Hammond to argue case for City trade deal
Philip Hammond is to appeal directly to member states to agree a trade deal with Britain that includes financial services. The Chancellor will make a speech in Berlin today in which he will argue the case for an economic partnership covering the “length and breadth” of British and European economies. His comments come after Michel Barnier, the EU's chief negotiator, explicitly ruled out a deal covering the City of London. Separately, the FT looks at how Germany regulator BaFin is making a soft pitch to lure banks post-Brexit.
JC Flowers offloads OSB stake
JC Flowers has announced the sale of half of its stake in OneSavings Bank. The US private equity group and associated funds will sell 24.3m shares, or about a stake of about 10% in the challenger bank, leaving the firm with a 9% holding once the offering is completed.
Handelsbanken grows Yorkshire presence
Handelsbanken has agreed a new 10-year lease on an office space in York. The bank is to move into newly refurbished office space at Clifton Park, York, which will become the new home for its eight-strong team in the city.
Terra Firma appoints CFO
Vivek Ahuja, former deputy group CFO of Standard Chartered, has been appointed by Terra Firma as group CFO. The private equity house has also appointed Mark Elliott as a managing director and head of support capital. Mr Elliott joins from Lloyds Banking Group. Terra Firma is reportedly seeking €3bn ($3.58bn) for its latest buyout fund.
SNB expects record profits
The Swiss National Bank said it expects an annual profit of SfR54bn ($55.25bn) for 2017 – the biggest profit in its 110-year history. The central bank anticipates an annual profit of SfR49bn from its foreign currency positions, which have swelled to SfR784bn by November as it sought to weaken the Swiss franc and have increased in value as the Swiss currency depreciated last year. The SNB, which will give its full earning figures on March 5, said it also expects a valuation gain of SfR3bn on its gold holdings.
Diesel car sales to plunge, study says
Aston University predicts diesel cars will account for just 15% of the UK market by 2025. Automotive expert Professor David Bailey said diesel's “slow death” was being driven by “environmental pressures and consumer confusion” and has urged the government to set up a scrappage scheme to encourage drivers to switch to electric cars.
Airbus to increase production in China
Airbus has agreed a deal to produce six of its A320 jets a month, from a current total of four, at its final assembly plant near Bejjing by 2020.
Vienna base for Wizz Air
Wizz Air is investing £245m into the setting up of base operations at Vienna airport, from which it plans to operate 17 new routes.
Persimmon builds expectations ahead of results
Persimmon has reported that full-year profits will beat market expectations after revenues soared last year on the back of “healthy” customer demand. The housebuilder sold 16,000 homes in 2017, 6% up on the previous year, helping push revenues up 9% to £3.4bn. Its average selling price rose 3% to £213,300. Persimmon acquired 17,300 plots of land in the year and its cash holdings climbed 42% to £1.3bn.
Hedge funds produce best returns in 4 years
The global hedge fund industry produced its best returns since 2013 last year, according to research group HFR, hitting 8.5%, up from 5.4% recorded in 2016. Meanwhile, the quantitative hedge fund industry is on the brink of surpassing $1tn of AUM this year propelled by interest in more systematic, computer-powered investment plans.
Fundsmith founder takes home £8m profit share
Terry Smith, founder of Fundsmith, has received an £8m profit share after turnover at his company doubled in the past year. Fundsmith's global equities fund was the best-performing investor among more than 150 funds in its peer group over three-year and five-year periods, according to Moneyfacts. Fundsmith managed assets worth £13.4bn at the end of 2017. AUM rose from £5.89bn to £11.08bn.
Changes at Hastings
Hastings chairman Mike Fairey is to step down in May. The insurer’s CEO Gary Hoffman will replace him. The new chief executive will be Toby van der Meer, who has been with the company since 2011 and currently runs Hastings' UK insurance business.
LEISURE AND HOSPITALITY
Burger chain could close restaurants
Burger chain Byron could close up to 20 restaurants as part of a financial rescue proposal. Any deal would need approval from Byron's creditors, who will vote on the plan on 31 January. Byron, which has more than 70 outlets, employs about 1,800 staff across the UK.
Luggage storage start-up secures funding
Luggage storage start-up City-Stasher has secured $1.1m (£800,000) in a fundraising campaign, supported by a number of investors including venture capital firm Howzat Partners.
MEDIA AND ENTERTAINMENT
Rail firm halts sale of Daily Mail
Virgin Trains will no longer sell copies of Daily Mail on its West Coast trains, a decision it said was made “after listening to feedback”. A Daily Mail spokesman branded the move “disgraceful”.
Kodak pivot to blockchain sends shares flying
Kodak’s announcement that it is to create a blockchain business sent the photography company’s shares flying. Kodak will create an encrypted digital ledger of ownership rights for photographers.
City hiring cyber-security experts
Robert Walters has said that an urgent need for cyber-security experts is helping to drive a City hiring boom. The recruiter said that after the EU vote some banks froze hiring, but the need for IT risk experts amid a spate of hacks is now outweighing Brexit fears. The firm reported 22% growth in net fee income in the fourth quarter.
NEC acquires Northgate
NEC has announced a £475m purchase of a UK outsourcing firm that provides software to the Metropolitan Police. The Japanese IT group has agreed to buy Northgate Public Services from Cinven, with the deal expected to complete by the end of January.
Older borrowers face equity release postcode lottery
Older borrowers releasing cash from their homes face a postcode lottery, after two major providers of loans started to offer different rates to customers depending on where they live. The policy, introduced by Aviva and Legal & General, means someone who lives in the South East or London can end up paying up to £2,585 more than someone in Cornwall, the Midlands or Scotland. L&G said the new pricing structure was introduced to drum up more business outside of London and the South East, while Aviva said it was due to differing risks to homes’ resale values.
Tesco a Christmas winner
Industry data shows that Tesco was the best performer over Christmas with a 3.1% rise in sales in the past 12 weeks beating its “big four” rivals Sainsbury's, Asda and Morrisons. Asda grew sales by 2.2% in the period to December 31st, while 2.1% more came through the tills at Morrisons and Sainsbury's was up 2%. However, growth at Aldi and Lidl continued to outpace the four, with both discounters seeing sales rise by 16.8%.This came despite grocery prices being 3.7% higher during the 12-week period. Overall supermarket sales increased in value by 3.8%, with an additional £1bn ringing through the tills compared to the same festive period last year.
Unilever deal backed by £5bn debt
KKR's purchase of Unilever's spreads unit will be backed with around €5.65bn-equivalent (£5bn) of debt financing, according to reports. The private equity group announced it was buying the business last month in a deal worth around €6.8bn.
World Bank warns of fragile upswing
The World Bank said the world’s economic output grew 3% last year on the back of increased investment, manufacturing activity and trade and predicts growth of 3.1% for 2018 - its best showing in seven years. The global economy is expected to maintain that rough growth level through to 2020, however, the potential for further growth will be limited unless more investments in infrastructure, education and health, are made. Ageing populations, tightening monetary policy and protectionism would also limit expansion.