BANKING
Labour builds bridges with banking bosses
The Labour party has been stepping up its efforts to build bridges with banking bosses in recent months, amid predictions of a Jeremy Corbyn-led government taking office. Despite a claim by Citi this week that Mr Corbyn becoming prime minister would be as bad for the City as a hard Brexit, the party appears to be strengthening its relations with financiers. In recent months the shadow City minister Jonathan Reynolds and shadow chancellor John McDonnell have hosted intimate roundtables with bank leaders and launched regular "City surgeries" where executives can voice their concerns about Labour’s policies and any wider issues. Separately, Rebecca Long Bailey writes in the Yorkshire Post in support of Labour’s plans for a publicly-owned Post Bank. The shadow business secretary says the Post Bank, which will be run through the post office network, will “tackle financial exclusion, provide small businesses with the finance they need [and] ensure every community has easy access to face-to-face, trusted and affordable banking.” Labour will also create a £250bn National Investment Bank served by a network of Regional Development Banks that will lend to small businesses.
Government pledges funding for fast-growing firms
The government has pledged to provide a further £200m of funding to the British Business Bank to ensure that fast-growing private businesses have access to capital after Brexit. The funding is intended to mitigate any damage caused by loss of access to the European Investment Fund. Robert Jenrick, exchequer secretary to the Treasury, said: "The UK is creating more start-ups and attracting more venture capital funding than any other European country, but we want to do more to ensure our small businesses and entrepreneurs can thrive.”
RBS CEO facing pay backlash
Shareholder advisors PIRC have urged Royal Bank of Scotland investors to vote down chief executive Ross McEwan's £3.6m pay, which has been branded "excessive".
INTERNATIONAL
BofA reports record quarterly profit
Bank of America has posted its largest ever quarterly profit after a strong performance by its consumer bank, even as revenue fell slightly. Higher interest rates allowed the lender to make more money on loans, and last year’s corporate tax cut helped it to grow its top-line first quarter profit to $7.3bn.
BlackRock beats analysts’ expectations
BlackRock saw profits fall in the first quarter of the year but still beat analysts’ expectations. Net income attributable to BlackRock fell to $1.1bn (£803m) in Q1, down 4% compared to a year earlier. It took the American investment firm’s earnings per share to $6.61, above the consensus prediction of $6.13.
ING joins chase for takeover target Commerzbank
ING chief executive Ralph Hamers and Commerzbank boss Martin Zielke have been “informally in touch” about a cross-border merger of both banks.
Chinese conglomerate HNA faces loss of assets after default
China’s HNA Group faces the loss of assets, including buildings at London’s Canary Wharf to creditors, after one of its subsidiaries missed an interest payment on a HK$1.4bn ($179m) loan.
Nexi shares drop in Milan on first day of trading
Shares in Italian payments group Nexi dropped by more than 6% on their first day of trading yesterday.
AVIATION
Fuel costs push Lufthansa to Q1 loss
Lufthansa expects an operating loss of €336m (£290m) in the first three months of the year after fuel costs ate into profits. Revenues at the airline grew 3% year-on-year to €7.9bn, but it also took a €202m hit from rising fuel costs, while what it called market-wide overcapacities also pushed down prices.
Boeing faces calls for boardroom shake-up
Shareholder advisory firms are calling for a boardroom shake-up at Boeing following two fatal accidents involving its 737 Max aircraft.
CONSTRUCTION
Galliford Try issues profit warning
Shares in Galliford Try fell 20% at the start of trading after the firm issued a profit warning. The construction firm said profits will be £30-40m lower than the expected £156m, as it plans to shrink the size of its construction business.
FINANCIAL SERVICES
Provident and NSF step up war of words
The war of words between Provident Financial and Non-Standard Finance has continued to escalate after Provident’s chairman branded a £1.3bn bid from its smaller rival “more of a coup d'état than a hostile takeover”. NSF acknowledged last week that it committed “technical infringements” of company law by making several dividend payments since 2016 that were not part of its distributable reserves, but said the situation could be rectified. However, Provident chairman Patrick Snowball told shareholders in a letter yesterday that “the simple truth of the matter is that [the dividend payments] were unlawful”.
Mastercard mega-claim brought back to life
The Court of Appeal has reversed an earlier decision to have a £14bn class action against Mastercard dismissed, after three judges found that the case could be reheard for certification in the Competition Appeal Tribunal (CAT). The claim says around 46m UK consumers paid higher prices on products because of charges imposed on retailers by Mastercard for processing credit and debit card payments over a 16-year period.
Finablr looks to raise $200m ahead of London IPO
Finablr is set to press ahead with its listing on the London Stock Exchange next month. The UAE-based fintech firm hopes to raise $200m (£152m) from the sale of new stock and some existing shares, and plans to sell 25% of its equity.
Ashmore assets increase
Ashmore has enjoyed an increase in funds under management, which were boosted by new money from clients and investment gains. The company said yesterday that assets had increased by 11% in the three months to March 31 to $85.3bn.
Fund managers shun Britain
A survey of fund managers by Bank of America Merrill Lynch has found that Britain is still the least favoured country for investors. The study shows that 28% of those surveyed had positioned their portfolios so that they were underweight in Britain.
HEALTHCARE
Drug sales help Johnson & Johnson offset baby care weakness
Johnson & Johnson’s net earnings fell 14% in the first quarter, partly driven by higher legal expenses, but still exceeded analysts’ expectations.
MEDIA AND ENTERTAINMENT
Netflix posts record revenue
Netflix has reported more than $4.5bn (£3.5bn) in revenue in the first three months of 2019, although the streaming service’s year-on-year growth rate of 22% was lower than in the first half of last year.
PROFESSIONAL SERVICES
Hays fails to reach fee expectations
Shares in Hays dipped after it announced lower-than-expected growth in its third quarter trading update. The recruiter said net fee growth for the quarter was 6%, below the consensus figure of 7%, following a slowdown in its Australian and German businesses.
REAL ESTATE
L&G invests in housing for homeless
Legal & General has agreed to invest almost £50m in providing accommodation for homeless families in a deal said to be a potential blueprint for solving Britain’s housing crisis. The insurance group has bought 167 homes in Croydon, south London, and has leased them over 40 years to the local council, which will pay the company rent that is expected to save Croydon about £20m.
ECONOMY
Unemployment continues to fall
Unemployment fell by 27,000 in the three months to February to 1.34m, ONS figures show. The number of people in work was also virtually unchanged at a record high of 32.7m, with a jump of 179,000. The figure has increased by 457,000 over the past year, all among full-time employees and the self-employed. Average weekly earnings, excluding bonuses, had an estimated rise of 3.4%, before adjusting for inflation. When adjusted for inflation, pay, including bonuses, increased by 1.5% on the year, the highest figure since the summer of 2016.