Business news in brief
Barclays FX ‘cartel’ trader Ashton loses unfair dismissal suit
A Barclays trader fired amid the foreign-exchange market manipulation scandal has lost his unfair dismissal case in London.
The bank took “appropriate actions in light of Chris Ashton’s gross misconduct”, a London employment tribunal judge said in a 19 September ruling.
Ashton was a member of the “cartel” – the name given to a now notorious chat room used by senior traders at banks including Barclays, JPMorgan Chase & Co and UBS to share information and agree on ways to try to move currency benchmarks including the so-called 4pm fix.
He is the most high-profile of more than half a dozen traders and sales people who said in lawsuits that they were fired as banks rushed to appease regulators.
During a hearing in July, Barclays officials cited transcripts of chats Mr Ashton participated in that included discussions about “using inside information” to make money, a joke about his best friend’s wife and references to the cartel.
Mr Ashton’s lawyer declined to comment about the ruling, which can be appealed. The decision was dated about three weeks after Mr Ashton, who was based in London, was banned from the US banking industry by the Federal Reserve.
Bloomberg
Entertainment One’s ‘Peppa Pig’ bolsters sales
Entertainment One said its hit children’s TV show Peppa Pig has helped boost sales and profits. The company, which recently rebuffed a £1bn takeover bid by ITV, revealed an independent valuation of its library had risen to $1.5bn (£1.2bn) from $1bn.
This was driven by a strong performance in its family division and the acquisition of another 35 per cent of popular children’s TV show Peppa Pig. The company also said the BFG and Woody Allen’s Café Society were among new films that helped it boost box offices sales by nearly 56 per cent to $151m (£116.6m).
Entertainment One said it was on track to hit full-year forecasts, which analysts currently expect to be £971.7m in sales, a 21 per cent increase, and pre-tax profits of £120.6m, a 152 per cent rise.
Santander scales back profitability target post brexit
Banco Santander lowered its profitability target for 2018 as growth expectations worsened in the UK and other countries where the Spanish bank does business. Santander seeks a return on tangible equity of more than 11 per cent by 2018, it said in a presentation to investors on yesteray. The previous target, stated last year, was 13 per cent.
“While the environment in some of our markets has deteriorated, our strategy and business model continue to deliver for our customers and shareholders,” chief executive officer Jose Antonio Alvarez said in a separate statement.
The lender reiterated its commitment to increase its dividend per share and earnings per share in each of the next three years. Several European banks, including the Royal Bank of Scotland Group, HSBC and UBS, watered down their guidance for returns when presenting second-quarter results.
Lower interest rates, higher regulatory costs and slower credit demand in mature markets are making it harder for Santander to become more profitable, Alvarez said in yesterday’s presentation.
Bloomberg
Porsche set to face investor test-case over VW-Diesel probe
Porsche may follow Volkswagen into a morass of investor lawsuits over how the companies informed the public about the diesel emissions scandal. A Stuttgart court is likely to bundle nearly 150 lawsuits under a special procedure that is akin to US class-action cases, Judge Fabian Richter Reuschle said at a hearing yesterday. He was presiding over a case filed by a UK pension fund that is seeking €5.7m (£4.91m), while all the cases total about €900m (£775m), the judge said.
The Porsche shareholders say they lost money because the company failed to disclose the risks Volkswagen faces from the diesel scandal in a timely manner. Since then-Volkswagen chief executive
officer Martin Winterkorn also served on Porsche’s board, the company, which owns more than 50 per cent of VW’s stock, should have disclosed the scheme on its own, they argue.
The suits in Stuttgart constitute a second front for lawyers for investors. Shareholders were hard hit as VW’s stock price dropped 35 per cent and Porsche’s 32 per cent in the two trading days last year after US regulators disclosed the software that detected when a car was on a test stand and reduced harmful emissions to allow the vehicle to pass inspections.
Porsche spokesman Albrecht Bamler denied the allegations and said Winterkorn wasn’t permitted to share confidential information he received in his role at VW.
Bloomberg
Average house price rises to £206,015 in September
House prices continued to edge upwards across the UK in September, but the pace of growth has softened, according to an index. Across the UK, the average house price is now £206,015, following an increase of 0.3 per cent month-on-month and 5.3 per cent year-on-year, Nationwide Building Society reported. This follows a monthly increase of 0.6 per cent and an annual uplift of 5.6 per cent seen in August.
Property values in Wales were the weakest-performing across the UK, with a 0.5 per cent annual fall in prices taking the average property value there to £146,172. In Scotland, values increased by 2 per cent annually, pushing the average house price there to £143,275, while in Northern Ireland, values were up by 2.4 per cent annually, taking the average price to £130,581.
For the first time in seven years, London was outside the top three regions in the UK with the strongest house price growth, Nationwide said. House prices in the capital increased by 7.1 per cent annually in the third quarter of 2016, slowing from a 9.9 per cent rate of growth seen in the second quarter of this year.
Robert Gardner, Nationwide’s chief economist, said the “relative stability” of house price growth seen across the UK suggests that a softening in demand seen from buyers in recent months has been matched by a lack of supply of homes. He said: “Survey data indicates that, while new buyer enquiries have remained fairly subdued, the number of homes on the market has remained close to all-time lows.
PA
RBS high street bank ring-fencing to be completed in 2018
Royal Bank of Scotland has said it will complete the ring-fencing of its retail banking operations by the end of 2018. The lender, which is still 73 per cent owned by the Government, is required to separate its investment banking operations from its high street arm by 2019.
“In order to be compliant with its requirements, we need to undertake a significant reorganisation of our current legal entity structure and business model,” the bank said yesterday. The group said NatWest will become its main customer-facing brand in England, Wales and western Europe, while in Scotland RBS will be its core brand. Its investment banking arm will become known as NatWest Markets.
Chief executive Ross McEwan said: “Our proposed future structure under the ring-fencing legislation and our brand strategy are key elements of the bank we are becoming. The future ring-fenced structure of the bank is not only designed to be in compliance with the new regulatory requirements and objectives but will better reflect who we are as a bank and what we stand for: a bank that is focused on its customers.”
Earlier this week, RBS revealed that it is to pay $1.1bn (£845m) to a US regulator to settle two claims over
mis-sold mortgage bonds in the run-up to the financial crisis.