Stress test implies end to UK bank capital hikes 1 Dec 2015 No institution failed the Bank of England’s 2015 exam, though RBS and StanChart missed on some metrics. The regulator also thinks capital ratios are only a little short of what’s needed in the longer term. That implies some lenders can pay higher dividends from their earnings.
Manchester City deal is good business for China 1 Dec 2015 Sport tends to consume capital rather than create it. Acquired kudos often bridges the gap. The $400 mln investment by two Chinese groups in one of the UK’s most successful teams could break the mould. Still, investors in English soccer still seem to value trophies above profit.
AB InBev’s SABMiller deal losing big-brand fizz 30 Nov 2015 The Budweiser brewer may sell SAB’s Peroni and Grolsch labels to speed antitrust clearances, reports say. The Molson venture in the U.S. has already gone and China may demand disposals. AB InBev will retain some gems, but the SABMiller empire could soon be unrecognizable.
Bank living-will laggards risk capital punishment 30 Nov 2015 Big American lenders will soon hear whether their resolution plans are to be rejected for a third time. New global bail-in rules remove the pressing need for regulators to break banks up. But in an election year they could punish insolence by insisting on higher capital buffers.
BHP’s Brazil disaster points to dividend cut 30 Nov 2015 The Anglo-Australian miner needs to conserve cash to pay for the Samarco dam disaster in Brazil. Forecast earnings already fall short of the $6.5 billion it paid shareholders last year. BHP would be wise to get ahead of the curve and scrap its commitment to progressive payouts.
Britain’s “Black Friday” better left on the shelf 27 Nov 2015 The Thanksgiving shopping orgy, recently adopted by the UK, is unhelpful for all concerned. Consumer credit is spiralling, confidence falling and retail margins are under pressure. If shoppers and retailers take a rational view of low prices, the festival will snuff itself out.
Barclays money-laundering rap is oddly reassuring 26 Nov 2015 The UK bank has been fined for cutting corners on a 1.9 bln stg deal for politically sensitive clients in 2011. The temptation for banks to bend the rules for VIPs is just as strong today. But more vigilant regulators are chipping away at the idea that this is business as usual.
Britain joins sovereign wealth party too late 26 Nov 2015 Creating a 1 billion pound sovereign wealth fund to encourage shale gas drilling in the UK could fail on two fronts. It won’t sway opponents of fracking in the UK countryside, and a financial windfall is unlikely given a global gas glut and unattractive shale economics.
UK’s Osborne is less austere than he makes out 25 Nov 2015 Finance minister George Osborne isn’t quite the budget zealot his Nov. 25 spending cuts suggest. The UK has run bigger deficits relative to GDP than France during his tenure. He has also executed tax and spending U-turns when required. It helps that gilt investors buy the hype.
UK housing market policy gets ever more misguided 25 Nov 2015 Britain is hoping its Help to Buy scheme will get more punters into the inflated housing market. That’s alongside 2.3 bln stg in subsidies to tempt private sector builders to sell at a discount. Even if this somehow creates 400,000 new homes, the rich gain more than the poor.
BBVA’s UK buy sees digital banks going mainstream 24 Nov 2015 The Spanish lender has bought 29.5 pct of mobile-only UK player Atom Bank. The 45 mln stg outlay is tiny beside Sabadell’s purchase of TSB. But BBVA joins Woodford Investment, Toscafund and Jon Moulton in backing Atom. Digital banks may find a way to carve out a valuable niche.
Playtech’s failed M&A makes gambling a bigger risk 23 Nov 2015 Regulators have forced Israeli billionaire Teddy Sagi’s company to drop its half-billion pound bid for UK currency trader Plus500. A related Irish deal could now fail too. With betting-industry customers consolidating, Playtech may have to pursue other finance-sector targets.
Dixon: How the EU could woo the UK 23 Nov 2015 The British prime minister wants to rework the UK’s relationship with Europe. Once complete, other EU leaders could launch a charm offensive to persuade Britain it is valued and influential, and to vote to stay in the union. Here’s what Merkel, Hollande, Renzi, et al could say.
C&W deal exposes John Malone’s paper-thin trackers 20 Nov 2015 The Latam and Caribbean cable operator’s $8 bln sale to the media mogul’s Liberty Global presents shareholders with three forms of payment. The C&W board is recommending the one without a tracking stock. That partly undercuts the reason for creating such shadow shares.
UK shuts stable door after HBOS horse has bolted 19 Nov 2015 Regulators are to look at whether those responsible for the bust lender’s demise should face censure. Judging by another report into why HBOS failed, the answer may well be yes. But the meaningful penalties remaining – pension clawbacks or big fines – look legally tricky.
Royal Mail is delivering in traditional style 19 Nov 2015 Shares in the UK postal service rose 6 pct on Nov. 19. Half-year revenue was flat but Royal Mail is squeezing costs. Hats off to CEO Moya Greene. Through old-fashioned hard work, the business is looking more and more sustainable. Still, the headwinds are unrelenting.
VW’s dieselgate may be Lonmin cash call decider 19 Nov 2015 The South African platinum miner wants to raise $407 mln to fund restructuring. The 46-for-one rights issue means investors that fail to subscribe will be diluted almost out of sight. Much of the investment decision rests on demand for catalytic converters as VW cleans itself up.
Willis could kill merger-of-equals conceit 18 Nov 2015 The UK-based insurance broker’s $18 bln union with U.S. consultancy Towers Watson is on the rocks. Investors have turned some $5 bln of promised synergy value into $1 bln of value destruction. A rescue would probably unbalance the economics, undermining the promised equality.
UK fund fee crackdown a welcome detour from TBTF 18 Nov 2015 Asset managers this year managed to avoid too-big-to-fail status. The FCA’s focus on whether they deliver a good service is a worthier target. As savers take more investment decisions themselves and banks expand in a capital-light sector, duff performance is a bigger problem.
Dialog shareholders should short-circuit Atmel bid 17 Nov 2015 The Anglo-German chipmaker’s $4 billion-plus bid for its U.S. peer has been opposed by activist Elliott Management. Both sides have put forward doubtful theories to make their case. But Elliott is right on one thing: the integration risks look too big.