HSBC boosts dividend to counter Ping An break-up pressure
HSBC has raised its dividend to the highest level in four years and said it would consider share buybacks sooner than expected as it seeks to fend off break-up calls from its largest shareholder Ping An. The move came as the bank reported that pre-tax profit nearly doubled to $5.2bn (4.3bn) for the final quarter of 2022, beating market expectations of $5bn. Revenue also beat expectations, rising 24% to $14.9bn, boosted by higher interest rates. But as for warding off pressure from Ping An to spin out its Asian business, HSBC will need to provide more than a one quarter performance, analysts say. The bank’s shares rose 4.3%, or 26.8p, higher to 647.5p – the highest level since September 2019.
NatWest report reveals record number of firms founded by women
A review into the financing of female entrepreneurs by NatWest chief executive Dame Alison Rose found a record 150,000 new firms were founded by women last year, twice the 2018 figure. The number of all-female led businesses was up 16% and the number of financial services firms signed up to the Investing Women’s Code jumped to 190, up from 134 the previous year. “In the coming year we will continue to provide fresh initiatives offering mentorship, guidance and inspiration for founders, alongside securing new commitments from financial services institutions to make it easier for female-led companies to access vital capital,” Rose said.
Co-operative Bank bids for Sainsbury’s Bank mortgage book
The Co-operative Bank is tabling an offer for a £650m loan portfolio being offloaded by rival Sainsbury's Bank. An insider told Sky News on Tuesday that the former mutually owned lender appeared to be the frontrunner in the process. Sky’s City Editor Mark Kleinman says: “The move is significant, partly because it would herald Sainsbury's Bank's formal exit from the UK mortgage market after it ceased new lending in 2019, but also because of what it would signal about the Co-operative Bank's resurgence.”
Newcastle to takeover Manchester Building Society
Newcastle Building Society is to takeover Manchester Building Society in a deal overseen by the Prudential Regulation Authority that will not need the normal approval of members of either society. The Manchester board said that while its existing capital level met regulatory rules, it "lacks the scale and resilience to endure a major financial or economic stress without raising additional capital".
British Business Bank aims to become ‘sovereign growth fund’
The British Business Bank’s new chief executive, Louis Taylor, is seeking greater independence for the investment body suggesting it be run as a sovereign growth fund which reinvests the proceeds of its investments.
Warburg Pincus raising funds for China deals
The US private equity firm Warburg Pincus is raising $439m in its maiden yuan-denominated fund with plans to primarily focus on the healthcare and industrial technology sectors in China.
JP Morgan places restrictions on chatbots over data security fears
Investment banks including JP Morgan and the consultancy Accenture are warning staff against exposing client information to artificial intelligence tools like ChatGPT after a flood of interest in OpenAI’s chatbot. Microsoft has also adopted the technology, revamping its Bing Search engine using tools built by OpenAI. But security experts warn that using private or proprietary data with OpenAI tools could result in it being viewed later by a human annotator or incorporated into AI responses in the future. Jon Baines, a data protection expert at the law firm Mishcon de Reya, adds that using ChatGPT could risk breaking data laws if the software churned out inaccurate information. “Where that output involves the processing of personal data, questions then arise about the extent to which the inevitably inaccurate processing might be an infringement of the requirement, under the GDPR, to process personal data accurately,” Mr Baines said.
Credit Suisse shares hit new low as chair’s claims come under scrutiny
Shares in Credit Suisse fell as much as 8.4% on Tuesday following a report that Switzerland’s financial regulator was examining comments made by Chairman Axel Lehmann over how much clients had withdrawn from the bank. Finma is seeking to establish the extent to which Lehmann, and other Credit Suisse representatives, were aware that clients were still withdrawing funds when he said in media interviews that outflows had stopped. The regulator is reviewing whether Lehmann’s statements were potentially misleading.
Citigroup bucks Wall Street trend to give CEO Jane Fraser a pay rise
Citigroup has given CEO Jane Fraser an 8.9% pay rise, bucking the trend for the industry this year, bringing her total remuneration to $24.5m for 2022. She took over as the first female chief executive of a major Wall Street bank in February 2021.
UK says mark-to-market rule is holding back investment
The City Minister Andrew Griffith told the insurance industry on Tuesday that he and the Chancellor were determined to help Britain become “a start-up and scale-up superpower.” The financial services reforms already mapped out will help drive investment by unlocking “currently unproductive capital” Griffith said, pointing to proposed changes to Solvency II rules. Mr Griffith also said mark-to-market accounting standards mean far too much UK capital is trapped in short term, low yielding investments and that the “resulting ‘performance penalty’ is not serving the needs of British investors and pensioners.”
E-money groups need ‘significant shift in culture’, UK regulator says
The Financial Conduct Authority has said the UK’s 250 non-bank e-money businesses will need to undertake “a significant shift in culture and behaviour” if they are to be compliant with new consumer protection rules that come into force from June. Separately, the Times reports that one in ten e-money firms have failed to file their latest accounts on time, including Revolut and a payments service owned by eToro.
BHP calls for London Metal Exchange nickel benchmark overhaul
The mining giant BHP has called for the London Metal Exchange to reform its metal delivery rules following the chaotic short squeeze episode in its nickel market last year.
BTG Banner - Wc 20.02.23 - PLACED IN MIDDLE OF SUMMARY
LEISURE & HOSPITALITY
The Restaurant Group investor demands improvement
The Restaurant Group’s second largest shareholder, Oasis, has demanded immediate improvement to the firm’s struggling share price. Oasis says the company needed an “immediate” change of governance because it had “one of the worst performing share prices of any UK leisure company”.
UK factories record a fall in output and orders in February
A Confederation of British Industry survey published on Tuesday shows UK manufacturing output and orders fell in February and price pressures cooled again. Factory output for the past three months fell to -16 from -1, the lowest reading since September 2020. While its balance of new orders rose slightly to -16 from -17, it remained firmly in negative territory. "Conditions in manufacturing remain challenging, with output disappointing and order books having thinned out since late last year," said Anna Leach, deputy chief economist at the CBI. "However, if growth is going to return to the sector on a sustainable basis, then manufacturers need more than the boost some will receive from lower energy prices over the winter season."
House sales suffer weakest start to the year since 2015
Property sales fell 11% in January compared with the same month last year, according to HMRC. The figure was also down 3% on December’s sales, marking the weakest start for the year since 2015. Separate data show half of homes are now taking more than two months to sell. The past month has been the slowest February since 2013, with sales taking 72 days on average.
UK public sector posts unexpected budget surplus in January
Public sector finances improved in January with the Office for National Statistics (ONS) registering a £5.4bn surplus for the month, much better than the £7.8bn deficit predicted by economists. The public sector also borrowed £30.6bn less than forecast. Total borrowing came in at £116.9bn in the financial year to January. The improved figures are largely a result of stronger than expected tax receipts while the fall in wholesale energy prices brought down the cost of the Government’s energy price subsidies. However, spending on central government debt interest reached £6.7bn, the highest January figure since monthly records began in April 1997. Despite the positive figures, the Treasury said that “with debt at the highest level since the 1960s, it is vital we stick to our plan to reduce debt over the medium term.”
Private sector activity rises in February
The latest PMI survey from financial data company S&P Global show UK private sector activity rose for the first time in seven months in February. The S&P Global flash PMI, which takes a snapshot of activity in services and manufacturing, stood at 53 in February. This is well above the 50 mark that divides growth from contraction and up from 48.5 in January. Chris Williamson, chief business economist at S&P Global Market Intelligence, said the figures suggested "near-term recession odds have fallen considerably". But economists say the strength of the survey increase the chance of further rate increases from the Bank of England to tamp inflation. The PMI for the services sector rose to 53.3 in February from January's 48.7, its highest since June last year. However, manufacturing activity continued to contract, albeit less severely, with its PMI increasing to 49.2 from 47.0.