Banks, Financial

Banking app targets millennials who want help budgeting

Graduate debt, rent and high living costs have made it hard for millennials to save for a house, a pension or even a holiday. For Ollie Purdue, a 23-year-old law graduate, this was reason enough to launch Loot, a banking app targeted at tech-dependent 20-somethings who want help to manage their money and avoid falling […]

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Economy

Eurozone inflation climbs to highest since April 2014

A welcome dose of good news before next week’s big European Central Bank meeting. Year on year inflation in the eurozone has climbed to its best rate since April 2014 this month, accelerating to 0.6 per cent from 0.5 per cent on the back of the rising cost of services and the fading effect of […]

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Financial

Wealth manager Brewin Dolphin hit by restructuring costs

Profits at wealth manager Brewin Dolphin were hit by restructuring costs as the company continued to shift its focus towards portfolio management. The FTSE 250 company reported pre-tax profits of £50.1m in the year to September 30, down 17.9 per cent from £61m the previous year. Finance director Andrew Westenberger said its 2015 figure was […]

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Financial

Travis Perkins and Polymetal to lose out in FTSE 100 reshuffle

Builders’ merchant Travis Perkins and mining company Polymetal face relegation from the FTSE 100 after their recent performances were hit by political events. The share price of Travis Perkins has dropped 29 per cent since the UK voted to leave the EU in June, as economic uncertainty has sparked concerns among some investors about the […]

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Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Categorized | Banks

Week in Review, September 24


Posted on September 24, 2016

Week in Review

A round up of some of the week’s most significant corporate events and news stories.

Apple looks to McLaren for electric vehicle formula

Mclaren 570 GT montage with apple logo

Apple’s secretive electric car project has been under way for more than two years, but evidence of its existence has so far been scant. This week’s revelation of the iPhone maker’s interest in McLaren Technology Group, the British supercar engineer and racing team owner, is the clearest sign yet of its intent to upend the automotive industry, writes Tim Bradshaw.

Over the summer, Apple discussed a potential acquisition or strategic investment in McLaren, people familiar with the negotiations told the Financial Times. This could value the Woking, Surrey-based company at up to £1.5bn. The sum may be small for Apple, the world’s most valuable company with more than $200bn in cash held offshore, but it would represent a rich premium for the lossmaking automotive group, which is owned by its chairman Ron Dennis, Mansour Ojjeh, and Mumtalakat, Bahrain’s sovereign wealth fund.

The Top Line

When is insider trading not insider trading?

Leon Cooperman, chairman and chief executive officer of Omega Advisors Inc., speaks during a Bloomberg Television interview in New York, U.S., on Tuesday, Oct. 13, 2015. Cooperman said the U.S. Securities and Exchange Commission needs to address market structure problems caused by super-fast computers. Photographer: Chris Goodney/Bloomberg

Hedge fund founder Leon Cooperman will find out in court, says Brooke Masters

McLaren is best known for its Formula 1 team, but Apple’s interest is said to focus on its engineering expertise, particularly when it comes to using novel materials and manufacturing techniques, as well as its intellectual property.

While Apple declined to comment, McLaren sought to play down the report, saying in a statement that it “is not in discussion with Apple about any potential investment”. However, the company did not say whether it had been approached previously.

The circumstances surrounding the potential deal may have changed in recent weeks, amid a shake-up in the Apple car project. After Bob Mansfield, an Apple veteran, came in to lead the unit earlier this summer, its priority has shifted towards developing a fully autonomous system, people close to the company have said. Dozens of staff have left Project Titan, as the automotive team is codenamed, in recent weeks, following the strategic reboot.

Nonetheless, the talks with McLaren signal that Apple is prepared to look outside the company for expertise in breaking into a new market. That echoes its $3bn acquisition of Beats Electronics two years ago, which accelerated Apple’s move into digital music streaming, as well as paving the way for the iPhone 7’s shift to wireless headphones.

● Related Profile: Ron Dennis: The man at McLaren’s wheel
● Lex note: Apple — chequered future

● Robert Shrimsley column: Apple Car: breathlessly redefining the future of personal transport

US unveils national policy for self-driving car rollout

epa04744356 Tinosch Ganjineh (L) Project Leader AutoNOMOS, and Daniel Goehring, Project Leader Self-Driving Cars Intelligent Systems and Robotics Freie Universitaet Berlin (R) drive in a driverless car, presented by Swiss communication company Swisscom, during a press event in Zurich, Switzerland, 12 May 2015. In cooperation with UVEK (the Federal Department of Environment, Transport, Energy and Communications) and Germany's Autonomos Labs, Swisscom presented the first driverless car to take to Swiss roads. The car is a VW Passat, which Autonomos Labs has fitted with sensors, computers and software. The computer drives, steers and brakes the vehicle autonomously, and detects other vehicles and pedestrians by means of laser scanners, radar and video cameras. EPA/ENNIO LEANZA©EPA

The guidelines include requirements that driverless cars transmit and receive basic safety messages

This week saw a major step forward for self-driving cars in the US, the world’s second-largest car market, as the federal government unveiled its first set of guidelines for autonomous vehicles, writes Leslie Hook.

The new rules pave the way for the development of self-driving cars that conform to national-level rules, rather than patchwork regulations at the state level. The guidelines, which fall short of being formal laws, are designed to be changed and updated as autonomous technology evolves, and officials said they would update the policy once a year.

Carmakers and transportation companies had been concerned that individual US states might enact restrictive laws around self-driving cars, such as a proposal earlier this year in California that included a requirement for a human driver to be ready to take control of an autonomous vehicle at all times.

The Big Read

Driverless cars: when robots rule the road

Google, Ford and others face regulatory hurdles as they push to take humans out of the driver’s seat

Carmakers welcomed the new rules. The Self-Driving Coalition for Safe Streets, which counts Uber, Google, Volvo, Lyft and Ford as members, said the guidelines were “an important step forward in establishing the basis of a national framework for the deployment of self-driving vehicles”.

The commercial use of self-driving cars has also taken big steps forward recently, with test-phase launches of taxi fleets using autonomous vehicles in Singapore and the US city of Pittsburgh.

Uber started taking passengers on test rides in its self-driving cars in Pittsburgh last week. Uber has a $300m partnership with Volvo to jointly develop driverless technology and has said it will introduce new self-driving Volvos later this year.

● Related comment by Anjana Ahuja: Driverless cars and MIT’s test of the crowdsourcing morality

Ruling against EU Airbus subsidies bolsters Boeing

It has been an eventful week for Airbus Group after the World Trade Organisation supported claims from rival Boeing that it continued to receive billions of dollars of illegal EU subsidies, writes Peggy Hollinger.

epa05464047 (FILE) A file photograph showing an Airbus A-380 during a flight demonstration at the Farnborough International Airshow, in Farnborough, Britain, 11 July 2016. Reports on 08 August 2016 state that Britain's Serious Fraud Office (SFO) has launched an investigation into allegations of 'fraud, bribery and corruption' in the civil aviation business of Airbus. Germany and France joined Britain in halting export credits. EPA/HANNAH MCKAY©EPA

The ruling marks the latest chapter in a 12-year battle that shows no sign of ending soon. The WTO will rule next year on whether Boeing continues to receive illegal aid from the US and is widely expected to find that it does.

Meanwhile, the Financial Times reported this week that Airbus is preparing to announce a wide-ranging restructuring next month as it seeks to complete the
integration of its aircraft subsidiary and to cut costs.

Airbus and Boeing put pressure on supply chain

Airbus SAS A320 & A330 Aircraft Wing Production...A banner advertises an Airbus A320 neo in the A320 wing assembly section of the company's factory in Broughton, U.K., on Monday, Feb. 4, 2013. Airbus SAS won a $9 billion order from Steven Udvar-Hazy's Air Lease Corp. that includes 25 A350 wide-body jets, a competitor to Boeing Co.'s grounded 787 Dreamliner. Photographer: Paul Thomas/Bloomberg

Suppliers rush to land parts for a record number of aircraft

Fabrice Brégier, the head of the company’s commercial aircraft division, is expected to be promoted to chief operating officer and will take on a new group-wide responsibility as part of the wide-ranging plan.

With the appointment, Tom Enders, the group’s chief executive, is attempting to lay to rest management tensions sparked by closer integration of the Franco-German aerospace group and break down the fiefdoms that still exist — and that add cost — within the group formally known as EADS.

The restructuring will tighten Mr Enders’ grip on the civil aerospace division which accounts for 70 per cent of the European company’s revenues. He aims to eliminate duplication of certain functions between the aircraft subsidiary and its parent, as well as with other business units.

The plan has not yet been finalised but could include job cuts across the group.

● Related Inside Business column: Airbus on course to gain from its pain
● News story: Airbus and Boeing win US licence for Iran sales

Santander pulls out of talks to acquire Williams & Glyn

Santander has withdrawn from talks with Royal Bank of Scotland to acquire Williams & Glyn in a blow to the state-backed lender’s attempts to sell off the challenger bank, writes Emma Dunkley.

The Spanish bank submitted a formal offer to buy the 300 Williams & Glyn branches from RBS last month, bankers told the FT.

But Santander has now pulled out of the acquisition negotiations, according to two people briefed on the process. One person said this was because of price disagreements, noting that Williams & Glyn was originally valued at about £1.9bn.

The latest development is a major setback for RBS, which is 73 per cent owned by the government, after it has spent seven years and £1.6bn attempting to separate Williams & Glyn.

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RBS must divest Williams & Glyn by the end of 2017 as a condition of European Commission rules for receiving a £45bn bailout during the financial crisis. Ross McEwan, chief executive of RBS, has said in the past that offloading Williams & Glyn is a precondition for returning excess capital and dividends to investors.

RBS is understood to be in discussions with the Treasury about other ways it could meet the EC’s criteria. One senior banker suggested that instead of a sale, a number of banks could acquire different customer groups of Williams & Glyn.

The bank abandoned plans to create Williams & Glyn as a separate bank with its own IT system and licence last month, pointing to the lower for longer interest rate environment and the impact this would have on creating a profitable bank in the future. Santander, the Treasury and RBS declined to comment.

Senator calls for criminal probe of Wells Fargo chief

©Bloomberg

Wells Fargo’s hard-won reputation as a customer-friendly lender was further compromised this week as lawmakers piled pressure on the US bank over its bogus accounts scandal, writes Alistair Gray.

John Stumpf, chairman and chief executive, was put through the wringer in a blistering hearing on Capitol Hill.

Video

Wells Fargo scandal explained

Wells Fargo & Co signage is displayed on the Wells Fargo Center skyscraper in downtown Los Angeles, California, U.S., on Tuesday, July 7, 2015. Wells Fargo & Co. is scheduled to report quarterly earnings on July 14. Photographer: Patrick T. Fallon/Bloomberg

Alistair Gray explores the fallout from Wells Fargo scandal as investors, regulators and politicians turn up the heat

Elizabeth Warren, the Democratic senator, said he should be “criminally investigated” after regulators found that thousands of Wells employees secretly created as many as 2m accounts and credit cards. In some cases staff invented email addresses and forged signatures, and the bank charged fees on accounts customers did not know existed.

The focus shifted this week from how Wells treated consumers — the bank has already paid a $185m fine — to how it dealt with staff. Lawmakers contended workers resorted to fraud because they were under intense pressure to hit sales targets. Later in the week, senators wrote to President Obama’s Labor secretary Thomas Perez, calling on his department to investigate whether the bank breached employment standards.

The episode is raising more questions about the future of Mr Stumpf, who resigned with immediate effect on Thursday from an advisory position at the Federal Reserve following political pressure. Wells said it was his “personal decision” to go, adding “we pride ourselves on creating a positive environment for our team members”.

There is no end in sight for the bank, which has lost about $22bn of its market capitalisation since the scandal erupted. Mr Stumpf has been summoned to testify at another Congressional hearing next week.

● Related On Wall Street column: No escaping fallout from Wells scandal
● Inside Business column: Crimes, misdemeanours and cross-selling