|Bid||4.4400 x 1400|
|Ask||4.8500 x 27000|
|Day's Range||4.4400 - 4.4900|
|52 Week Range||4.3300 - 7.3100|
|Beta (3Y Monthly)||1.01|
|PE Ratio (TTM)||26.81|
|Forward Dividend & Yield||0.68 (14.05%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- Is your company immune to Brexit? With the looming threat of the U.K. leaving the EU without a withdrawal deal and a slim but rising risk of the pound plunging to parity with the dollar, more chief executives are telling investors they can handle any eventuality – however messy.Unfortunately, having a fully fleshed out Brexit contingency plan is a luxury not all firms can afford. Nor does it solve the question of how any company will cope if a no-deal departure crashes the economy.A hunt through Bloomberg’s trove of filings of company financial results throws up six publicly-traded companies that have labeled themselves “Brexit-proof,” or close to it. These are: healthcare facilities provider Primary Health Properties Plc; wealth manager Rathbone Brothers Plc; food producer Cranswick Plc; industrial real estate firm Stenprop Ltd.; Lloyd’s of London and the payments technology provider Net 1 UEPS Technologies Inc.Their confidence stems either from the niche products that they sell, their domestic U.K. supply chains (meaning less exposure to a sudden rise in tariff barriers to trade), or the fact that they’ll keep EU-based hubs that remove the uncertainty of regulatory hurdles.They’re not alone in their messages of comfort. Much of the finance world has had to prepare for the worst, including the likes of Barclays Plc, HSBC Holdings Plc and Royal Bank of Scotland Group Plc. Other industries are joining the fray. “Leaving the EU without a deal is not corporate death for us, but it’s annoying,” the boss of the Volskwagen AG-owned luxury carmaker Bentley said this week. A no-deal scenario means only “mild disruption” for the retailer Next Plc, according to its CEO Simon Wolfson. Is this complacency or just sound planning?There are three big Brexit risks cited frequently by companies: Tariff barriers, non-tariff or regulatory hurdles, and logistical issues such as holdups at ports.On tariffs, the Confederation of British Industry lobby group has offered up some dire warnings, including textile imports from Turkey facing an average charge of 12% post-Brexit and vehicle exports to the EU getting whacked with a 10% levy. But some firms think they can take the pain. Next estimates 20 million pounds ($24 million) in additional input costs from import duties, equivalent to a 0.5% price increase on its clothing products. Chemicals producer Croda International Plc estimates a “mid-to-high single-digit million” impact from tariffs, a cost it would partly absorb and partly pass on to customers. Makers of higher end stuff, such as $200,000 Bentleys, will be confident of getting shoppers to fork out more if their costs go up.On the threat of more regulation and other non-tariff changes, some CEOs are equally sanguine. Croda’s management says it’s ready to re-register its products in the EU in the event of a no-deal departure. Next says there’s no reason why independent testing of its products would stop them being acceptable to Brussels regulators.On the fear about logistical snarl-ups in the immediate aftermath of a sudden U.K.-EU rupture, the more optimistic British bosses point to their stockpiling of goods and securing of alternative supply routes. Several say they’ve amassed six months’ worth of supply usually delivered from Europe. Bentley and Next say they can avoid the crowded Dover-Calais shipping route if it’s disrupted. “I’m much less frightened of no-deal,” says Wolfson.It’s important to remember, however, that all of this preparation costs money (and that Wolfson is a Conservative Party peer and leave voter). A look at Next’s 11-page Brexit contingency plan published last year shows an elaborate new structure to limit the pain. It has set up a German company through which it intends to shift more European sales and an Irish entity to handle orders there.Yet allocating millions to emergency plans means delaying investment or passing on the cost to suppliers or clients. Some companies can swallow this more easily than others. For Westley Group, a small foundry and engineering group, a loss of 2 million pounds in EU orders related to Brexit last year equated to 7% of its revenue. That’s significant.And managing to survive the worst ravages of a hard break with Europe won’t mean much if the U.K. economy is worse off. Investors are certainly betting that way by favoring the big, internationally diversified companies of the FTSE 100 over those that make most of their sales in Britain.The chart above shows a 13% performance gap over the past year between the shares of British exporters (which get most of their revenue overseas) and those of domestically-focused U.K. companies. It’s interesting that the latter group include companies that claim to be fully prepared such as Barclays.One thing CEOs can't control is investors’ own emergency plans.\--With assistance from Mark Gilbert .To contact the author of this story: Lionel Laurent at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Royal Bank of Scotland is poised to announce that Alison Rose will be its next chief executive, making her the first woman to run a large British bank. Ms Rose saw off competition from Ian Stuart, the head of HSBC’s ringfenced UK bank, to win the backing of RBS’s board of directors, according to two people briefed on the plans.
The departing Royal Bank of Scotland chief executive has backed Bank of England warnings about the impact of a no-deal Brexit, saying that leaving the EU without an agreement would cause some medium-term “pain and anguish”. that a no-deal Brexit would cause an “instantaneous” shock in which a “substantial number” of businesses might no longer be economically viable. about a no-deal Brexit, saying that while he would prefer to leave the EU with a renegotiated agreement, his government is preparing “with great confidence” to do so without one.
European stocks nosedived on Friday after Donald Trump escalated the trade war with fresh tariffs on a further $300 billion of Chinese goods.
Investing.com - U.S. futures were lower on Friday after U.S. President Donald Trump reignited the U.S.'s trade war with China by saying he would impose tariffs on the remainder of U.S. imports from China from September.
(Bloomberg Opinion) -- If you want an unequivocal example of how Brexit has hurt the British taxpayer, look at Royal Bank of Scotland Group Plc.Since its record-breaking bail-out in the financial crisis, the Scottish lender has struggled to get back on its feet. It tried shrinking its trading businesses, shedding assets and eliminating costs – only to be stymied by a string of expensive legal settlements over past misdeeds, from benchmark-rigging to the marketing of toxic mortgage-backed securities.Its path to recovery has now become more tortuous as the uncertainty over Britain’s departure from the European Union weigh on the economy. If taxpayers were hoping to recover some of the tens of billions of pounds they sunk into RBS in its unprecedented crisis-era rescue, Brexit is making that goal significantly harder to reach.On Friday, RBS admitted that a squeeze on margins and a slowing domestic economy mean it will be unlikely to post a return on equity of more than 12% in 2020 or be able to reduce its cost-income ratio to below 50%. Those targets were downgraded to medium-term goals, to be met in an unspecified timeframe.The stock, down 18% since the vote to leave in June 2016, was the biggest faller among European bank stocks on Friday, sliding to as low as 202.7 pence. That’s just roughly half the price the government paid for its shares.It’s not just Brexit that’s the problem: Trade tensions, low interest rates, and fierce competition in the U.K. mortgage market aren’t helping. Nor is the risk that RBS risks being broken up in the event that Jeremy Corbyn’s Labour party takes power.“It’s a particularly tricky time for U.K. companies and especially banks,” Chairman Howard Davies said. Hurting the U.K. lender most has been the investment climate because it's become very difficult for large customers to commit to spending, he added.Asked about the outlook for the U.K. economy, Davies pointed to the Bank of England, which yesterday lowered its growth forecast for this year on the back of slower exports and weak business investment.Meantime, RBS also saw an uptick in impairments, which were higher than what some analysts were expecting, as the firm identified signs of strain among some single borrowers. Rising credit stress, albeit from a historically low base, is another indication of the tougher outlook.There is one small consolation for the U.K. taxpayer. While RBS’s common equity Tier 1 ratio fell to a lower-than-expected 16%, is it still well above the bank’s target of 14%, giving it room to keep returning capital to shareholders. The bank said on Friday it will pay a special dividend.Wherever the Brexit discussions head next, RBS looks to be stuck in an uncomfortable purgatory. At least Chief Executive Officer Ross McEwan, soon to depart for National Australia Bank Ltd., has an escape route. British taxpayers don’t enjoy the same luxury.To contact the author of this story: Elisa Martinuzzi at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
A slump in shares of automakers, miners and chipmakers led European stocks to their biggest losses in more than seven months on Friday after Washington's announcement of new tariffs on Chinese goods raised fears of a further hit to global growth. Germany's trade-sensitive DAX index slumped 3.1%, while losses for luxury goods makers, which draw a large part of their revenue from China, dragged down France's CAC 40 by 3.6%. Abruptly ending a temporary trade truce between the two countries, U.S. President Donald Trump said on Thursday he would impose a 10% tariffs on $300 billion of Chinese exports to the United States from September 1, prompting Beijing to warn of retaliation.
Royal Bank of Scotland on Friday said deteriorating economic conditions before Brexit were likely to derail next year's profitability and cost targets after it reported strong first-half results, including a 1.7 billion pound dividend. The results show how the bank's outgoing CEO Ross McEwan has put RBS on a surer financial footing, but his successor will now face major challenges, including steering RBS through any Brexit fallout and returning the lender to private hands. RBS warned that in the first half of the year some of its consumers and businesses were struggling as the chances rise of a disorderly departure from the European Union.
Barclays, Citigroup, JPMorgan, Royal Bank of Scotland and UBS are facing a £1 billion ($1.23 billion) class action lawsuit over rigging the foreign exchange markets — one of the biggest cases of its kind in the UK.
(Bloomberg Opinion) -- When law firm Linklaters decided to organize a seminar about the forthcoming demise of Libor last week, it planned to hold the event in its London auditorium, which seats about a hundred people. After more than 500 attendees signed up, it was forced to move to a larger venue.Thursday’s packed attendance at the Honourable Artillery Company’s headquarters strikes me as testament to how corporate treasurers, bankers, accountants and consultants are belatedly realizing the scale of the task finance faces in replacing what was dubbed – and still arguably is – the world’s most important interest rate. But the awakening may still have come too late to avoid a chaotic and expensive denouement to the benchmark.The borrowing costs known as the London interbank offered rates are embedded throughout the DNA of finance. Untangling them, after the Financial Conduct Authority’s announcement two years ago that they’ll be phased out by the end of 2021, is proving difficult through a combination of apathy, complexity and a lingering hope that Libor will somehow limp on in some form or other.In the worst-case scenario, the disappearance of Libor could lead to the courts ruling that some existing contracts are deemed to have been frustrated. In legal terms, that happens when an event either makes enforcement of a contract impossible, or completely undermines the contract’s original intentions.This would place the market in largely uncharted territory – “contractual Armageddon,” in the words of Rick Sandilands, senior counsel, Europe at the International Swaps and Derivatives Association.The most extreme outcomes could be for the frustrated contracts to be unwound as if they never happened in the first place, or a court trying to account for the various benefits that had accrued during the contract’s life to come up with a settlement that treated parties to the agreement fairly.It’s an unlikely, though not impossible, scenario. But many of the legal experts who spoke at the Linklaters conference discussed the need for flexibility when writing or amending contracts that run past Libor’s end-date, because it’s still not 100% clear what form the replacement interest rate will eventually take, especially given that different countries are seeking different solutions.And where a lawyer sees elasticity, a hedge-fund may see potential profit. There’s a non-negligible risk that where a contract change creates a winner and a loser in financial terms, litigiously minded mischief makers may try their luck.Even without that doomsday outcome, rewriting contracts that refer to Libor is fraught with byzantine convolutions. Take, for example, a syndicated loan that pays interest based on Libor and was used to finance a toll road in Spain. Changing the terms probably requires the consent of the syndicate of banks that arranged the loan, as well as the borrower, as well as the providers of any hedging agreements undertaken, and maybe the agreement of the Spanish local authority that leased or sold the land the road is on. Now multiply that across the entire project finance universe to see the complexity of the shift to new benchmark borrowing costs.There has been some progress in persuading U.K. companies to adopt the Sterling Overnight Interbank Average rate, the preferred replacement for Libor. Last month, Associated British Ports Plc switched its 65 million pounds ($81.4 million) of floating-rate notes to making interest payments tied to Sonia rather than Libor. And last week, National Express Group Plc took out the first Sonia-based loan, from Royal Bank of Scotland Group Plc’s NatWest unit.While both are desirable developments in the shift to the overnight benchmark, a few deals do not a transition make. Linklaters estimates as much as $2 trillion of loans risk being left “in limbo” by Libor’s demise. And while more than 40 new sterling floating-notes tied to the new benchmark have been sold this year, there are billions of dollars, pounds and yen of outstanding notes that still base their payments on Libor – as much as $864 billion worth, according to the International Capital Markets Association.The logistical difficulty of rounding up the disparate investors in those securities to get them to agree to change the reference benchmark is daunting, to say the least. Moreover, even when the paperwork contains language about what to do if Libor isn’t available, that documentation was designed for brief periods of absence, rather than envisaging a world without Libor.In many cases, the interest payments revert to a fixed rate based on the final Libor determination – again creating the prospect of legal action from financially disadvantaged actors, legitimate or otherwise.Edwin Schooling Latter, the FCA’s director of markets, warned last week’s conference participants that they can expect “a lot of supervisory interest” if the regulator decides customers are being gouged by members of the finance community gaming the changes. He was adamant, meantime, that participants should come up with market solutions to the realignment rather than relying on the regulator to intervene.“I love deadlines,” wrote Douglas Adams, the British author of books including the Hitchhikers Guide to the Galaxy. “I love the whooshing noise they make as they go by.” With less than two and a half years before Libor’s scheduled death, the explosion in the world of finance if it arrives at the deadline without more preparation than is currently happening will be somewhat louder than a whoosh.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Jennifer Ryan at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Ross McEwan became the CEO of The Royal Bank of Scotland Group plc (LON:RBS) in 2013. This report will, first, examine...
Just over a decade after fending off insolvency, taxpayer-backed Royal Bank of Scotland is struggling with an unfamiliar dilemma: how to effectively deploy billions of pounds of excess capital on its balance sheet. Years of cost cuts and asset sales have left the lender with jam-packed coffers, which management had hoped could help buy back the government's 62% stake in the quickest time possible. A few months ago, analysts and bank insiders believed the government was poised to begin selling RBS's stock back to the bank, a key step in a sales process aimed at reducing concerns about potential political interference in its lending activities.
Banks could be punished if they don't switch enough contracts from the Libor interest rate benchmark to a Bank of England alternative by the end of 2021, a senior British regulator said on Wednesday. The Financial Conduct Authority has told each bank to nominate a senior manager who is accountable to regulators for ensuring that contracts switch from referencing the London Interbank Offered Rate, or Libor, to the BoE's sterling overnight rate, Sonia. The FCA has the authority to fine or remove a senior banker's licence.
He'll take up the position of chief product officer and will lead productdevelopment for the new brand, reporting to Bó CEO Mark Bailie