BANKING
HSBC announces three senior appointments
HSBC has appointed Natalie Blyth as global head of commercial banking sustainability, with the move part of the bank's efforts to help corporate clients transition to a low-carbon economy. Ms Blyth, a member of the bank's executive committee, will report to global commercial banking chief executive Barry O'Byrne. Meanwhile, HSBC has also appointed Christian Deseglise as group head of sustainable infrastructure and innovation, and Chris Webb as group head of carbon markets. Both will report to group chief sustainability officer Celine Herweijer.
PRIVATE EQUITY
CVC picks Lucas to lead London listing
CVC Capital Partners has picked veteran partner Rob Lucas, who has worked at CVC since 1996, to spearhead a £11bn stock market listing. He is to become chief executive of the firm, which plans to float on the London stock market later this year. Mr Lucas, a former chairman of the private equity industry's main UK trade body, serves as the co-chairman of CVC's private equity board for Europe, the Middle East and Americas.
INTERNATIONAL
Goldman Sachs sees profits more than double to $27bn
Goldman Sachs saw pre-tax profits more than double to $27bn last year. This saw bankers paid more than $17bn, with pay and bonuses increases equating to about $403,000 for each employee on average, up from about $328,000 a year ago. Annual pre-tax operating profits rose to $27bn, from $12.5bn a year earlier. Full year revenues came in at $59.3bn, a 33% increase on 2020. On a quarterly basis, revenue rose by 8% to $12.64bn in Q4, but net profits fell by 13% to $3.81bn.David Solomon, the bank's chairman and chief executive, said 2021 had been a record-breaking year for Goldman as it had capitalised on a surge in mergers and acquisitions.
CONSTRUCTION
Watkin Jones reports strong results
Construction firm Watkin Jones has reported an increase in revenue of 21.5% in the 2021 financial year, with gross profit up by 11.7% to £84.8m.
FINANCIAL SERVICES
FCA to clamp down on misleading crypto ads
The Government has announced that cryptocurrency adverts will have to meet the same standards as other financial promotions. In an effort to help protect people from potentially misleading claims, crypto promotions will be brought into line with other financial advertising, such as that for stocks, shares, and insurance products. Under the plans, the promotion of cryptoassets will come under Financial Conduct Authority (FCA) rules. The changes will be brought in by amending the Financial Promotion Order. Chancellor Rishi Sunak said that while cryptoassets “can provide exciting new opportunities … it’s important that consumers are not being sold products with misleading claims.” He added: “We are ensuring consumers are protected, while also supporting innovation of the cryptoasset market.” Welcoming the plans, Laura Suter, head of personal finance at AJ Bell, said: “The Advertising Standards Agency has already been banning individual crypto adverts that it deems misleading or understating the risk involved in the market, but this new move by the Government will lead to a wholesale tightening of the rules governing adverts.” Ed Cooper, head of crypto at financial app Revolut, commented: “Clear guidance in how companies describe their crypto offering will benefit consumers and help improve trust in the sector.”
EU reconsiders clearing access deadline
The EU has climbed down from a deadline to pull European finance firms’ access to London clearing houses, with Brussels planning on extending temporary permits allowing banks, brokers and fund managers on the continent to use UK clearing houses until June 2025. Mairead McGuinness, the European commissioner for financial services, said the extension of the deadline will prevent any “short-term cliff-edge effects” stemming from financial market volatility. Conor Lawlor, managing director for capital markets at UK Finance, said: “Given the interconnected nature of financial markets and the important role that UK clearing houses play, this decision provides needed certainty for EU and global customers and clients accessing the UK’s clearing infrastructure.” The Telegraph’s Simon Foy describes the decision as “a significant victory for the City”, adding that it will effectively end efforts by France and other rival countries to seize control of the market from London's clearing houses.
Pensions dashboards should have interactive features, says ABI
The Association of British Insurers (ABI) has suggested pensions dashboards should have interactive features to meet younger people’s digital needs. The ABI commissioned research which found that seven in 10 working people would like dashboards to be interactive. Yvonne Braun, director of long-term savings at the ABI, said: “Our new research is clear: pensions dashboards will be very popular. But most people want to be able to actively engage with their pensions on dashboards, rather than use a read-only, static website."
FCA to probe index providers over potential competition law breaches
The Financial Conduct Authority is looking into competition between benchmarks used by asset managers and other financial services firms, including how they are priced, their contractual terms and barriers to switching.
Lloyd's of London could leave City HQ
Lloyd's of London is reassessing its office space in a move that could see the world's oldest insurance market leave its iconic City of London headquarters. This comes amid a shift toward remote and hybrid working driven by the pandemic and the acceleration of moves towards automation that has seen business increasingly move away from its underwriting floor. The lease on the building, home of the insurance market since 1986, expires in 2031 but Lloyd's could leave in 2026 when there is a break clause.
LEISURE & HOSPITALITY
IHG names first female chair
Holiday Inn-owner InterContinental Hotels Group (IHG) has announced that Deanna Oppenheimer, a former head of retail banking at Barclays, will become its first female chair when she replaces long-serving Chairman Patrick Cescau later this year. Ms Oppenheimer, who currently serves as non-executive chair of Hargreaves Lansdown and is on the board of Thomson Reuters, will take over as non-executive chair at IHG in September.
MEDIA & ENTERTAINMENT
Microsoft plans to buy Activision Blizzard for nearly $70bn
Microsoft says it plans to buy major games company Activision Blizzard in a deal worth $68.7bn (£50.57bn). The deal would be the biggest acquisition in the company's history and is expected to be finalised in 2023. The planned deal is also the biggest in gaming history and comes a year after Microsoft bought another influential gaming company, Bethesda, for $7.5bn.
ECONOMY
Experts expect interest rate increase
City analysts believe the surging jobs market may see the Bank of England (BoE) opt for further increases to interest rates next month. The Bank last month voted to increase the base rate to 0.25%, having previously opted against an increase due to fears over the strength of the jobs market. With Office for National Statistics (ONS) figures showing an increase in the number of staff on the payroll while unemployment has continued to fall and redundancies have hit record lows, experts believe further interest rate rises are coming. Shane O'Neill, head of interest rate trading for Validus Risk Management, said the ONS data “represents another box ticked on the path to more rate hikes.” Dan Boardman-Weston, chief investment officer at BRI Wealth Management, believes the Bank will need to exercise "caution" due to predictions inflation may start to fall from May onwards, saying: “The last thing the Bank will want to do is either raise rates too far or too soon.” Analysts at Capital Economics said the labour market figures “support our view that interest rates will be raised from 0.25% to 0.50% on February 3.” Panmure Gordon analyst Simon French said that with inflation likely to peak around 7% in Q2 and energy prices remaining high, “the BoE is likely to retrace the path back to pre-pandemic interest rates of 0.75%.”
OTHER
Unemployment rate falls to 4.1%
Office for National Statistics (ONS) data shows that the unemployment rate dropped from 4.5% to 4.1% between September and November. The figures reveal that unemployment dropped by 184,000, with the number of people on the payroll climbing to 30m. Analysis shows that the employment rate was estimated at 75.5%, with this lower than before the pandemic but higher than in the June to August period. Darren Morgan, director of economic statistics at the ONS, noted that the number of employees on payrolls is “now well above pre-pandemic levels.” He added that in the three months to November, the unemployment rate fell to near pre-pandemic levels while the number of people who had recently been made redundant fell to a record low. The ONS report also shows that the number of job vacancies in the three months to December rose to an all-time-high of 1.247m. While the rate of growth in vacancies has been slowing, there are now a record 4.1 openings for every 100 employee jobs. It was also shown that weekly earnings, excluding bonuses, rose by 3.8% in the three months to November compared to the same period a year earlier. However, the figures revealed a slowdown in growth, with the rate falling short of the 4.3% recorded between August and October. While earnings rose, soaring rates of inflation mean workers suffered a real-terms cut in their pay packets. Inflation hitting a 10-year high of 5.1% in November effectively means workers have seen a 1.6% cut in pay.
Insolvencies climb in December
Statistics from the Insolvency Service (IS) show that the number of registered company insolvencies in England and Wales in December was 33% higher than the number registered two years ago, just before the pandemic. The data shows that there were 1,486 registered company insolvencies in December, with this 20% higher than a year earlier. The IS report notes a 73% two-year increase in creditors' voluntary liquidations, where bosses elect to place their company into liquidation in order to pay its debts. Christina Fitzgerald, president of restructuring trade body R3, said the figures suggest "the economic situation is pushing many company directors to voluntarily close their businesses before that decision is made for them". December, she added, “marked a tough end to a torrid year for many businesses."