Daily News Roundup: Wednesday 13th January 2016
Daily news bulletin featuring top stories from today s media headlines: Investors expect HSBC to stay in London, Government tax adviser sorry for BBA role and Virgin appoints executives from rivals.
Investors expect HSBC to stay in London
Major investors in HSBC think the bank is more likely to remain headquartered in London, following changes to the political and regulatory landscape, than when the bank announced a review nine months ago. Richard Buxton, chief executive of HSBC shareholder Old Mutual Global Investors, said: I do think the mood music changed materially after the election, the budget, and the Prudential Regulation Authority clarity on bank capital. Meanwhile, Martin Gilbert, chief executive of Aberdeen Asset Management, HSBC s sixth-biggest shareholder, said: The logistics of moving headquarters out of London are so vast I suspect much as it might want to move its headquarters, HSBC will probably on balance stay here.
Government tax adviser sorry for BBA role
Former Conservative MP, and former head of the British Bankers Association, Angela Knight has told MPs on the Treasury select committee she was sorry she ended up at the lobby group at the time of banking crisis and the Libor rigging scandal. Ms Knight admitted she had wanted the Bank of England to have observer status over Libor and had disagreed with the judicial challenge the banking industry took over compensation for the PPI scandal, brought to a sudden halt shortly after Lloyds Banking Group began paying out compensation in May 2011. MPs on the committee were taking evidence about her appointment as chair of the Office of Tax Simplification.
Virgin appoints executives from rivals
Virgin Money has hired two new executives from its rivals. Peter Bole, currently CFO at Tesco Bank, will join in 2017 to carry out the same role. As part of the move, Mr Bole will be paid a 500,000 salary, along with a bonus worth up to three times his fixed pay, and a one-off share and cash award of up to 1.75m to compensate him for forfeited pay at Tesco. Meanwhile Hugh Chater, who is currently in the retail private banking division of RBS, will join Virgin Money in June as chief commercial officer.
Banks improve their image
New research shows four of the UK s 10 most improved brands over the last year are financial institutions. The Co-operative Bank led the improvers, driven by a concerted advertising campaign to restore faith in its brand. RBS, Lloyds and Barclays also made YouGov s list of Britain s most improved brands.
Terra Firma cuts salaries and dividends
Terra Firma Capital Partners has cut staff salaries and axed dividend payments after a 16% profit dip. Guy Hands private equity group reported that profits in the year to March 2015 hit a three-year low, filings at Companies House showed. Net profits at Terra Firma fell 16% to 1.87m. Turnover dropped to 28.3m, from 34.2m in 2014. It paid out 17.5m in staff wages in the year to March for its 86 employees, down from 22.3m in 2014. Terra Firma also paid 552,000 to HMRC, down from 721,000 in 2014.
Bentley sales fall
Sales of British-made luxury cars are down around the world, according to the latest figures from Bentley, which said it had delivered 8% fewer vehicles from its plant in Crewe, a worse result than the 7% fall by Rolls-Royce.
Airbus flying high
Airbus delivered a record number of planes in 2015. The European company delivered 635 planes last year, compared with a tally of 762 jets for Boeing. However, Airbus said it had 1,036 orders after cancellations, compared with 768 for the US company. The number of orders fell by 29% and 46% respectively following two years of strong growth. Airbus delivered 491 jets from the A320 family, 103 A330s, 27 A380 super-jumbos, and 14 A350 XWB planes.
Direct Line s flood payouts estimated at 140m
After assessing 90% of its affected customers, insurer Direct Line has estimated its share of the cost of this winter s floods will be between 110m and 140m, or about 35m beyond the firm s predictions for weather-related property claims each year. Direct Line said its household claims were expected to be between 80m and 100m, compared to normal yearly claims of 80m. Claims in its commercial unit are expected to be between 30m and 40m about 15m to 25m higher than an average year.
AAM acquires fintech group
Aberdeen Asset Management (AAM) has added nearly 2bn to its assets under management after completing a takeover of financial technology services group Parmenion. AAM said the move puts it at the forefront of a digital revolution. The value of the deal, which took in Bristol-based Parmenion Capital Partners (PCP) and sister company Self Directed Holdings (SDH), was undisclosed. PCP and SDH have developed financial technology platforms which are aimed at providing investors with portfolios appropriate to their needs. The firms have more than 900 clients.
Profits rise for Michael Page
Michael Page has reported that UK gross profit, which makes up about a third of the its overall profits, rose 2.1% in the three months ending December to 36.2m compared with an 11% rise over the same period last year. Gross profit rose 5.3% in the final quarter on a constant currency basis to 135.6m, leading to full-year profits rising 9.2% to 555.9m.
Help to Buy London launches in February
A government scheme offering homebuyers in London loans of up to 240,000 to help them buy new-build properties will go live on 1 February. The extension of Help to Buy London, which was announced in the chancellor s autumn statement, will be available to buyers of new properties in Greater London costing up to 600,000. As under the existing scheme, borrowers will need to be able to raise a deposit of at least 5%, and to qualify for a normal mortgage. They will also have to show that they can afford interest payments on the government loan when the five-year interest-free period ends.
Deutsche Bank acquires Stratford development
Deutsche Bank has acquired an office development in Stratford, East London, that will house the Financial Conduct Authority s headquarters, in a 370m deal. The German bank s asset management arm has agreed to forward fund the 515,000 sq ft building, which forms part of a major 2.3bn development next to the Queen Elizabeth Olympic Park known as the International Quarter.
Morrisons delivers festive surprise
Morrisons has reported better-than-expected sales over the Christmas shopping period compared with a year earlier. The supermarket chain said like-for-like sales, excluding fuel, rose 0.2% in the nine weeks to January 3rd. It is the first time the supermarket has reported a rise in sales for more than a year.
Carney: Growth remains sustainable
Mark Carney has insisted that Britain is not in the grip of a debt-fuelled recovery , stressing that the UK s economic growth remains sustainable. The Bank of England Governor said private sector debt had come down substantially since the financial crisis, but warned that rising levels of household debt still posed an indirect threat to the economy. Household debt levels in the UK are expected to rise until the end of the decade, hitting 163% of GDP from current levels of 146%, according to the OBR. Meanwhile, separate figures show household debt has jumped by more than 40% in the past six months. Average family debt excluding mortgage borrowing stands at 13,520, up from 9,520 six months ago. The latest figure is the highest since the summer of 2013, when the average family owed 16,300, according to Aviva.
Industrial output falls in November
Industrial output fell 0.7% in November from October the sharpest fall since early 2013, according to figures from the ONS. Manufacturing output shrank by 0.4% for a second month running, with a fall in pharmaceutical production having the biggest impact on total factory output. Analysts warn the figures suggest manufacturing growth remains fragile, leaving Britain s recovery relying on the service sector and consumer spending. After a dire performance through much of 2015, November s industrial production figures suggest no change in the manufacturing sector s fortunes, said research group Capital Economics. Compared with a year ago, industrial output was up 0.9%, the weakest annual growth since July. Output from the manufacturing sector was down 1.2% from a year earlier.
- ^ Tuesday 12th January 2016 (www.btgfc.com)
- ^ Monday 11th January 2016 (www.btgfc.com)
- ^ Friday 8th January 2016 (www.btgfc.com)