M&A FEES UP FOR THE FIRST TIME IN 12 MONTHS
The global banking industry will be able to breathe a sigh of relief today after new data showed that investment banking fees rose in the second quarter of this year for the first time in 12 months. According to preliminary data from Thomson Reuters, investment banks have raked in $16bn (£9.8bn) so far this quarter, as cash flooded back into the system giving a boost to the lucrative mergers & acquisitions (M&A) they advise on. The figure, which is based on early readings, could rise still if more deals complete between now and the end of the quarter next Tuesday.
BA STAFF AGREE TO WORK FOR FREE
Eight hundred British Airways (BA) staff will work for nothing next month, after the struggling airline convinced 7,000 employees, or 17 per cent of its workforce, to take a pay cut. Chief executive Willie Walsh, who earns £735,000 a year, said the staff would save the airline around £10m. Walsh has already agreed to work for free in July, saving the company £60,000. “This response clearly shows the significant difference individuals can make,” he said, adding that staff will be able to volunteer for the programme later in the year too.
EUROTUNNEL LOOKS AT HIGH SPEED RAIL BID
Group Eurotunnel, the firm that runs the Channel tunnel is “looking carefully” at bidding for the UK’s only dedicated high-speed rail line. Executive chairman Jacques Gounon said he was interested in bidding for the High Speed 1 line, which carries trains at 300kph on the 108km between the tunnel and London’s St Pancras station. High Speed 1, which cost £5.8bn to build, could fetch up to £2.5bn, say observers.
TOYOTA WANTS MORE NIMBLE FIRM
Akio Toyoda, the new chief executive of Toyota Motor, yesterday pledged to bring a looser, more nimble management style to the carmaker, which is facing its biggest crisis since Sakichi Toyoda – his grandfather and Toyota’s founder – ran the company six decades ago. Mr Toyoda promised “to do everything possible” to return the group to profit in 2010-2011, although “difficult conditions” would persist for the next two years. Toyota made a net loss of 437bn yen ($4.6bn) last year and has forecast a bigger deficit this year.
WILLIAM HILL MAY MOVE OFFSHORE
The odds on William Hill moving its online and telephone betting business offshore have shortened. Ralph Topping, chief executive, said yesterday that competition from rivals enjoying benevolent tax regimes meant the UK bookmaker did not have “the luxury of being parochial about our future”. Topping was responding to fears in the racing industry, voiced on Thursday in public for the first time, that William Hill will lead an exodus of UK bookmakers offshore.
SHINSEI CONFIRMS MERGER TALKS WITH AOZORA BANK
Japan’s Shinsei and Aozora Bank are discussing a merger that would create the country’s sixth-biggeset banking group, with assets of about 18,000bn yen ($187bn). The talks to link the banks, which were nationalised during Japan’s late-1990s banking crisis and which both have powerful private equity shareholders, underscore the difficulty that both companies have had in Japan’s crowded banking industry. Shinsei, 32.5 per cent owned by JC Flowers, the private equity firm controlled by Christopher Flowers, confirmed it was in talks with Aozora.
RBS RISES ON BROKER UPGRADE
Royal Bank of Scotland got a boost yesterday after Cazenove upgraded the majority taxpayer owned bank to “outperform”. The broker said that the bank’s new management team was on the right path to a smaller group, reducing the size and risk of its balance sheet. It added that it expects the share price to react positively to news on restructuring, the asset protection scheme and disposals of non-core businesses.
JAPAN ON VERGE OF SUB-PRIME MORTGAGE CRISIS
Anaemic exports, a struggling domestic economy and a dramatic plunge in summer bonuses could cause Japan’s version of the sub-prime mortgage crisis to explode, a leading think-tank has warned. A housing loan default problem is looming and likely to begin in the next few weeks.
GOVERNMENT TACTICS SPARK FURY OVER BACKDATED PORT RATES
Britain’s port operators expressed outrage last night after the Government used a 17th-century parliamentary procedure to attempt to stifle opposition to its plans to backdate business rates. Lord Bates, a shadow local government minister, was due to table an amendment in the House of Lords on Monday seeking to end a furious row over retrospective rates.
NEWSPAPER DISTRIBUTOR DAWSON HOLDINGS IN DEBT TALKS
Dawson Holdings, the struggling newspaper distributor, has entered into a “standstill agreement” with its creditors as talks to dispose of its troubled distribution business continue. Dawson said that there had “been dialogue with interested parties” about selling the division which has lost £500m worth of contracts this year.
BOSTON SCIENTIFIC APPOINTS CEO
Boston Scientific said President and Chief Executive Jim Tobin will retire next month after a decade on the job and be succeeded by Ray Elliott, the former president and CEO of orthopedic-devices maker Zimmer Holdings. Elliott, said yesterday that he wants to diversify Boston Scientific’s offerings and that he sees a “target-rich environment” for deals outside the medical-device maker if needed.
MICROSOFT PLANS LURE FOR WINDOWS 7
Microsoft announced a plan to encourage personal-computer users to move to a much anticipated new version of its operating system, Windows 7. As part of the plan, the company said the main consumer version of the software would cost $10 less than past versions of Windows.
BARCLAYS’ LEHMAN DEAL PROBED
A US bankruptcy judge has ruled that Lehman Brothers Holdings has the right to investigate the details of the sale of its broker-dealer unit to Barclays, to determine whether the UK bank got “too good of a deal”. Barclays snapped up the brokerage last year after Lehman filed for bankruptcy, but the company’s lawyers now want to establish whether Barclays paid less than it claimed. One of the key issues will be whether Barclays paid former Lehman staff the $2bn ($1.2bn) in bonuses it promised them, with Lehman lawyers arguing that former employees were paid just $700m.
MISYS REPORTS ROBUST REVENUE
Software company Misys said yesterday that total revenue for the year to 31 May rose about 40 per cent to £695m, helped by the creation of its Allscripts-Misys healthcare business in October last year. The company, which also provides solutions for the financial sector, said that total order intake increased by 60 per cent to about £430m.
STRONG ORDER BOOK AT COSTAIN
Construction firm Costain said yesterday its forward order book rose to a record high in the first half of the year, thanks to significant new contract wins. The firm’s forward order book currently stands at £2.4bn, 20 per cent above this time last year. Costain won a number of new contracts over the period, including a £397m contract for the Greater Manchester waste disposal authority and a £400m 10-year contract with Severn Trent.
GOLDSHIELD REPORTS PROFIT SPIKE
Generic drugs supplier Goldshield Group posted a 72 per cent leap in profits yesterday after announcing on Wednesday it had received a bid approach from an unnamed party. Pre-tax profit for the year rose to £21.3m, while sales were up 16 per cent to £98.4m. Goldshield said it had seen an encouraging start to the current financial year but warned the economic environment is likely to be more challenging in the short term.
NATIONWIDE IS MOST TRUSTED
Nationwide, the UK’s largest building society, is also its most trusted financial brand, according to Moneywise magazine. The publication’s inaugural Customer Service Awards also saw Swiftcover take the gong for most trusted motor insurer, while Liverpool Victoria was deemed the most reliable home insurer and Legal & General scooped the award for income protection providers.
DELOITTE FORMS ANTI-SPYING TEAM
Deloitte yesterday said it has formed a new corporate counter-espionage team to coincide with the government’s launch of a new cyber-security plan. The accountancy firm’s new team, in the security, privacy and resilience group, will be headed up by Steve Cummings, an ex-senior government security official who was previously director of the Centre for the Protection of the National Infrastructure (CPNI).
H&M BUCKS RETAIL SECTOR GLOOM
Swedish budget clothing group Hennes & Mauritz (H&M) yesterday bucked retail sector woes as it reported a rise in profits for the second quarter of the year, beating analyst forecasts. H&M, the world’s third-biggest clothing retailer, posted a 6.4 per cent increase in pre-tax profit to 5.78bn Swedish crowns (£445m) for the three months to end of May. Sales for the period rose 23 per cent to 26.6bn crowns. It added that the recent decline in the value of the dollar had eased downward pressure on margins.
