powers amid energy squeeze
The chief executive of UK Hospitality, Kate Nicholls, has warned the energy secretary that the industry regulator needs to be handed powers urgently to tackle the treatment of business customers by suppliers. Nicholls told Grant Shapps in a letter that Ofgem should be allowed to take action on non-commodity, service and access charges as well as security deposits and terms of supply which had the potential to undermine government support. "Due to a severe lack of competition in the market most hospitality businesses were forced to accept very high prices fixed for at least a year," the letter said. "Consequently, half the businesses in our sector will be locked in at extortionate prices as energy support is significantly reduced from April. This could have a potentially terminal impact on thousands of businesses that are simply unable to afford their bills."
Activist investor threatens to push for removal of TRG boss
Oasis Management, the Hong Kong-based hedge fund, is demanding a strategic shake-up at The Restaurant Group or it will launch a push for the removal of boss Andy Hornby. The Wagamama and Frankie & Benny’s owner will post its full-year earnings on Wednesday when it is expected to post a sharp jump in revenues for the year and swing back to an adjusted profit after pandemic restrictions were eased.
Starbucks to open 100 outlets in UK after abandoning sell-off plan
Starbucks has cancelled plans to sell its owner-operated UK coffee shops and has instead committed to opening 100 outlets this year, despite being “cautious about the macroeconomic environment”.
MANUFACTURING
Manufacturing body blasts economic mismanagement
Stephen Phipson, the CEO of Make UK, will today launch an attack on government “mismanagement” of the economy and the UK’s post-Brexit relationship with the European Union. Phipson will reportedly criticise the Government’s failure to embrace a coherent industrial strategy, leading to indecision over the introduction of British-built small nuclear reactors and the failure to attract gigafactories to the UK for the transition to net zero.
RETAIL
UK consumers cut back on spending in February
According to the British Retail Consortium (BRC) Retail Sales Monitor, UK retail sales were up 5.2% in February against an increase of 6.7% last year. Food sales increased by 8.3% over the three months to February and non-food sales were up 3.2%. Online non-food sales fell by 3.1% against a decline of 28.4% last February. BRC chief executive Helen Dickinson said: “While the cost-of-living crisis has made customers increasingly price-sensitive, they are still ready to celebrate special occasions.” However: “The economic backdrop means retailers face volatile trading conditions. Many consumers will be concerned as they prepare for further energy price and tax rises in April.” Meanwhile, separate figures from Barclays show consumer spending grew just 5.9% year-on-year in February as Britons continue to cut back on non-essential spending.
ECONOMY
Pressure builds on City as gap between UK and US indices grows
Analysts at Citigroup have found that the MSCI UK index, which tracks the UK’s large and medium-sized companies, is now trading at a record discount of 40% to the MSCI USA Index, which covers the performance of the large and mid-cap segments of listed US companies. The materials, food, drinks and energy industries are trading at the biggest discount to their US counterparts, according to Citigroup. It pointed to BP and Shell as examples of companies saddled with the biggest valuation gap by virtue of listing on the FTSE 100.
Investors call for clarity on EIS after EU deal
Lord Leigh of Hurley, co-founder of Cavendish Corporate Finance, is calling on the Government to clarify whether Rishi Sunak’s new Brexit deal will mean the Enterprise Investment Scheme (EIS) can be expanded as the UK is no longer restricted by EU state aid rules. “As we decide how to plough our own path post-Brexit, it is important that we are entirely free to create our own rules concerning subsidies that might amount to state aid,” Leigh said.