Afternoon Financial Press Review
Below are the key headlines from today’s updated papers, featuring the Financial Times, The Times, The Telegraph, The Daily Mail & more - see the full Press section here.
Metro Bank shares crash after loans blunder revealed. Hundreds of millions wiped off value of company after bank says loans were wrongly classified. has revealed a major blunder in how it classifies its loan book, sending its share price crashing by 30% and wiping £600m off the value of the company. The bank, which has been opening new branches as established rivals cut back, revealed that hundreds of millions of pounds worth of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms, and should have been among its “risk weighted assets”. After the blunder emerged, Metro’s shares plummeted from £22 to about £15 as analysts feared the bank may have to raise fresh capital, just six months after tapping shareholders for £300m to finance its rapid expansion plans. When a bank has higher risk weighted assets (RWAs) regulators require higher amounts of capital to be set aside.
saw total sales across its branches in railway stations and airports rise by 16% in the five months to 19 January. 8% of the group’s travel arm sales boost came from InMotion, the US travel business it acquired in the autumn. Same-store sales were up 3%, excluding InMotion. On the High Street, WH Smith’s sales slipped by 2% on a like-for-like basis over the period. Overall, the group’s like-for-like sales remained flat in the 20-week period. Chief executive Stephen Clarke said that despite seeing sales fall, its High Street performance was still the third best performance in the last 15 years. Mr Clarke said that consumer spending and confidence was ‘as challenging as it has been.’ He added: ‘It’s been challenging now for around five years and we didn’t see it was any different this Christmas.’
Barclays Four ‘hid payments to Qatar to stop bank looking weak’, court told. The former boss of kept payments to Qatar hidden to avoid the bank looking “weak” and potentially putting off other investors during the 2008 global financial crisis, a court heard on Wednesday. Top Barclays bankers made secret payments to Qatar in exchange for £4 billion to stave off the “dire” consequences of a government bail-out, Southwark crown court heard today in the long-anticipated trial of four former top executives. The executives at the “very top” of the banking giant believed the independence of Barclays was “in jeopardy” when it agreed to pay £322 million of fees which were hidden from the market, it is said. The bank feared falling into government hands during the financial crisis, and allegedly agreed to Qatari Holdings’ inflated fee demands to stay afloat.
Blow for Serious Fraud Office as last boss is cleared of fraud. The ex-finance boss of Tesco on Wednesday became the last director to be acquitted over the supermarket’s accounting scandal after a judge said there was no case against him. Carl Rogberg, who suffered a heart attack in February, was accused of fraud and false accounting with Chris Bush, Tesco’s former UK boss, and John Scouler, an ex-commercial director. But he did not stand trial with his colleagues in September until he recovered. In December, a judge dismissed the charges against Bush and Scouler halfway through a retrial because of lack of evidence. Today’s result ends the trial brought by the Serious Fraud Office over a £250 million profit black hole at the groceries giant, in another embarrassing defeat for the SFO
O2 and line up a future deal for shareholders. While BT’s top brass were gladhanding in Davos, O2 and Vodafone were putting the finishing touches on a deal that should speed the roll-out of the next generation of mobile coverage across the UK. The pair have long shared phone masts as a natural way of saving on the costs of rolling out network coverage. Their masts’ joint venture, known as CTIL, hastened the spread of 3G and 4G to millions of people. So today they agreed to extend the network sharing partnership to 5G, in a move that makes total sense. However, for shareholders, there’s a bigger prize in the pipeline. The pair also signalled that they will increase the independence of the CTIL operation with a view to selling it.
Burberry warns of ‘tens of millions’ hit risk from no-deal Brexit. on Wednesday sounded the alarm over a no-deal Brexit, with Britain’s largest luxury goods firm warning it will be “complex” and could cost it tens of millions of pounds. The FTSE 100 fashion designer, which has so far kept its cards close to its chest on Brexit, today used its third-quarter update as an opportunity to outline how it could be affected after March. Finance chief Julie Brown admitted crashing out of the EU without a deal could be bad for the business, and said: “It would be very complex to manage.” She warned switching to new trade tariffs will cost the brand, known for its trademark trenchcoats, in the “low tens of millions of pounds” a year, although it hopes to mitigate the hit .
Nearly a thousand staff are expected to lose their job on Wednesday as 70 stores will shut. The café chain collapsed into administration last night and KPMG has been appointed to try and find a buyer for all or parts of the company. In total, more than 3000 jobs are at risk across the business, which has around 200 stores and a string of concessions, including in department store chain Debenhams and grocer Sainsbury’s. Some concessionaires are understood to be trying to move staff to new roles where possible. is the most exposed of the listed landlords to Patisserie Valerie’s collapse as the malls owner and its rivals faced the prospect of a number of shops becoming vacant.
Brexit caution sees Marston’s trim pubs expansion plan. Pubs firm on Wednesday took the axe to its plans to open new boozers, blaming the confused political landscape as a result of Brexit. Chief executive Ralph Findlay said: “Regrettably the government doesn’t know what’s going to happen in March. So we do think it is appropriate to be more cautious.” He added: “We operate in increasingly uncertain times from a political and macro-economic perspective.” Investments in new-build sites will be slashed to £25 million from around £50 million per year from 2020 onwards. The pub operator and brewer is also looking to sell £80-£90 million of non-pub properties in 2020-2023. It wants to cut its net debt by £200 million to £1.2 billion by 2023.
AJ Bell raking in funds despite the rocky markets. , the newly floated funds platform that’s made a fortune for founder Andy Bell, is still hoovering up cash despite turbulent stock markets. In the three months to December the firm drew in £1.2 billion in funds, 20% ahead of last year, directly from investors as well as from the thousands of financial advisers who use its platform. Customer numbers rose 4% to 190,498 over the period when AJ Bell made its stock-market debut. It couldn’t defy the gravity of falling markets, however. Plunging global markets wiped £2.7 billion off the company’s total assets under management to £44.2 billion.
Pub group has warned its investors that its pre-tax profits for the first half of its current financial year will be lower than expected. The group, run by Brexit-supporting boss Tim Martin, said its labour costs had increased by £30million in recent months. As well as higher costs for staff, the group said it had also been forking out more for interest repayments, utility and repair bills, and had been affected by depreciation. The pub chain reported a 7.2% rise in like-for-like sales for the 12 weeks to 20 January, with total sales up 8.3%.
Computacenter upgrades its revenue to £4.1bn. Higher IT spending in Britain and Germany has helped to upgrade its full-year results forecast, sending its shares to the top of the mid-cap index. In a trading update, the provider of cloud services and seller of PCs, servers and software to big listed companies, said that overall revenue for the year ended December 31 grew by 7% to about £4.1 billion, excluding currency fluctuations. The group’s international division saw a 13% rise in fourth-quarter revenue, against a 10% rise in the UK, an 8% rise in Germany and a 4% fall in France. It comes after the company reported a 3% dip in third-quarter revenues in October, sending shares down 13% in a single day. However, the board now expects full-year results to be marginally ahead of expectations. Investors were impressed, with the statement sending shares up 72p, or 7%, to £10.90.
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