Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Zoopla wins back customers from online property rival

Zoopla chief executive Alex Chesterman has branded rival OnTheMarket “a failed experiment”, and said that his property site was winning back customers at a record rate. OnTheMarket was set up last year, aiming to compete with Zoopla and Rightmove, the UK’s two biggest property portals. It allowed estate agents to list their properties more cheaply […]

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Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

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BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Categorized | Insurance

Partnership first-half sales disappoint

Posted on August 29, 2013

Partnership Assurance has become the latest recently floated company to publish disappointing debut results after the specialist retirement group missed first-half sales forecasts, pushing the shares down as much as 9 per cent.

The assurer, whose backers Cinven fetched about £350m when the private equity house reduced its stake in the listing three months ago, on Thursday cautioned that recent regulatory reforms had “disrupted” annuities business.

    Partnership, which focuses on offering higher pensions to retirees with low life expectancies, wrote £631m worth of new business in the six months to June 30.

    Although up by 12 per cent from a year ago, that was 5 per cent shy of the number pencilled in by analysts at Bank of America Merrill Lynch, which brought the company to market along with Morgan Stanley.

    Investors including the Government of Singapore Investment Corporation, were lured to the listing of what was one of Britain’s fastest-growing private companies.

    However, the sell-off on Thursday pushed shares in Partnership, whose board is headed by London Stock Exchange chairman Chris Gibson-Smith, down 27p to 435p.

    Unlike motor insurer Esure – which also floated this year but lost more than a fifth of its market capitalisation when it paid a smaller than expected interim dividend – shares in Partnership remain at more than their listing price, of 385p.

    Alan Devlin, analyst at Barclays, described the first-half as “disappointing” but added that if the factors Partnership cited were “genuinely one-off” then the “investment thesis is on track.”

    Steve Groves, chief executive, said fresh EU rules to prevent insurers using consumers’ gender to help determine premiums had prompted men to buy annuities before the reforms took effect at the end of the year.

    Meanwhile, he maintained, some financial advisers who bring it business had been distracted by a regulatory shake-up to their industry, including a ban on receiving commission.

    “We are slightly behind where we expected,” Mr Groves acknowledged. But he added: “We’re not dealing with major variances.”

    “The impact of the disruption I think was fully disclosed” to investors in advance of the stock market launch, he added.

    Partnership said it remained on track to deliver annual operating profits consistent with City expectations, of about £137m.

    The chief executive added Partnership had outperformed rivals and denied it had been hurt by intensifying competition from mainstream annuity providers such as Legal & General, Friends Life and Scottish Widows.

    The initial public offering cost Partnership £15.6m in fees for advisers and other expenses, contributing to a fall in pre-tax profits from £17.5m to £8.56m.

    Stripping out these and other exceptional items, the company said operating profits rose 31 per cent to £59.3m.

    The company paid no interim dividend but said it expected to make a payout for the second half. Diluted earnings per share fell from 5p to 1p.