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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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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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Categorized | Financial

Martin Gilbert’s Viennese whirl

Posted on November 30, 2015

Martin Gilbert of Aberdeen Asset Management.©Charlie Bibby/FT

Aberdeen’s Martin Gilbert

Vienna gave birth to the waltz, a gentler dance than the elbow-jabbing jig that Martin Gilbert has been dragged into by Opec meetings in the city. A depressed oil price has put sovereign wealth funds in a spin, and led them to withdraw capital from fund managers — leaving the boss of Aberdeen Asset Management to preside over a dispiriting drop in assets.

Oil has spiralled down in price by 42 per cent in a year, as Saudi Arabia has sought to squeeze out marginal US shale operations. This has left the country, which we should describe as “oil-long” rather than “oil-rich”, with a burgeoning deficit. Saudi sovereign funds, like others worldwide, have thus been draining their money from emerging market investment funds of the kind run by Aberdeen.

    Aberdeen suffered net outflows of £34bn in the year to September — which represented the lion’s share of an overall £41bn fall in assets under management to £283bn. This Friday’s Viennese meeting of Opec is thought unlikely to foreshadow production cuts. That explains Mr Gilbert’s downbeat demeanour on Monday. He expects emerging market funds to go on shrinking, as long as oil remains depressed by maintained output and weakening Asian growth.

    The gravel-voiced investment veteran has managed to keep underlying profits before tax pegging along at £490m by cutting costs, notably at the Scottish Widows Investment Products division that he bought for £650m in 2013. But sales there have been constrained by jitters over regulation.

    Investors feel nervousness of their own about the dividend, which Aberdeen has increased 8.3 per cent this year. The group is left with net cash of £567m, but some £250m is required as regulatory capital, limiting scope for big new acquisitions. It could be “Goodnight Vienna” — as oldies term a wipeout — for progressive payouts unless oil prices recover.