Santander rescues rival Banco Popular in EU New Test Case

Santander Bank
Mike Mozart/Flickr

(qlmbusinessnews.com via uk.reuters.com — Wed, 7 June 2017) London, UK —

Spain's biggest bank Santander (SAN.MC) is to buy struggling rival Banco Popular (POP.MC) for a nominal one euro after European authorities determined the lender was on the verge of insolvency.

Santander will ask investors for around 7 billion euros ($7.9 billion) of fresh capital to cover the cost of bolstering Popular, which has been weighed down by billions of euros of risky property loans.

The rescue, which followed a declaration by the European Central Bank that Banco Popular was set to be wound down, marks the first use of an EU regime to deal with failing banks adopted after the financial crisis.

It breaks the mould of using taxpayers' money, instead imposing steep losses on shareholders and some creditors of the bank, a step two debt investors described as unexpected.

The owners of so-called AT1 and AT2 bonds suffered roughly 2 billion euros of losses, while shareholders lost everything. Senior bondholders were spared.

Popular, Spain's sixth biggest bank, has long struggled and repeatedly asked shareholders for fresh money. But a recent acceleration in the withdrawal of deposits compounded its funding problems, triggering its sale.

The ECB had blamed what it called a “significant deterioration of the liquidity situation of the bank in recent days” in concluding that it “would have, in the near future, been unable to pay its debts or other liabilities.”

Elke König, Chair of the Single Resolution Board, an EU agency that winds down stricken banks, said that intervention had been needed overnight.

The Spanish reaction to the problem lender was prompt when compared to Italy, which has been grappling for years with the problems of its lenders.

In contrast to the banking crisis that unfolded in 2008, the move in Spain was also accepted with calm on stock markets and European bank shares moved upwards.

“This shouldn't pose any real problems for other banks,” said Aberdeen Asset Management Head of Credit Research Laurent Frings. “But it does show that there is real risk in investing in these second-tier names.”

BOTIN SEES BENEFITS

Spanish Economy Minister Luis de Guindos said that Santander's takeover was a good outcome for Popular given its situation in recent weeks and it would have no impact on public resources or on other banks.

Santander Chairwoman Ana Botin presented the business case for the hastily-organized deal, arguing that the combination of the two would strengthen the group's geographic reach as the economy in Spain and Portugal improved.

“We welcome Banco Popular customers,” she said.

Santander, which was unaffected by the banking crisis in Spain that forced Madrid to seek international aid, said buying Popular would accelerate growth and profit from 2019.

It said it would set aside 7.9 billion euros to cover the cost of so-called non-performing assets – a reference to loans at risk of non-payment.

Struggling under the weight of 37 billion euros of non-performing property assets left over from Spain's financial crisis, Popular had seen its share price slump by more than a half in recent days.

Popular was among a handful of banks that emerged as vulnerable to stress, such as an economic downturn, in a simulation carried out by the European Banking Authority last summer.

Popular remained vulnerable. Its ratio of risky loans is around three times above the average of its Spanish rivals.

But Popular's small and medium-sized company loan portfolio, the largest among Spanish lenders, presents an opportunity for Santander, which said it would now lead this growing market.

By By Jesús Aguado and Francesco Guarascio

(Additional reporting by Andres Gonzalez, Jose Elias Rodriguez and Angus Berwick in Madrid, Francesco Canepa in Frankfurt and Jan Strupczewski, Francesco Guarascio in Brussels and Helene Durand in London; writing by John O'Donnell; Editing by Keith Weir)

Vodafone blocks ads on fake news and hate speech websites

 

shibainu/flickr

(qlmbusinessnews.com via ibtimes.co.uk – – Tue, 6 June, 2017) London, Uk – –

Telecoms giant Vodafone has announced new rules to block its advertising appearing on websites featuring hate speech or ‘fake news'.

It said it had updated its content controls to ensure its global ads do not appear alongside “offensive content”. The group added these controls will be monitored by Google, Facebook and its ad agency WPP.

The moves comes amid the intense debate about advertising from large companies appearing alongside objectionable online material.

The group said the measure will mean its ads will not appear alongside material that is “deliberately intended to degrade women or vulnerable minorities”.

It added that its messages will also not appear beside content “presented as fact-based news (as opposed to satire or opinion) that has no credible primary source (or relies on fraudulent attribution to a primary source) with what a reasonable person would conclude is the deliberate intention to mislead.”

The telecoms group, which has operations in 26 countries and has almost 516 million customers, said the changes will come into effect immediate effect.

Vodafone chief executive Vittorio Colao said: “Hate speech and fake news threaten to undermine the principles of respect and trust that bind communities together.

“Vodafone has a strong commitment to diversity and inclusion; we also greatly value the integrity of the democratic processes and institutions that are often the targets of purveyors of fake news. We will not tolerate our brand being associated with this kind of abusive and damaging content.”

By Roger Baird

RBS shareholders agree settlement

 

morebyless/flickr.com

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 6 June, 2017) London, Uk – –

Royal Bank of Scotland has finally reached a £200m settlement with thousands angry shareholders over its disastrous 2008 cash call, dashing hopes that its former chief executive Fred Goodwin would be forced to appear in the High Court.

It is understood that the action group representing the claimants in the civil case have agreed to an 82p-per-share offer that RBS made last month in a last-ditch attempt to avoid the 14-week trial.

The eleventh-hour offer from the bank was double the 41.2p-a-share at which most of the disgruntled investors settled in December last year, when the lender set aside £800m to resolve the matter.

The trial was due to start on May 22 but the judge, Mr Justice Hildyard, adjourned it three times to give RBS and the remaining claimants – 9,000 retail shareholders and about 20 institutional investors – the chance to agree to the more generous settlement offer the bank had made.

While most of the investors, including the main financial backer of the action, indicated they would accept the new offer, a smaller group of “diehards” initially rejected the deal.

The splintering of the remaining claimants between those wanting to fight on and those choosing to settle had led to conflicting messages and speculation that the trial might still proceed.

The situation was complicated by the involvement of Scottish businessman Neil Mitchell, an RBS shareholder in the midst of a separate legal action against the bank and who last night claimed the “diehards” had raised £7m to continue the legal action.

However, the leaders of an action group that is responsible for marshalling the claimants, as well as its lawyers, have now indicated to the judge that it is accepting the 82p deal. This means the trial, which would have started tomorrow, is now expected to be vacated.

A trial over the £12bn rights issue would have been expensive and highly embarrassing for the taxpayer-owned lender as Mr Goodwin and other former directors were defendants in the case. Mr Goodwin was stripped of his knighthood in the wake of RBS’s near-collapse during the financial crisis.

RBS, which remains 71pc-owned by the state, has already spent more than £100m preparing for the battle. Its legal bill would have risen by an estimated £29m if it had gone to trial.

The shareholders had claimed the bank misled them about its financial health in the prospectus for the rights issue. Just months later, RBS received a £45.5bn taxpayer bailout that inflicted huge losses on shareholders.

RBS denied the investors' claims.

By Ben Martin,

HSBC Offering employees cash bonuses up to £2,500 to relocate to New HQ

Chris Beckett/Flickr

(qlmbusinessnews.com via theguardian.com – – Mon, 5  June, 2017) London, Uk – –

Canary Wharf staff offered up to £2,500 for each employee persuaded to relocate from London as CEO admits to ‘tricky’ task

HSBC is offering its employees cash bonuses of up to £2,500 if they can convince a colleague to move from London to the bank’s new British headquarters in Birmingham.

The bank has created a special bonus scheme to encourage staff to “help us find the right people for Birmingham” because it is struggling to entice enough of its staff to make the 120-mile move before its new office opens in January.

Staff who manage to convince a friend to make the move to Birmingham will be rewarded with a cash bonus of between £750 and £2,500 depending on the seniority of the new Midlands recruit.

Britain’s biggest bank has only convinced just over half of its target of 1,040 people to make the move more than two years after announcing it would switch its UK banking operations from Canary Wharf to Birmingham.

The new cash bonus comes on top of the bank already attempting to sweeten the change by making its standard relocation package “more attractive” with “support for housing and children’s schooling”.

António Simões, HSBC’s chief executive, told reporters last week, during a visit to the bank’s new 10-storey 210,000-sq-ft office building in Centenary Square: “We have had some challenges but today we are ahead of where we thought we would be, with around 53% of the roles filled.”

Simões, who took over as HSBC’s chief executive in 2015, said it had proven “trickier” than expected to convince some specialists, particularly in areas like marketing and communications, to make the move, which he described as “quite a big task still”.

“We’ve made the standard package more attractive by offering for example support for housing and children’s schooling,” Simões said. He did not mention the cash bonuses, which were later found to be offered on HSBC internal staff website.

A HSBC spokesman said that despite the difficulties in convincing staff to move, the bank was convinced that its new £200m office would open on schedule.

The reluctance of the bank’s staff to move to the Midlands comes despite much lower house prices and a cheaper cost of living in Birmingham compared with London.

According to the property prices index provided by Hometrack the average home in Birmingham costs £152,000, less than a third of the average price in London. But house prices in Birmingham are rising much faster than in the capital, with prices up 7.7% in the year to April compared to 3.5% in London.

The new Birmingham office will contain HSBC’s UK retail and commercial bank, which is being split from the riskier parts of the group under the government’s ringfencing rules, which come into force at the start of 2019.

The continuing difficulty in recruiting staff for the Birmingham office may concern the bank’s official monitor, who was last year reported to have described the move as “a programme in crisis”. Michael Cherkasky, a lawyer who was installed as the bank’s official monitor following HSBC’s £1.2bn fine for money laundering offences from the US in 2012, was said to have expressed concerns to executives about the lack of staff willing to make the move. He said a delay could lead to the bank’s UK division lacking the ability to maintain proper money-laundering controls.

HSBC, which has 16 million customers in the UK, selected Birmingham for its British headquarters partly because of its purchase of Midland Bank in 1992. About 48,000 of HSBC’s 257,000 staff work in Britain.

Many British banks and other businesses are trying to relocate parts of their operations out of London because of the rising cost of office space in the capital. Of the 2.2 million people employed in financial services jobs in the UK, two-thirds now work outside London, according to data from the industry lobby group TheCityUK.

Financial jobs in Birmingham rose by 6.9% between 2013 and 2015, the group said. Other large financial employers in the city include Deutsche Bank, which has increased its Birmingham staff from 35 in 2007 to about 1,500 today.

By Rupert Neate

Britain’s accounting watchdog closes probe of PwC over Tesco audits

 

(qlmbusinessnews.com via uk.reuters.com — Mon, 5 June, 2017) London, UK —

Britain's accounting watchdog said on Monday it had closed its investigation into auditor PricewaterhouseCoopers LLP (PwC) which was launched after British retailer Tesco revealed it had overstated its 2014 mid-year earnings.

The Financial Reporting Council said its executive counsel had concluded there was no realistic prospect of a tribunal making an adverse finding against PwC.

The FRC launched an inquiry in late 2014 into the preparation, approval and audit of Tesco's accounts over the previous four years, including the role of external auditor PwC.

Tesco in 2014 announced it had overstated its first-half profits by 250 million pounds due to incorrectly booking payments from suppliers – a figure it later raised to 263 million pounds.

The FRC said the investigation into other chartered accountants who were auditors of Tesco was ongoing.

By Arathy S Nair

UK house prices fell for the third consecutive month in May

Mark Moz/Flickr

(qlmbusinessnews.com via bbc.co.uk – – Wed, 26 Apr, 2017) London, Uk – –

UK house prices fell for the third consecutive month in May, according to the Nationwide.
It was the first time that prices had fallen for three months in a row since 2009, the building society said.
Prices dropped 0.2% in May, while the annual rate of price growth slowed to 2.1% – the slowest pace for almost four years.
Nationwide said it was further evidence that the housing market was “losing momentum”.
However, it said it was too early to say whether it was more than a “blip”.
The building society said the slowdown could be linked to the recent squeeze on household budgets caused by the weakness of the pound.
Prices have been rising as the cost of imported goods goes up. At the same time, inflation has overtaken wage growth.
It also said “affordability pressures” in certain parts of the country could be to blame.
However, Mr Gardener said: “The number of people in work has continued to rise at a healthy pace. Indeed, the unemployment rate fell to a 42-year low in the three months to March.”

He said the pressures on the market were likely to continue, exerting a drag on house price growth in the quarters ahead.
But a shortage in the supply of housing was likely to support prices, he added.
“As a result, we continue to believe that a small increase in house prices of around 2% is likely over the course of 2017 as a whole.”
Property prices rose by 4.5% in 2016, according to the building society.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, also said he expected 2% growth this year, with house prices returning to a “slowly rising path”.
“Surveys suggest supply is tightening rapidly, employment growth looks set to remain steady at about 1% year-over-year, and mortgage rates still have scope to fall a little further,” he said.
“But the days of surging house prices driven by sharply rising loan-to-income ratios are gone.”

Britains top the charts with online grocery shopping

Howard County Library/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 2 May, 2017) London, Uk – –

British shoppers buy more food online than consumers anywhere else in the world – claiming their title for the second year in a row.

Kantar Worldpanel, which tracks spending data across the grocery industry globally, said the online spend per virtual supermarket shopping trip was $83.4 (£64.9) in 2016.

This was marginally down on 2015’s figure of $85.2 – which was also the world's highest – but still puts the UK well ahead of its international rivals when it comes to spending online.

The UK also topped the list in terms of frequency of online shopping with Brits buying more often than anywhere else – an average of 15.4 times a year compared to 14.1 in 2015.

Kantar said the average e-commerce shopping trip in the UK was worth $64.90 more than the average trip to a physical store.

“The higher online spend is a combination of shoppers choosing online primarily for large stock-up trips and retailers requiring a minimum spend,” Kantar said.

Following the UK in online basket size was France ($68.60), Portugal ($53.50), Spain ($43.80) and Taiwan ($33.70).

In spite of the growing popularity of internet shopping more broadly, online grocery purchases remain a small fraction of the total amount Brits spend in supermarkets.

Fraser McKevitt, head of retail and consumer insight, Kantar Worldpanel UK, said: “Less than one-third of UK households currently buy their groceries online, suggesting there is still significant headroom for e-commerce to grow from 2016’s 7.3pc market share,” he said.

“The biggest increases in uptake are seen from slightly older shoppers; a combination of families retaining the habit even as their children grow up, and more mature households now feeling confident to take the digital shopping plunge.”

Mr McKevitt said the biggest barrier to growth was “resolving the tension between what connected consumers want and how retailers can deliver this profitably”.

The data showed that South Korea leads the way in terms of the popularity of online grocery shopping with almost 70pc of the population buying on the web more than once per month.

China (54.6pc), Taiwan (49.3pc), the UK (27.5pc), France (26.2pc) followed.

By Bradley Gerrard

Bank of England Staff union launches ballot Over Strike Action

James Stringer/Flickr

(qlmbusinessnews.com via uk.reuters.com — Thur, 1 June, 2017) London, UK —

Staff at the Bank of England will begin voting on Thursday on whether to hold a strike this year in protest at below-inflation pay rises, union sources told Reuters.

Unite, Britain's biggest union is consulting members on whether to take industrial action at the 323-year-old Bank, which employs around 3,600 people, after they were awarded a 1 percent pay rise for this year.

The union, which represents workers in security, catering, legal, HR and other services at the Bank of England, said the pay offer was “derisory” and the second year in a row that employees have faced a pay offer that is lower than inflation, resulting in a fall in income in real terms.

Industrial disputes at the BoE are rare. In 1994, IT staff at the Bank were balloted for strike action after a pay dispute but voted against it.

“The Bank's disgraceful snub of low paid staff stinks of arrogance and represents an organisation thoroughly out of touch with the reality of the pressure staff face meeting their costs of living,” said Mercedes Sanchez, a Unite regional officer.

The Bank of England declined to comment.

Industrial action would be potentially embarrassing for the central bank, whose policymakers have focused heavily on the prospects for wage growth. The BoE's latest economic forecasts show wage growth is likely to pick up significantly over the next couple of years, but it has previously been overly optimistic about the pace of pay increases.

Pay rises for public sector workers in Britain have been capped by the government at 1 percent. Although this does not apply to the independent Bank of England, it operates in an environment of pay restraint for public officials.

Workers in Britain suffered a long hit to their spending power after the global financial crisis, which eased only briefly when falling oil prices took inflation to zero in 2015.

Real earnings are below their levels of 10 years ago and inflation looks set to hit 3 percent this year, pushed up by the pound's fall since the Brexit vote and the oil price rebound.

Britain faces the prospect of a wave of strikes in different industries this summer, with nurses and teachers threatening to stop work over issues ranging from pay deals to pensions.

Unite said some Bank staff earn less than 20,000 pounds a year imposing a 1 percent pay rise will potentially leave them and their families facing financial hardship.

BoE Governor Mark Carney has received an annual salary of 480,000 pounds since joining the Bank in 2013, as well as an annual accommodation allowance of 250,000 pounds. He has declined pay increases since joining.

The ballot will close on June 21 and if members vote in favour of strike action this could begin in the summer or autumn, the sources said.

By Andrew MacAskill and Andy Bruce

Google officially submits plans for new 1million sq ft London headquarters

(qlmbusinessnews.com via theguardian.com – – Thur, 1 June 2017) London, Uk – –

Construction on building that is longer than the Shard is tall set to begin in King’s Cross in 2018

Google has officially submitted plans for its new 1million sq ft (92,000m2) “landscraper” London headquarters, with the intention of beginning construction on the building in 2018.

Designed by Bjarke Ingels Group and Heatherwick Studios, the team behind TfL’s New Bus for London and the 2012 Olympic Cauldron, the building will stand 11 storeys tall and stretch parallel to the platforms of London’s King’s Cross railway station.

Combined with Google’s current King’s Cross office around the corner, and a third building that the company also plans on moving into in the area, it will form a new campus that will house 7,000 Google employees. Dubbed a “landscraper”, the finished building will be longer than the Shard is tall.

The Heatherwick-designed building was submitted to Camden council and will be the first to be wholly owned by, and designed specifically for, Google outside the US. Google declined to comment on the cost of the project.

Heatherwick said in a statement: “The area is a fascinating collision of diverse building types and spaces and I can’t help but love this mix of massive railway stations, roads, canals and other infrastructure all layered up into the most connected point in London.”

He added: “Influenced by these surroundings, we have treated this new building for Google like a piece of infrastructure too, made from a family of interchangeable elements which ensure that the building and its workspace will stay flexible for years to come.”

Google’s Joe Borrett, the company’s head of real estate and construction, said: “We are excited to be able to bring our London Googlers together in one campus, with a new purpose-built building that we’ve developed from the ground up. Our offices and facilities play a key part in shaping the Google culture, which is one of the reasons we are known for being among the best places to work in the industry.”

The company’s decision to stick with its plans for the HQ was widely seen as a vote of confidence in the British economy following the decision to leave the EU in June 2016. In a speech in Google’s London office last November, chief executive Sundar Pichai said: “Here in the UK, it’s clear to me that computer science has a great future with the talent, educational institutions, and passion for innovation we see all around us. We are committed to the UK and excited to continue our investment in our new King’s Cross campus.”

Originally, the company’s plans had called for a luxury office, complete with a rooftop running track, indoor swimming pool and climbing wall – and saddled with an estimated £1bn price tag. But Google rejected those plans, put together by London-based architects AHMM, in 2015 for being “too boring”, and brought Heatherwick on board instead.

By Alex Hern

Pound Sterling slips as Conservatives lead shrink

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(qlmbusinessnews.com via independent.co.uk – – Wed, 31 May, 2017) London, Uk – –

The pound already fell around 2 per cent last week as polls showed the Conservatives’ lead over the Labour Party had shrunk from as much as 20 points in April

The pound fell against the dollar and the euro on Wednesday after a new poll suggested that Britain could be on course for a hung parliament in next week’s election.

Sterling was recently hovering around $1.28 against the dollar, near a one-month low. Bloomberg data showed that the pound was the worst performing of all major currencies on Wednesday.

The latest seat-by-seat prediction by YouGov for The Times suggests that the Conservatives are on course to win 310 seats at the election – short of an absolute majority of 326 seats needed to form a Government.

“While all the polls still project that the Conservatives will be ahead on 8 June, the sharp recent reduction in the party’s lead, poor poll reliability in past votes, plus an unusually high level of uncertainty about the key issues and how different groups could vote, make this election tricky to call, says Kallum Pickering, an economist at Berenberg. “To put it one way, we would not be very surprised if there was surprise.”

Geoffrey Yu, head of the investment office at UBS Wealth Management said that if the latest poll proves accurate, he would expect markets to be shaken.

“Yet today’s poll distracts from the many others showing that a Conservative majority remains the most likely outcome, as is our base case,” he adds. “With no further indications of a hung parliament, the recent fall in sterling may be seen as a buying opportunity for investors.”

The pound already fell around 2 per cent last week as polls showed the Conservatives’ lead over the Labour Party had shrunk from as much as 20 points in April.

The currency remains about 13 per cent lower against the dollar since last June’s Brexit referendum, but had until recently been edging tentatively higher this year.

It rallied sharply after Theresa May’s 18 April announcement of a general election, with investors hopeful that a vote would strengthen the Prime Minister’s hand in Brexit negotiations.

See how much you could save on international money transfers with HiFX: sign up and make a transfer

An ICM poll for the Guardian on Tuesday also showed Labour gaining ground but suggested the Tories are still enjoying a healthy advantage.

It placed Ms May on 45 per cent, Labour on 33 per cent, the Lib Dems on 8 per cent and Ukip on 5 per cent.

By Josie Cox

Irish government to sell 25% Allied Irish Banks Plc

(qlmbusinessnews.com via bloomberg.com — Wed, 31 May, 2017) London, Uk —

Ireland’s drive to recoup money from the bank rescue that almost bankrupted the nation is finally gaining pace.

The Irish government on Tuesday started the process of selling 25 percent of Allied Irish Banks Plc, after spending 21 billion euros ($23.5 billion) bailing out the lender following the 2008 financial crisis. In comments aired on Wednesday, Finance Minister Michael Noonan suggested the state may even eventually make a profit on its investment in the bank, even though it may take a decade to fully privatize the lender.

In all, taxpayers injected 64 billion euros into the nation’s financial system, in what the International Monetary Fund called the costliest banking rescue since the Great Depression. The burden of saving the banks eventually forced the nation into an international bailout, and seven years later, the state is still out of pocket. The government’s remaining stakes, added to the money generated by owning them, amount to about 28 billion euros.

So far, AIB has repaid about 6.8 billion euros through channels such as fees and dividends. The share offering in London and Dublin next month will raise about 3 billion euros, with terms to be set in mid-June.

Analysts at banks working on the IPO value the company at about 10 billion euros to 13 billion euros, people familiar with the matter said. The final value will depend on investor feedback, they said.

“If you look at the history, four years ago people were worried about putting in more capital — that was the fear,” AIB Chief Executive Officer Bernard Byrne, who took over in 2015, told reporters Wednesday. “We’ve gone into the ballpark at this stage, so that’s a good place to be.”

Still, calculating the real cost of bailing out the banks means looking beyond the 64 billion euro figure. Ireland introduced a snap guarantee in September 2008 of almost all its banks’ liabilities, totaling about 440 billion euros, weeks after the collapse of Lehman Brothers Holdings Inc. sparked a global financial crisis. That drove up the state’s cost of borrowing money on international markets, adding to the taxpayer’s bill.

And while the government has vowed to recover the expense of saving what it describes as the “living banks” — AIB, Bank of Ireland Plc and Permanent TSB Group Holdings Plc — it won’t ever recover the estimated 30 billion euros injected into Anglo Irish Bank Plc. The lender is being liquidated.

In fact, one likely use of the proceeds from the AIB sale next month, according to Cantor Fitzgerald: paying down the legacy debt associated with Anglo Irish.

by Dara Doyle and Peter Flanagan

London Stock Exchange buys US analytics business for £535m

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(qlmbusinessnews.com via uk.reuters.com — Tue, 30 May 2017) London, UK —

London Stock Exchange (LSE) has agreed to buy The Yield Book, Citigroup's fixed-income analytics service and also its related indexing business, for $685 million (534.6 million pounds) in cash, the companies said on Tuesday.

LSE, which had said it would be looking out for investments after the collapse of its proposed merger with Deutsche Boerse, said the deal would boost the data and analytics capabilities of its information and FTSE Russell indexes business and take assets under management using its indexes to about $15 trillion.

The deal, which is subject to regulatory clearances and is expected to close in the second half of this year, is expected to add $30 million in synergy benefits to LSE's revenues over the first three years after completion and bring $18 million in cost savings over the same period, the company said.

Last year it estimated the business being acquired would have generated earnings before interest, tax, depreciation and amortisation of $46 million on revenue of $107 million.

LSE, which bought stock index provider and asset manager Russell Investments in 2014, expects the EBITDA margin to rise to at least 50 percent within three years of the deal's completion, the company said.

“The acquisition of The Yield Book and Citi Fixed Income Indices supports the continued strong growth and development of London Stock Exchange Group's Information Services division,” said Mark Makepeace, CEO of FTSE Russell.

The Yield Book and Citi Fixed Income Indices have a client base of more than 350 institutions offering services used to analyse fixed income instruments including mortgage, government, corporate and derivative securities, Citi said.

Citi Fixed Income Indices includes the World Government Bond Index.

“This represents a very sensible deal as it helps LSEG grow its highly attractive info services division and will allow it to capitalise further on key industry trends including strong growth in multi-asset solutions and passive investment strategies,” said Numis analysts, who rate LSE as “hold”.

Citi was advised on the deal by its Institutional Clients Group. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Citi.

Barclays acted as financial adviser to LSE, while Freshfields Bruckhaus Deringer LLP was counsel.

The deal announced two months after EU regulators blocked LSE's planned merger with Deutsche Boerse, citing concerns over a potential monopoly in the processing of bond trades, will be funded from existing cash resources and credit facilities, the LSE said.

Shares in LSE, which have risen 12 percent since that merger was blocked, were up 0.2 percent at 3,398 pence at 0814 GMT.

By Noor Zainab Hussain

Barclays App technology could end supermarket queues

 

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(qlmbusinessnews.com via telegraph.co.uk – – Tue, 30 May, 2017) London, Uk – –

Barclaycard is developing technology that could put an end to the supermarket queue by allowing shoppers to charge in-store purchases to their mobile phone.

The smartphone app automatically charges items to a credit card when shoppers scan items using the phone’s camera, without them having to pay at a checkout.

Barclays workers are trialling the service at the company’s Canary Wharf headquarters, and the company says a high-street retailer is set to pilot it in the next year.

Usman Sheikh, Barclaycard’s director of design and experimentation, who is leading the project, said it was already speaking to a number of “significant household names”, including supermarkets, about the “Grab and Go” technology.

It would allow shoppers to walk into a store, scan each item in their basket with the phone, and check out virtually as they leave, without having to queue for a till. While Waitrose operates a “Quick Check” service that lets shoppers scan items as they shop, they must still go through a till to pay.

“People want less and less friction when they’re shopping,” Mr Sheikh said. “The time involved is literally a fraction of what it would take to go to the till.”

He said that Barclaycard could operate the service through its own app, or integrate the technology within retailers’ existing apps. Retailers would be able to monitor transactions on a screen and check virtual receipts to counter shoplifters.

Amazon is trialling its own checkout-free shops, which use a system of facial recognition cameras and sensors on shelves to determine what customers are buying. The “Amazon Go” store, which is currently being tested by employees in Seattle, charges shoppers as they swipe their smartphone on leaving the store.

Last week Amazon registered the trademark “No Queue. No Checkout. (No, Seriously.)” in the UK amid rumours, it is planning to open stores in Britain.

Mr Sheikh said Amazon’s technology was out of reach to most retailers. “For a normal merchant, there’s no way. Every shelf needs to be fitted with sensors so it’s not a scalable solution,” he said.

He said Barclaycard’s alternative was “very light from a tech perspective, all the technology is in your pocket and the merchant hasn’t done anything new”.

It now plans to test the technology at offices in Northampton, Teeside, and New York and Wilmington in the US in the coming weeks, and start trials with a retailer in late 2017 or early 2018.

By James Titcomb

Edinburgh Woollen Mill acquires Jaeger brand

Vincent Teeuwen/Flickr.com

Takeover of brand that once dressed Audrey Hepburn and Marilyn Monroe is part of retailer’s drive to launch Days departmental stores across the UK

Edinburgh Woollen Mill has confirmed the acquisition of the Jaeger brand as part of plans to launch a new 50-store department chain.

Philip Day, the billionaire owner of the Edinburgh Woollen Mill group, wants to open at least 50 of his eponymous Days stores, the first of which opened in Carmarthen, Wales, late last week.

The first Days store was opened in a former BHS and will house all the Edinburgh Woollen Mill group brands, which now include Austin Reed, Peacocks, Jane Norman and Country Casuals as well as Jaeger.

Others branches are expected to open shortly, in Newcastle and Bedford. The expansion comes despite the collapse of BHS, which has fuelled fears about the future of department stores in the age of online shopping.

Day told the Sunday Times he expects to pick up more struggling brands this year as business rates and the fall in the value of sterling have a major impact on the high street.

“Sometimes, lots of things all come at the same time, and I think 2017 is going to be one of those years,” he said.

In a statement issued on Sunday, Edinburgh Woollen Millen confirmed the collapsed Jaeger brand was now part of the group, the sale of which has proved controversial.

Private equity firm Better Capital put the business up for sale after struggling for several years to revive Jaeger. In the brand’s heyday, its clothes were worn by Audrey Hepburn and Marilyn Monroe but recently it has struggled to turn a profit amid heavy competition.

Day is understood to have bought the retailer’s debt and brand name in March but not the main company, meaning that the future of most of Jaeger’s 700 employees and payments for suppliers remains unclear.

Administrators have closed at least 20 of its 46 stores, making more than 200 staff redundant, and they remain in charge of the core business and its remaining staff.
A group of suppliers owed millions of pounds is considering taking legal action against its former owners.

The companies, which include the Portuguese clothing supplier Calvelex, tried to mount a rescue bid after Jaeger entered administration last month but found they could not buy the business because the rights to use the name had been sold.

Asked about the threat of legal action, Jon Moulton, the boss of Jaeger’s former owner Better Capital, said at the time the private equity firm had gone to great lengths to find a buyer for Jaeger without putting it into insolvency. “Any insolvency actions lie with the [Better Capital] fund’s successor,” he said.

Day, who took a £30.5m dividend from the Edinburgh Woollen Mill group in the financial year to February 2016 when the group made a pre-tax profit of about £90m on sales of £576m, has moved from his castle home in Cumbria to live in Dubai. He told the Sunday Times he spends fewer than 10 days a year in the UK.

By Sarah Butler