BANKING
RBS to keep ten closure-threatened branches open
RBS is to keep 10 closure-threatened branches open until at least the end of the year. The bank said the use of the branches would be reviewed by independent research over that period. If the study finds that there is greater usage of a branch, its future will be the subject of a further review. RBS said the decision was the result of "listening to the concerns of customers" after a public outcry over the decision to shut branches in small towns and villages.
Finance firms need greater clarity on post-Brexit terms
Elisabeth Stheeman, a member of the Bank of England’s Financial Policy Committee (FPC), has told MPs that the financial sector needs to be provided with greater clarity on Brexit in order to plan ahead. The former Morgan Stanley banker said firms would have to “pull the trigger on moving operations” as early as March this year if a clear plan was not provided. She added that derivatives, and insurance contracts were the most urgent areas requiring clarity, echoing comments from the FPC made on Monday.
Bank of England agrees new forex code
The Bank of England has signed up to a new global code of conduct to avoid more currency manipulation scandals. “Fair, transparent and robust markets, underpinned by high standards, benefit all participants,” said Dave Ramsden, the BoE's deputy governor for markets and banking. The Bank has also agreed commitments to the UK Money Markets Code and the Global Precious Metals Code.
PRIVATE EQUITY
Venture investment in UK fintech more than doubles
New data shows fintechs raised $1.8bn of venture capital investment last year, up more than 150% from $704m in 2016 - the year of the UK's vote to leave the EU.
INTERNATIONAL
Market volatility highlights "vicious cycle" of algorithmic trading
The "Vix" and "VVix" Wall Street fear gauges, which track fluctuations in the S&P 500 index, have hit their highest levels since the flash crash of August 2015 in the last few days, reflecting continuing global market volatility. Kyle Voight and Matthew Moon, analysts at Keefe, Bruyette and Woods, explained that a crowded short trade on volatility may have exacerbated the sell-off. "A Vix spike past a certain level could have caused outflows and/or covering on short vol trades, which then in turn causes more market selling and higher implied volatility – a vicious cycle to an extent," they added. Meanwhile, Credit Suisse has said it would begin early redemption of its short-volatility product after Wall Street suffered its worst day in six years.
BNP falls short of forecasts
BNP Paribas reported quarterly net profit that fell short of market forecasts on Tuesday. The French bank said net profit slipped to €1.43bn in the fourth quarter from €1.44bn a year earlier, below the €1.59bn expected by analysts. Revenues also fell 1.2% to €10.53bn, versus the €10.47bn predicted by analysts, although BNP Paribas increased its dividend by 11.9% from last year to €3.02. The bank said it was now targeting a return on equity of above 10% in 2020 versus a target of 10% disclosed in March last year.
StanChart could cut investment banking jobs
Standard Chartered is understood to be looking to drive returns by boosting lending to key industrial sectors and top clients, in a move that could cut about a dozen investment banking jobs as it dials back in areas like private equity. The changes form part of a two-year overhaul at the bank - triggered in part by a spike in non-performing loans in China and India - that investors hope will help the bank return to higher revenue growth.
Virtual banks face restrictions in HK
The Hong Kong Monetary Authority has said that virtual banks looking to set up in Hong Kong will need to have at least HK$300m (£28m) in capital, and cannot impose a minimum account balance or low balance fees. Officials will receive feedback until 15 March and the final regulations will be issued in May.
Intesa Sanpaolo to halve bad debt under 4-year plan
Intesa Sanpaolo is planning to halve its stock of bad loans and boost net income over the next four years. Shares in Intesa rose 1.8% on the news.
AUTOMOTIVE
US tax reform boosts Toyota
Toyota has revealed that profits nearly doubled in the first nine months of the year to ¥941.8bn (£6.1bn) on vehicle sales just 35,000 higher at 6.7m vehicles over the period compared with the same period the previous year. The Japanese car manufacturer said tax changes in the US had given it a ¥292bn boost. Revenues over the period rose 8.1% to ¥21.8trn.
CONSTRUCTION
Ex-Carillion chairman takes blame for collapse
Former Carillion chairman Philip Green has said he takes the blame for the collapse of the company last month. Mr Green, who was in the post when the construction group went into liquidation, said his responsibility was "full and complete, total - no question in my mind about that. Not necessarily culpability but full responsibility".
FINANCIAL SERVICES
Bitcoin falls below $6,000
The value of Bitcoin has fallen to below $6,000 - its lowest price since November 2017. The price fell to $5,947.40 (£4,256.44) on Tuesday, according to a price index run by news website Coindesk. The latest fall comes a day after several major US and UK banks banned customers from using credit cards to purchase the digital currency. Meanwhile, the new head of the Bank for International Settlements, Agustín Carstens, has warned that Bitcoin threatened to undermine public trust in central banks and posed a threat to financial stability, as he signalled a global clampdown. Separately, VersaBank is building a virtual safety deposit box for cryptocurrencies and other digital assets. The Canadian bank plans to have its digital vault ready by June and offer the service to global customers.
Hargreaves Lansdown strong amid market chaos
Hargreaves Lansdown has reported strong profits and sales amid the global stock sell-off. The fund giant saw half-year profits up 12% to £147m, while sales rocketed 43% to £3.34bn and client numbers rose by 61,000 to over 1m. Hargreaves said AUM rose 9% to £86bn.
Investec hands over to next generation
Investec CEO Stephen Koseff is stepping down after 40 years at the helm, along with MD Bernard Kantor and FD Glynn Burger. London-based fund management boss Hendrik Du Toit and board chairman Fani Titi will become co-chief executives.
L&G appoints Baldock
Legal & General has named Henrietta Baldock as the non-executive chairman of its principal operating subsidiary, Legal & General Assurance Society, with Ms Baldock joining from Bank of America Merrill Lynch.
Derivatives exchange CurveGlobal readies for fixed income push
CurveGlobal has raised £20m in a second round of funding to fuel the London-based derivatives exchange’s push into fixed-income markets.
LEISURE AND HOSPITALITY
Eat bites off more than it can chew
Eat is reportedly considering potential store closures as part of a restructuring of the business. The sandwich chain, which is owned by Lyceum Capital, has seen its store estate swell beyond 100 since it was founded more than 22 years ago. However, the scale of the business is dwarfed by rival Pret a Manger which has more than 450 outlets.
Virgin opening first hotel outside US
The UK's first Virgin Hotel is to open in Edinburgh in 2020. The 225-room hotel will take over the 19th-century India Buildings, on Victoria Street in the Old Town, and will house multiple bars and restaurants.
MANUFACTURING
Babcock confident while lowering expectations
Babcock has revised down its full-year revenue guidance, between £5.3bn to £5.4bn, around 2% lower than previous projections. The engineering firm indicated a strong pipeline however, with short-term bids in process of £12.5bn and a "near-term opportunity" pipeline of £31bn.
REAL ESTATE
William Pears Group reveals falling profits
William Pears Group has revealed that pre-tax profits fell 46% to £50.8m in the 12 months to April 2017. The family-owned Hampstead-based firm, which also has lending and investment divisions, said turnover rose 21% to £95m in the period, boosted by the sale of a site in Bloomsbury for £10m, while rental income increased, from £20.7m, to £23.3m.
Warnings over London's commercial property prices
BoE FPC member Elisabeth Stheeman has warned that the sector should beware central London's "fully valued" commercial property market. While commercial UK real estate prices as a whole remain 13% below their 2007 peak, she noted, they are 22% above that level in central London.
RETAIL
New Look sales and profits slide further
Sales and profits at New Look continued to fall in the third quarter, EBITDA fell to £43.8m in the 39 weeks to December 23, from £153.8m in the same period a year earlier. Revenue was down 6.3% to £1.07bn, with like-for-like sales falling 10.6%. Online sales on its own website were down 15%, but were up 21.9% on third-party e-commerce sites.
ECONOMY
OBR head calls for public scrutiny of civil service Brexit forecasts
Robert Chote, the chair of the OBR, has said the models used for Brexit economic forecasts should be made public and that trying to hide results was counterproductive. A recently leaked document led to accusations civil servants were generating predictions that would only ever make leaving the customs union look bad. Mr Chote said it was right that the assumptions used for forecasts were scrutinised by a sceptical public and that perhaps the government ought to have invited Brexit-supporting economists onto an advisory panel to oversee the modelling process.