Peak hype for payments
Here is a counterfactual history. What if the Government had disposed of royal Bank of Scotland and held onto payments offshoot Worldpay in 2010?
It would own a fintech payments champion valued at £32.5bn and ridded itself of a troublesome bank of the same value.
The ink is barely dry on the deal under which Worldpay was sold to Vantiv by Philip Jansen (now chief executive of BT) for £7.9bn in 2018. US-focused Vantiv renamed itself Worldpay and kept a London quote designed to placate critics. With its global leadership in payments systems and leading-edge software, Worldpay could have been a great national champion for the post-banking era. Now Florida-based Fidelity National Information Services (FIS) is scooping it up for an astonishing price.
Under its new owner, Worldpay will operate across 146 countries.
The pioneering technology is very much rooted in the UK where some two-thirds of payments are made digitally.
The way in which payments systems are being snapped up by tech-savvy outsiders is a reminder of how Atlanta-based ICe became owner of the New York Stock exchange and dominates global share, derivatives and commodity trading. The FIS-Worldpay deal makes bank mergers, such as the proposed get together of ailing Deutsche Bank with Commerzbank, look like a relic from the past with the possible elimination of up to 30,000 jobs.
Financial groups such as FIS pose a new problem for regulators. The effort, since the financial crisis, has been to stabilise established banks by creating stronger capital, more liquidity and improved culture.
FIS will have the capacity to shift funds around the globe digitally and at speeds which conventional banks – with ancient correspondent relationships – can barely contemplate. No wonder that the governor of the Bank of england Mark Carney extols supranational supervision.
Klepto-capitalism
SHeLL chief executive Ben van Beurden rightly attracted opprobrium last week when it was revealed that as a result of longterm incentive shares coming good, his pay would double to £17.2m.
This was largely his payoff for engineering and seeing through the complex BG merger, and executing huge asset sales. But Van Beurden’s outsized reward looks almost modest when compared with the gross fatcattery revealed in housebuilder Persimmon’s annual report.
Impervious to criticism, former chief executive Jeff Fairburn was gifted a shade under £39m, to go with his £45.7m from the previous year. Charities must be rubbing their hands at the prospect of the donations he has promised.
What really sticks in the craw are the astonishing payments to his former lieutenants, who are now in the driving seat. New chief executive Dave Jenkinson has pocketed an astonishing £45.4m over the past two years and the finance chief Mike Killoran £62.7m – almost as much as Fairburn himself.
Chairman roger Devlin did a good job in ejecting Fairburn from office. But how on earth he and the board felt that they could replace him with Jenkinson, and leave the even more egregious Killoran in place, is incomprehensible. It is not just governance at Persimmon which has been wayward but also social responsibility.
It has built too many shoddy homes and focused on profit margins rather than building decent accommodation. It has exploited taxpayer-funded Help to Buy but contributed nothing to the greater public good. Indeed, it has abused some homebuyers by selling homes on escalating leaseholds.
The Government should show Persimmon a red card and ban it from Help to Buy.
The firm needs to demonstrate that it is capable of delivering for all stakeholders, not just a cabal at the top.
Store search
DISTUrBING trends on the High Street show no sign of easing.
Sir Philip Green’s Arcadia empire and Debenhams are closing stores in response to financial stress.
Sainsbury’s has been seeking a merger with Asda to future-proof itself. The picture looks grim.
Not, it appears, for privately owned German upstart Lidl.
It has taken a double-page advertisement in Property Week to announce it is expanding and seeking 60 sites across the country each year. It is interested in freehold, leasehold or long leasehold opportunities. Moreover, it is offering a 1.5pc finder’s fee.
There’s the spirit.