HSBC sees increase in Q1 income
HSBC has reported income of $5.8bn (£4.2bn) for the January-to-March period, an increase from $3.2bn a year earlier. Group chief executive Noel Quinn commented: "Global banking and markets had a good quarter, and we saw solid business growth in strategic areas, including Asia Wealth and trade finance, and mortgages in Hong Kong and the UK. We also strengthened our lending pipelines in our retail and wholesale businesses." Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown noted: "There doesn't look like there is an immediate cure for the bank's underlying ailment, the ultra-low rates plaguing the banking sector. HSBC is not alone in feeling the squeeze of net interest margins, which tightened again slightly over the quarter, but other banks with huge investment banking arms have been able to capitalise on the trading surge over the past year.”
BBRS has cost £23m so far with no cases addressed
The Business Banking Resolution Service finally went live in February after a series of delays, the Times reports, but since its inception in 2019 the body has cost more than £23m without having compensated a single business. The BBRS was set up to give small and mid-sized businesses an independent view on banking disputes. Kevin Hollinrake, the Conservative MP and co-chairman of the all-party parliamentary group on fair business banking, said: “These costs are eye- watering.” However, he added: “If the BBRS fulfils its requirement to provide justice and fair compensation of potentially hundreds of millions of pounds to businesses and individuals, then it will be money well spent.”
TSB 'pop-up' services announced
TSB has announced plans to establish 43 'pop-up' bank services across the country in areas where customers have to travel for over 20 minutes to reach a branch. Consumer groups warned however that such facilities cannot fully replace the services offered by a permanent branch. Meanwhile, an access to cash pilot project is launching today that will see local shops provide cashback and Post Offices offer banking services. Up to 200 bank hubs could be created across the country if the trial proves successful.
Investment in UK tech set for record year
Venture capital investment into technology start-ups in the UK and Ireland is on track to set a record in 2021, according to data business PitchBook. Technology companies in the UK and Ireland raised £5.3bn in the first quarter of 2021, placing the sector on track to surpass last year’s funding record of £13.4bn. “In this post-Brexit era, UK-based companies have generally been able to attract capital and conduct business as usual,” PitchBook wrote in its new European Venture Report. “In the long run, prominent UK-based start-ups could play a key role in retaining talent and attracting new overseas investment,” the report added.
Archegos losses mount at Nomura and UBS
Nomura has reported a $2.9bn hit after the collapse of Archegos Capital, with UBS revealing a $861m loss. Losses at Nomura saw the firm suffer a $2.3bn dent in profits for the financial year ending March 31, with an additional loss of $570m expected from the process of unwinding the Archegos positions. Nomura’s net profits for the full year ended in March were $1.4bn, a fall of 29% from fiscal 2019.
Turkish banks reluctant to finance canal project
Turkish lenders have cited environmental concerns and investment risks as they shy away from financing President Tayyip Erdogan's planned Istanbul canal. Six Turkish banks, including Garanti Bank, Is Bank and Yapi Kredi, are signatories of the U.N.-backed Principles for Responsible Banking framework, with Reuters quoting one source as saying that "Definitely we don't want to give a loan to this kind of project because of the environmental issues.”
Swedbank reports profits
Swedbank has reported better-than-expected net profit and resilience to bad debt, with CEO Jens Henriksson commenting: "During the quarter, we increased our lending by 3.8%, but the market increased by 6%, so we did not keep up.” First-quarter net profit was 4.98bn Swedish crowns ($593.56m) from a loss of 1.69bn a year before, beating analysts’ estimates of 4.44bn.
JP Morgan employees in the US expected to return to the office by July
US employees of JP Morgan Chase have been told that they are expected to return to the office by July. Employees will be brought back on a rotating basis and there will be a 50% building occupancy limit. In a memo seen by Bloomberg, JP Morgan also said it “strongly” encourages employees to get vaccinated.
Fresh investment drives Lotus to build electric sports cars in UK
Lotus will add 250 more staff to its 1,500 workforce in Hethel, England, as the company looks to increase sales of electric sports cars tenfold. A £2.5bn investment over 10 years will drive an increase in production to tens of thousands of cars per year worldwide, up from the 1,378 it made in 2020. The marque is planning to reveal its final combustion sports car, the Lotus Emira, on July 6 before it switches to electric vehicle production along with an increased focus on SUVs.
IAG considers legal action over Heathrow charges hike
The owner of British Airways, IAG, is considering launching a judicial review to block a decision by the Civil Aviation Authority to allow Heathrow Airport to raise an extra £300m through increased passenger charges to cover pandemic losses. A spokesman for IAG said: “The airport has deliberately rewarded its investors at the expense of consumers and now the regulator is asking passengers to bail it out." Former BA boss Willie Walsh, now head of airlines trade body IATA, described the plans as "madness". Mr Walsh added: “The CAA have caved to pressure from Heathrow. Consumers will pay millions more to travel, to the benefit of Heathrow’s shareholders.”
General Electric revenues fall in ‘difficult environment’ for aviation
General Electric posted a net loss of $2.8bn in the first quarter, compared with net income of $6.1bn in the same period last year owing to a "still difficult environment for aviation.”
France says give us your fish or no City access
Clement Beaune, the French minister for European Affairs, has threatened British financial services firms with being blocked from accessing Europe if the UK does not give French fisherman access to British waters. The comments come less than a week after Mairead McGuinness, the commissioner for financial services, said the EU was not under any pressure to help provide UK firms with access. But the Telegraph suggests the attitude could only encourage the UK to gain better access to non-EU markets and forge new opportunities through regulatory reform.
BNP Paribas seeks permission for China securities company
The China Securities Regulatory Commission (CSRC) has received an application from France's BNP Paribas to establish a securities company in the Asian nation. The lender stated: "BNP Paribas continues to explore all of its options for growth in the China market," and it is assessing ways to "enhance its local capabilities and delivery to clients in mainland China.”
Nutmeg surpasses £3bn in assets
Nutmeg surpassed £3bn in assets under management during the first quarter of 2021. The firm saw a 53% increase in clients to more than 130,000, compared with the same period in 2020. Net inflows for the first quarter of 2021 increased by 230%. However, losses at the robo-adviser widened to more than £21m in 2019, an increase on the £18.4m loss the firm reported for 2018.
COVID-19 test firm Abingdon’s shares crash 30%
Shares in Abingdon Health fell by almost a third after the diagnostics firm issued a profits warning amid an escalating row with the Government over unpaid bills for COVID-19 tests.
LEISURE & HOSPITALITY
Staycationing Brits bring Premier shine to Whitbread
Premier Inn is providing a boost to owner Whitbread with its hotels enjoying a booking boom as Britons opt for a staycation summer. Whitbread CEO Alison Brittain said “anywhere with a beach or a view” was already all but fully booked for the summer – a sliver of a silver lining for a group that has slumped to a £1bn full-year loss as a result of the pandemic.
UK manufacturers’ profitability drops to decade low
Figure from the ONS show UK manufacturers’ profitability fell sharply for a second consecutive year in 2020, dropping to 8.8%, the lowest since 2010.
MEDIA & ENTERTAINMENT
Eutelsat takes 24% stake in OneWeb
The French state-backed satellite company Eutelsat is paying $550m (£395m) for a 24% stake in British satellite project OneWeb, which the UK rescued in a joint venture with Indian telecoms giant Bharti last year. OneWeb is competing with Elon Musk’s SpaceX which has already started providing broadband for customers in Britain using its Starlink network of satellites. Kwasi Kwarteng, the Business Secretary, said the investment marked a step forward for OneWeb's desire to offer global broadband connectivity.
Pandemic drives Alphabet’s profits up
Alphabet’s revenues jumped 34% to $55.31bn in a record-breaking first quarter, lifting net profits to $17.93bn. An increase in spending on digital advertising during the pandemic pushed up sales at its Google search business by 30% to $31.88bn while YouTube advertising revenues were up by 49% to $6.01bn. Separately, Microsoft also surpassed expectations with revenue up 19% to $41.7bn.
Profits surge at Telegraph Media Group
The Daily Telegraph has broken the 600,000 paying subscribers milestone, hitting 603,000 across print and digital as of the end of March. Telegraph Media Group enjoyed a 76% jump in operating profits before exceptional costs, according to a trading update from the company on Tuesday.
News UK scraps plans for TV news channel
News UK has abandoned plans for a TV news channel with CEO Rebekah Brooks declaring the idea "not commercially viable”. However, the company, owned by Rupert Murdoch, will look to provide news programming for streaming platforms instead.
Liverpool FC accounts reveal loss
Liverpool football club has announced a loss of £46m in its latest accounts, representing an £88m downturn on the year earlier period. The club estimates that it will have suffered a financial hit of some £120m by the time supporters are allowed back into football grounds, with accounts revealing that media revenue was down by £59m to £202m this year.