HSBC profits hit by China slowdown
HSBC has reported a lower-than-expected 15.9% rise in pre-tax profits for 2018, partly because of the economic slowdown in China and Hong Kong. The bank made $19.9bn (£15.4bn) before tax last year, compared with $17.2bn in 2017. Reported revenue was $53.8bn, a rise of 5% from the previous year. HSBC chief executive John Flint said the fourth quarter had been “undeniably weak” and that there were more risks to global economic growth than this time last year. But group chairman Mark E Tucker also said that the bank was "in a strong position", stating: "Despite a challenging external environment in the fourth quarter, all of our global businesses delivered increased profits." The FT’s Lex column suggests that “a bank self-identifying as ‘Asia-focused’ should consider focusing more on Asia.” HSBC also said yesterday that more than 1,000 employees were now working on its programme to manage the impact of Brexit, which includes new branches of HSBC France.
Former chair gives evidence in Barclays trial
Former Barclays chairman Marcus Agius has given evidence in the fraud trial of four former Barclays executives. Mr Agius told the trial that he did not recall being told details of additional fees the bank is said to have paid to Qatar over the course of two emergency fundraisings in June and October 2008. Mr Agius said that former chief executive John Varley, one of the four accused of hiding fees paid to Qatar, had "shown himself to be courageous" and would disclose everything he needed to in the years they worked together. Mr Agius also suggested that executive pay was a factor in Barclays’ decision to raise private funds. “We concluded that if our major shareholder was the government, our ability to pay our people competitive rates in order to obtain their services would be compromised,” he said.
Gambling Commission considers credit cards ban
The Gambling Commission is launching a review this week into whether gamblers should be allowed to use credit cards to place bets. The commission said last year that it had begun assessing the merits of a credit cards ban.
Scheme to give businesses greater banking choice struggles
The FT says the distribution of cash from a £775m RBS-funded scheme to boost banking competition is likely to provoke controversy when recipients are announced on Friday.
Ex-Google CFO heads new London fund
Canadian firm Inovia Capital has announced a $600m (£464.7m) fund for technology startups and entrepreneurs, to be led by former Google chief financial officer Patrick Pichette. The Holborn-based office will focus on intellectual property within Europe, cutting cheques ranging from $2m to $50m.
Estonia tells Danske Bank branch to shut
Estonia has told Danske Bank to close its branch in Tallinn before the end of 2019 after a money-laundering scandal. Chief executive Thomas Borgen resigned last year after an investigation into payments of about €200bn (£174bn) which were made through the branch. The bank said many of those payments were suspicious. Interim chief executive Jesper Nielsen said the bank would comply and would also close most of its activities in Latvia, Lithuania and Russia.
Alibaba raises stake in China investment bank CICC
Alibaba has raised its stake in investment bank China International Capital Corp (CICC) to 4.84%. Rival Tencent has a 4.95% stake in CICC.
Goldman Sachs’ Asia-Pacific chief Ken Hitchner to retire
Goldman Sachs' Asia-Pacific chairman and chief executive Ken Hitchner will retire this year after 27 years with the bank.
Honda confirms Swindon plant closure
Honda has confirmed it plans to close its Swindon plant in 2021, putting up to 7,000 jobs at risk. The Japanese carmaker said that in addition to the 3,500 direct jobs affected at the Swindon plant, a further 3,500 people "working in affiliates primarily supplying Honda" in the UK could be affected. Honda said the move was due to global changes in the car industry and the need to launch electric vehicles, and it had nothing to do with Brexit. Business Secretary Greg Clark said the decision was "devastating" for Swindon and the UK.
US airline leads last-minute Flybe rescue
Arizona-based airline Mesa has tabled a £65m rescue deal for Flybe in a move that could derail Virgin Atlantic’s planned takeover. The refinancing plan is reportedly being led by South African aviation investment firm Bateleur Capital and US hedge fund Avenue Capital.
Cobham takes Boeing hit
UK aerospace supplier Cobham has taken a £160m hit to settle a long-running row with Boeing over supply delays, paying £86m in compensation and £74m to finish work on an aerial refuelling pod.
Financial firms prepare to move money out of UK
Aviva has received high court approval to transfer around £9bn in assets to a new Irish company. Martin Moore, counsel to the UK's second largest insurer, said: "The current state of extreme and intensifying uncertainty regarding the terms of United Kingdom's departure from the European Union renders the need for certainty of provision all the more pressing." Meanwhile, on Friday NatWest will ask a court in Edinburgh to approve its application to move £6bn in assets and £7bn in liabilities from Britain to its Dutch hub.
Goldwag to chair Financial Services Consumer Panel
The Financial Conduct Authority has appointed Wanda Goldwag as the new Chair of the independent Financial Services Consumer Panel, succeeding Sue Lewis. Ms Goldwag will be the “public face” of the panel, the FCA said.
LEISURE AND HOSPITALITY
InterContinental Hotels sees solid growth
Holiday Inn-owner InterContinental Hotels has posted its strongest growth figures for a decade, adding 56,000 rooms last year to take total revenue to $1.9bn.
Deadline set for RPC takeover
The Takeover Panel has given US company Berry Global Group until mid-March to announce a firm intention to make an offer for FTSE 250 manufacturer RPC.
MEDIA AND ENTERTAINMENT
Future leveraging digital shift to beat expectations
Publisher Future expects to beat expectations for its new financial year on the back of strong revenue growth in e-commerce and digital advertising, and the acquisition of several new titles. Profit and revenue increased in the 12 months to the end of September, after its digital audience grew to 142m, up from 49m the year before.
UK led Europe for M&A deals last year
The UK enjoyed the highest value of M&A deals in Europe last year, with mergers involving UK companies hitting $247bn according to data compiled by law firm Clifford Chance. There was a spike in telecoms and media takeovers and a 3% fall in financial services acquisitions. Both domestic and US-inbound M&A transactions in the UK rose 33% compared to 2017.
Most first-time buyers since 2006
Last year, Government schemes such as Help To Buy and improved competition in property prices paved the way for the highest number of first-time buyers since 2006. Data from UK Finance reveals there were 370,000 new first-time buyer mortgages completed in 2018, a 1.9% rise on 2017. The average buyer took on a mortgage with a deposit of just 15%, the smallest proportion since 2008. Loans are also growing compared to incomes, with the median mortgage worth 3.64 times the borrower’s annual income - a record high, up from 3.27 times a decade ago.
Asda sales growth slows
Asda has reported a slowdown in sales growth amid another "challenging year" for retailers. In the final three months of 2018, like-for-like sales at the supermarket chain grew 1%, compared with a 2% rise in the previous quarter.
Employment at record high
The number of people in work in the UK has continued to climb, with a record 32.6m employed between October and December, the latest ONS figures show. Unemployment was little-changed in the three-month period at 1.36m. Weekly average earnings also rose, by 3.4% to £494.50 in the year to December - the highest level since March 2011, after adjusting for inflation. However, the ONS also reported that productivity - measured as output per hours worked - fell 0.2% in the fourth quarter compared with the same period in 2017.