Companies in the news ... and how they were assessed
TSB: IT fiasco
Last weekend was supposed to mark the symbolic moment when TSB severed its final ties with Lloyds Banking Group, after being spun off in 2015 to the Spanish bank Sabadell. It resulted in a complete farce, said Rebecca Smith in City AM. A full five days after the bank began an IT upgrade to transfer 1.3 billion customer records from the Lloyds platform to a swanky new one of its own, customers were still complaining that they couldn’t access their mobile or online banking accounts. Hundreds of “furious” punters took to Twitter to vent about the glitch and TSB’S cack-handed management of it, said Simon English in the London Evening Standard. Some had stumbled upon details of other people’s accounts; others were credited with cash that wasn’t theirs. “Privately, rivals have long said that a major hurdle for TSB would be its creaking IT systems.” CEO Paul Pester has apologised and promised to compensate for any losses. But the fiasco will deal “a major blow” to his outfit’s credentials as a “challenger” bank aiming to grab market share from the big players. In the past, Pester has been an outspoken critic of “complacent” rivals. We may hear less about that now.
Sky Bet: skyrocketing
The fast-growing online bookie Sky Bet was tipped to be one of London’s “most highprofile and lucrative stock market floats this year”, said Liam Kelly in The Sunday Times. Bang goes another one. A wave of consolidation has been sweeping through the gambling industry and the latest deal has Sky Bet being snapped up by The Stars Group, the Canadian betting giant, for £3.4bn. The sale creates “the world’s largest digital gaming company” – and will also “crystallise an estimated £2bn profit” for private equity firm CVC, which bought 80% of Sky Bet from broadcaster Sky in 2014, in a deal valuing it at £800m. “Sky Bet, one used to think, was one of those interesting but insignificant businesses that large parent companies sometimes create in idle moments,” said Nils Pratley in The Guardian. How wrong we were. Sky collected “a few quid on the way”, but “CVC has made a fortune”. In retrospect, Sky obviously sold too soon – probably because it underestimated how rapidly mobile betting was growing. So, though, did plenty of others. Sky Bet is now worth slightly more than the stock market value of “grand old” William Hill. “Back in 2014, almost nobody would have predicted that.”
Barclays: go whistle
The penalty for Barclays boss Jes Staley’s whistle-blowing misdemeanours is “expected to add up to between £1m and £2m”, said Patrick Jenkins in the FT. Even for him, this is “not exactly pin money” (he earns about £4m a year). On the other hand, plenty of people think he’s lucky to have kept his job. City regulators last week found Staley guilty of “poor conduct” after a year-long probe into his attempts to hunt down an internal whistle-blower who had criticised senior management. But they were right not to “scalp” him, said Alistair Osborne in The Times. Staley was “foolish”, but he didn’t fail “the fit and proper test”. And his survival spares Barclays “the problem of finding yet another chief executive”. This decision was basically a “fudge”, said Lex in the FT. “Humble traders are routinely and rightly fired” for less serious compliance breaches – yet Staley survives. The FCA has fluffed “a tough decision”.