Revolut reports pre-tax loss as recruitment grows
Revolut remains confident about its future outlook and is on track to break even in 2020, as the fintech announced that losses tripled last year due to increasing staff costs. The company reported a pre-tax loss for 2019 of £107m, up from £32.9m in 2018, on revenues which were up 180% to £162.7m. Chief executive Nikolay Storonsky commented: “While we still have some way to go, we are pleased with our progress in 2019… despite the current economic challenges, we remain focused on our goal of moving towards profitability.” The firm now employs 2,261 people, up from 633 a year earlier.
Government coronavirus business loans total nears £52bn
Data released by the Treasury reveals that £51.7bn was lent to businesses via the Government’s emergency coronavirus loans funding schemes. Lending under the bounce back loan scheme accounted for £34.96bn, with a total of 1,404,726 applicants and 1,157,296 approvals; under the coronavirus businesses interruption loan scheme (CBILS), lending hit £13.41bn, with 121,669 applications and 59,520 approvals; and the coronavirus large business interruption loan scheme (CLBILS) made up £3.4bn of lending, with 497 loans approved out of a total of 896 applications.
The banking world’s in need of visionaries
The Times’ Katherine Griffiths laments the lack of long-term vision among the banking sector’s leadership and asks where are all the radicals who will address the current problems facing the sector. She looks to Bernard Looney, the boss of BP, who, she argues, has attracted the new high-flying head of strategy - Giulia Chierchia – only because of his truly dramatic ambition for the rebirth of BP. “Someone out there needs to do the same for banks,” Griffiths concludes.
Post Office cash deposits return to pre-coronavirus levels
One side-effect of banks cutting back their opening hours has been an increase in cash transactions at the Post Office. Consumers and businesses withdrew £607m in cash from Post Office branches last month, an increase of 13% compared to June, while £1.8bn was deposited, a 27% rise.
SoftBank rebounds from historic loss with $12bn quarterly profit
SoftBank founder Masayoshi Son has pledged that securing cash remained his focus after the investment company bounced back from a historic loss to post a $12bn quarterly profit.
Wall Street bank fees from China listings jump despite political tension
Wall Street banks continue to rake in hundreds of millions in fees from Chinese firms listing in the US, despite Donald Trump’s threat to delist them over audit standards. Although concerns are increasing slightly, US banks predict a shift to more Chinese listings in Hong Kong, where they can continue to make a handsome profit. Finally, the FT looks at how US sanctions on Chinese and Hong Kong officials could have big implications for US and international banks that operate in the city.
Crédit Agricole chief pushes post-coronavirus partnerships over mergers
Philippe Brassac, the chief executive of Crédit Agricole, says European finance is in urgent need of more partnerships in areas such as insurance, consumer finance and asset management, rather than mergers.
US bank deposits: the rocky mountains
The FT’s Lex comments on how US banks are “awash with capital” but can make no use of this excess cash due to the current ultra-low interest rates.
The Spac race: Wall St banks jostle to get in on hot new trend
The FT reports on the rush by US banks to create special purpose acquisition companies (Spacs), which has generated “thick streams of fee income for underwriters.”
Used car sales come back to life
Figures from the Society of Motor Manufacturers and Traders show that 1.03m used cars were sold between April and June, compared with 2.03m in the same quarter last year. But dealers have seen a rise in demand since reopening, with sales down 17% in June compared with the 74% slump seen in April.
Rolls-Royce engine faults discovered
Rolls-Royce’s most important jet engine programme, the Trent XWB, is facing fresh challenges after routine maintenance revealed cracks on some devices. The company is now facing a £2.5bn bill for repairs, redesigns and compensation to carriers using the engines, with Rolls-Royce holding the exclusive contract to provide engines for Airbus’ A350 model.
Bellway resumes land buying after pandemic pause
Bellway has resumed land buying, after the firm’s board initially introduced a moratorium on all new land contracts as a result of the coronavirus pandemic earlier this year.
Prudential US unit to be spun off as fall in operating profit announced
Prudential’s US business Jackson is to be spun off as the firm focuses on its fast-growing operations in Asia and Africa. Dividends will also be slashed to help fund growth in these markets. Prudential’s adjusted operating profit was down 3% in the first half to $2.5bn, above a forecast of $2.4bn while net income fell 54% to $534m. The FT’s Lombard wonders whether the Pru could soon find itself mired in a political wrangle over Hong Kong, as HSBC and Standard Chartered have recently.
City bookmaker boosted by 200,000 new customers
Plus500 is to return $168m to shareholders after a wave of new punters helped to lift its first-half profits six-fold. The company's earnings before interest, tax and other charges leapt to $361.8m from $65.6m a year earlier.
LEISURE & HOSPITALITY
IAC’s vote of confidence raises hopes for GVC
News that Barry Diller’s IAC bought 12% of GVC’s US partner MGM on Monday has brightened analysts’ expectations, with Goodbody and Peel Hunt both recommending investors buy the bookmaker’s shares.
Chancellor’s hospitality sector boost scheme proves popular
The latest figures from the Government reveal that Chancellor Rishi Sunak’s Eat Out to Help Out scheme was availed of over 10.5m times in its first week of operation.
First-time buyers facing a tougher climate
The number of young people taking their first step on the property ladder has dropped significantly as surging prices condemn a generation to a lifetime of renting, according to the Bank of England. The number of first-time buyers has slumped by almost a quarter since 2006 as the housing crisis deepened with about 243,000 transactions made in 2018, its economists calculated.
Derwent London dividend up as first-half results released
Derwent London has increased its dividend for the first half, as it reported gross rental income of £97.8m, up 5% from £93.1m in the year earlier period. Net rental income declined to £84.4m, with the firm recording a loss of £13.2m, down from profit of £129.6m in 2019.
Airbnb prepares to list
San Francisco-based Airbnb has approached Morgan Stanley and Goldman Sachs to lead revived plans for a listing. The company reported revenue of $4.8bn last year and was recently valued at $18bn.
Debenhams to cut another 2,500 jobs
Debenhams is planning to cut a further 2,500 jobs as it restructures management roles at stores and distribution centres. The retailer, which currently employs 14,500 people, announced 4,000 job losses in May. The cuts will be mainly across its UK stores and distribution centre, but it said no new shops were slated to shut. The Telegraph’s Ben Marlow contends that Debenhams' problems can be traced back to a “ruinous” private equity buyout which lumbered it with “long rental leases, and loaded the chain with more than £1bn of debt.”
UK is officially in recession for first time in 11 years
The Office for National Statistics (ONS) has reported this morning that the UK economy contracted by 20.4% in the second quarter of 2020, putting the UK into recession for the first time since the financial crisis. The ONS said that while the economy began to bounce back in June as lockdown eased, GDP in June was a sixth of the level recorded in February before the virus hit. In its update on the economy, the ONS also pointed to a record fall in productivity during the second quarter of the year as more than nine million workers were placed on furlough. The data showed that the UK economy suffered more than any other advanced nation because it is so heavily dominated by the service sector. Spain recorded an 18.5% fall in the second quarter, Germany declined 10.1% and the US lost 9.6%.
Sunak weighs delaying autumn Budget on second Covid wave
Rishi Sunak is reportedly considering scrapping his autumn Budget if Britain is hit by a big second wave of coronavirus, signalling anxiety at the heart of government over a possible second COVID-19 spike.