The Times
RBS set for eighth loss after £2.5 billion hit for PPI and toxic loans: Royal Bank of Scotland is to record its eighth consecutive annual loss after taking a £2.5 billion hit.
Quarterly profits at Facebook hit $1 billion for first time: Facebook closed off another strong year of growth in 2015 with a quarterly profit of more than $1 billion for the first time and in excess of one billion daily active users.
Consumers warned to beware ‘liar loans’: The City regulator is warning consumers of the dangers of mortgage schemes that allow borrowers to bypass strict lending rules after a company offering the loans was overwhelmed by thousands of applications.
Aberdeen Boss dismisses pay revolt: More than a third of shareholders in Aberdeen Asset Management have protested over boardroom pay, rebuking the embattled fund management group for setting a remuneration package for the Chief Executive worth £4.3 million last year.
Sirius falls after delay to report on North York Moors mine: The delayed publication of a feasibility report into its ambitious potash project beneath the North York Moors sent shares in Sirius Minerals down by as much as 25%.
Antofagasta misses production targets: Plunging metals prices and a string of operational troubles meant that Antofagasta missed its production targets last year.
Homeowners ‘save £150 billion in interest’: Seven years of ultra-low interest rates have saved British households more than £150 billion on their mortgages, according to the Resolution Foundation.
The Independent
Google deal: HMRC accepts internet giant’s U.K. tax arrangements are legal: Britain’s tax authorities have conceded that Google need not pay tax on profits from advertising sold in this country, The Independent has learnt. As a result the firm will escape paying tens of millions of pounds to the Treasury.
Market turmoil shifts U.S. Fed’s calculations on interest rates: America’s central bank stressed that it is “closely watching” global markets in the wake of January’s turmoil, suggesting that it is likely to slow the pace of its monetary tightening.
Scotch whisky makers call for further cuts to ‘onerous’ 76% tax: Scotch whisky makers have called on the U.K. Government to cut tax on the bottle from an “onerous” 76%.
Terex gets takeover bid from Zoomlion despite existing Konecranes deal: A Chinese construction-manufacturing company has openly tried to buy out a U.S. rival for the first time, despite the rival being part of an existing deal with Finland’s Konecranes Oyj.
MEPs want to question George Osborne over ‘very bad’ Google deal: European MEPs have called for the Chancellor George Osborne to appear in front of the committee on tax rulings to explain the Google tax deal.
Financial Times
Areva move piles pressure on EDF: EDF has agreed a significant investment in the troubled reactor business of Areva, putting further pressure on the French utility as it scrambles to secure financing for a contentious £18 billion nuclear project in the U.K.
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Oil price forces Repsol to drill further into spending: Repsol has announced deeper spending cuts and billions of euros in write-downs sparked by the slump in crude prices to just $30 a barrel, the latest of the big energy groups to take further action.
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Frank Quattrone steps back at Qatalyst: Frank Quattrone, the investment banker most closely associated with the 1990s Silicon Valley technology boom, is stepping down as Chief Executive of Qatalyst Partners, the boutique firm he founded in 2008.
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Spotify looks to raise $500 million in debt as competition increases: Spotify is seeking to borrow $500 million from investors, just eight months after the world’s biggest music streaming service raised the same amount by selling equity at a valuation of $8.5 billion.
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Apple shares plummet on iPhone sales forecast: Apple shares closed down 6.6% on Wednesday, their third-largest single-day decline in a decade, after the company forecast a drop in sales of the iPhone.
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TalkTalk facing a further breach in Indian call-centre: TalkTalk is facing a further breach in the security of its customer records after three people were arrested in an Indian call-centre used by the telecoms group in connection with making scam calls.
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Deutsche Telekom and Orange to get £263 million dividend in BT/EE deal: Deutsche Telekom and Orange will be given a goodbye dividend payment of £263 million from EE before the £12.5 billion sale of their British mobile operator to BT is completed on Friday.
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Norfolk Southern to cut jobs, routes and locomotives: Norfolk Southern, the U.S. railroad being stalked by Canadian Pacific, on Wednesday outlined plans to cut staff, close routes and mothball locomotives amid a series of measures aimed at cutting annual costs by $650 million by 2020.
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Lex:
Italian banks: state paid: Italy’s struggling banks will now, under a deal announced on Wednesday, be able to bundle non-performing loans for securitisation and sale. The banks can then make the bundles more appealing by adding government guarantees to the senior tranches.
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Boeing: technical difficulties: A grounded earnings call may just be the perfect metaphor for Boeing. Early on Wednesday, it announced sharply disappointing orders and earnings forecasts for 2016. Its shares fell nearly a tenth (a market value loss of $6 billion).
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RBS: define “one-off”: RBS, the U.K. bank usually prefixed with “beleaguered”, on Wednesday warned of £4.1 billion in charges. As a result, next month it will probably report an eighth successive annual loss.
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Lombard:
RBS, stricken chicken: Ross McEwan, Chief Executive of Royal Bank of Scotland and sometime rancher, has big farmer’s hands. You can imagine them cradling a fluffy hatchling. Aah! Pity it’s such a sickly chick.
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Front runners: Do City folk have a habit of claiming greater influence than they really wield? One of six brokers tried for alleged involvement in Libor-fiddling told the court he claimed credit with Tom Hayes when Libor moved in the direction the trader wanted it to go, even though he had no contact with rate submitters.
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The Daily Telegraph
U.K.’s current financial crisis plan ‘won’t work in next downturn’: U.K. policymakers must fundamentally rethink the way they fight crises as central banks run out of ammunition to deal with the next downturn, a think-tank has warned.
David Cameron to visit Aberdeen to tackle North Sea jobs crisis: David Cameron has responded to growing concerns over the North Sea job crisis, saying he will visit Aberdeen on Thursday in a bid to help secure a future for the oil and gas industry.
Comparethemarket set for £1 billion stock market float: The parent company of price comparison website Comparethemarket is preparing to join the stock market, a decade after it was founded by a South African insurer.
Toyota sales slow but Japanese giant remains world’s biggest car company: Toyota has been crowned the world’s largest car company, selling 10.15 million vehicles last year.
Clydesdale float gets thumbs-up from shareholders: Clydesdale and Yorkshire Bank is set to become an independent lender at the start of February, as shareholders in its parent group have voted to sell the institution.
Stormy skies ahead for Boeing as it forecasts lower sales: Boeing has signalled a slowdown in the booming airliner market, with the aerospace giant forecasting a decline in sales in the coming year, news which sent the shares plunging.
The Questor Column:
Purplebricks as losses widen: Purplebricks, the online estate agent, has endured a tough first month of listed life. Questor would avoid the shares as they look highly overpriced, even after falling 18% since coming to the market. The company listed on the Alternative Investment Market (Aim) in December, with the shares valued at 100p, giving the entire group a market value of about £240 million. Revenue increased by 777% during the six months to the end of October, compared with the same stage a year earlier. The second half has started well, with a 275% year-on-year rise in revenue. Instructions in January are on target to hit 2,000 for the month. This kind of growth isn’t cheap. Once advertising and marketing costs are taken into account, the loss before tax widened to £6.4 million in the first half, up from £2.5 million a year earlier. The company still has enough cash to keep going, with £22.8 million raised from the markets in December adding to the £9.7 million it had in the bank at the end of October. The company faces fierce competition from rivals such as eMoov, Housesimple and easyProperty, and will have to spend heavily to fight for growth. Questor would avoid the shares because the company should have achieved a solid track record of sales and profits before listing. There is way too much risk, no profits and that exposes shareholders to painful losses. The house broker Zeus Capital forecasts pretax profits of more than £8 million by April 2017, but this looks overly optimistic. Sell. Purplebricks at 83p +8p. Questor says “Sell”.
The most worrying chart for Apple right now: Shares in Apple tumbled more than 4% after the company warned that sales are set to slow for the first time in 13 years. The biggest threat to Apple is the shortening of technology life cycles. Apple, the world’s largest company, expects revenue for the three months to the end of March of between $50 billion and $53 billion, which will mark a decline on the $58 billion during the same period last year. Growth in iPhone sales, which was 46% a year ago, was just 0.4% in the three months to the end of December. Total revenue was $75.9 billion, a marginal increase on last year. If sales of the iPhone have peaked already, then the downturn in trading will be painful. Apple generates almost 70% of its sales from the iPhone, 10% from Mac computers, 8% from the iPad, and 12% from services such as iTunes, Beats headphones and iPods. A large portion of Apple’s iPhone sales is dependent on consumer demand in China, where the company has admitted it is seeing “economic softness”. Shares in Apple are looking extremely expensive given the slowing sales and falling profit margin. We most recently recommended selling Apple shares in May last year at $126, and they have fallen 25% since then. In order to get an indicative share price, investors can apply a rating of sector peers such as Intel or Cisco, which trade on around 13 times earnings, or $44. Apple at $95.31 -$4.67. Questor says “Sell”.
Hold Avon Rubber after shares tumble 17%: Avon Rubber has two main businesses: one is designing and making gas masks, which generates around 80% of group profits. The other, somewhat incongruously, is making rubber suction systems used to milk cows. The dairy operations have come under pressure from falling milk prices, which in turn have squeezed farmers’ budgets. The dairy business was expanded through the €30 million (£21 million) purchase of Italian-based InterPuls last year, but Avon warned that demand remains weak in this sector. Turning to the gas mask business, Avon holds the enviable position as the sole provider to the U.S. defence department, and is midway through a 10-year contract with the government. It delivered 240,000 of its M50 gas masks last year and has another 50,000 on order for the year ahead. The defence contract provides steady revenues, but the real opportunity comes from one-off orders from customers in the Middle East who pay a premium. A flurry of these orders helped the group as a whole increase revenue by 8% to £134.3 million last year, while adjusted pretax profits jumped 20% to £19.8 million. The shares enjoyed a fantastic run last year, gaining more than 30%, and had probably become a little too expensive. Pretax profits for the year to September are expected to be flat at £19.8 million, giving 49p in earnings per share. So, trading on 17 times earnings, the shares are still not exactly cheap. However, we’d hold for the long term. Avon Rubber at 841p +15p. Questor says “Hold”.
The Guardian
Women should hold quarter of top jobs at major businesses, says CBI head: More needs to be done to propel women into the top jobs in Britain’s biggest businesses, to boost economic growth, according to the head of the CBI – who wants all major companies to ensure that a quarter of all senior roles are held by women.
Federal Reserve keeps interest rates unchanged while monitoring markets: U.S. stock markets fell again on Wednesday as the Federal Reserve announced it would keep key interest rates unchanged while pledging to closely monitor developments in the global economy and financial markets.
Legal & General to build and rent out 3,000 new U.K. homes: British insurer Legal & General has teamed up with a Dutch pension fund Manager to construct 3,000 apartments across the U.K. under a £600 million “build-to-rent” plan.
Number of Chinese tourists visiting U.K. soars nearly 40%: The number of Chinese tourists visiting the U.K. soared 37% in the first nine months of last year, taking the total to more than 200,000 in 2015.
Daily Mail
Fiat Chrysler Automobiles raises profit targets as car buyers fall in love with the Jeep: The car giant behind Fiat, Jeep and Maserati posted stronger than expected sales for the past three months, triggering it to raise annual profit targets.
Blow to Serious Fraud Office as brokers are cleared of plotting to rig the Libor rate with crooked trader Tom Hayes: Five stockbrokers – including one nicknamed Lord Libor – have been cleared of plotting to fix the banking rate in a bid to make millions of pounds of profit.
Dow dives 222 points as U.S. rate rises fear grips New York markets: Markets in New York took fright over fears U.S. interest rate could still rise despite recent market turmoil.
U.K. House building at highest level since the financial crisis but still too low to solve the chronic shortage: House building in Britain has reached its highest level since the financial crisis but remains too low to solve the chronic shortage.
Metro Bank sees losses start falling again in the fourth quarter as it gears up for likely London stock market float next month: Metro Bank trimmed its losses in the fourth quarter as it gears up for an expected stock market flotation next month, with customer numbers rising by 46% to 655,000 over the past year.
High street bank giant Santander reveals 4.1% fall in U.K. profits after £450 million hit for future PPI payouts: High street banking giant Santander has revealed profits last year took a £450 million hit from the cost of setting aside compensation for mis-selling payment protection insurance.
Daily Express
Shell votes yes to £35 billion BG takeover: Shell is closing in on a £35 billion takeover of BG Group after its shareholders backed the deal creating the world’s biggest liquefied natural gas provider.
Five bankers found not guilty of rigging Libor rates ‘in exchange for curries’: Five former city bankers have walked free after being not guilty over a plot to rig crucial world interest rates.
China’s stock markets lose £1.2 trillion in just one month – sending U.K. into panic: Chinese stock markets nose-dived even further to take total losses this month alone to an eye-watering £1.2 trillion.
‘Declaring war’ China hits out at George Soros and says West is responsible for world mess: China has lashed out at famous investor George Soros and warned him against ‘declaring war’ on its economy and currency.
The Scottish Herald
Aberdeen property firm expands in Central Belt: Knight Property Group has shown confidence in the prospects for the Edinburgh office market by announcing plans to refurbish two city centre properties before securing tenants for them.
Glasgow refrigeration group appoints new group managing Director: Star Refrigeration, the Glasgow-based refrigeration and heating contractor, has appointed its former group engineering Director Dr Andy Pearson to the position of group managing Director.
Packaging group explains rationale for China sell-off: British Polythene Industries, the Greenock-based packaging group, said it would be paying down some of its £30 million debt pile after selling a Chinese subsidiary for £9.4 million.
Aero engineers sell consultancy to U.S.: Two former Rolls Royce engineers who set up a consultancy 20 years ago have sold it to a 6000-employee U.S. corporation.
The Scotsman
365 jobs under threat at Texas Instruments in Greenock: Hundreds of jobs are under threat after an American electronics firm announced the closure of its Greenock factory.
Pickering’s Gin expands with Antipodean exports: Edinburgh gin distiller Pickering’s has doubled its production capacity after winning export deals in Australia and New Zealand.
Confidence growing in licensed trade sector: Despite fears that Scotland’s licensed sector continues to struggle, the industry has experienced a boom in businesses changing hands across the country.
Nicola Sturgeon visits Clyde Space as they announce U.S. expansion: The Glasgow company which designed and manufactured Scotland’s first satellite, announced it is opening its first subsidiary company in the United States.
City A.M.
Bank shares overvalued as Eurozone leans on Germany and France struggles: Most European bank shares are overvalued, according to more than half (54%) of U.K. fund Managers polled by accountancy giant EY.
Law firm Ashurst begins search for new managing partner after James Collis announces he will be returning to the finance practice in May: Law firm Ashurst has revealed that it has started the selection process for its next managing partner, as its current managing partner will step down when his term ends.
Household spending power slows to 14-month low, Asda income tracker shows: The average household income grew at its slowest rate in 14 months, a new survey has found, due to a slowdown in wage growth and a slight increase in inflation.
Google tax: European Commission sets out new proposals to crack down on tax avoidance: The European Commission will put forward new proposals to crack down on tax evasion and avoidance, as U.K. politicians continue to spar over Google’s tax payments.
eBay share price dives 10% as profits and revenues slip: Shares in online retailer eBay have plunged by more than 12% in after-hours trading, after the company revealed a 28% drop in profit for the fourth quarter of 2015, down to $523 million (£367 million) from $729 million at the same time in the previous year.
PayPal share price jumps as it posts 15% revenue growth in 2015 as mobile usage grows: Online payment firm PayPal has reported a 17% increase in revenue during the fourth quarter of 2015, up to $2.6 billion (£1.8 billion), while revenue for the year grew by 15% to $9.2 billion.
U.K. and Ireland among 31 countries signed up to OECD tax co-operation agreement: The OECD has announced that 31 countries have signed up to a new tax co-operation agreement to enable automatic sharing of country-by-country information.
EU referendum: Brexit could cause a total loss to U.K. GDP of two to seven%, says AXA economist: If Britain votes to leave the European Union the loss to the U.K.’s gross domestic product would lie between two and seven%, according to a top AXA economist.
Pershing Square’s Bill Ackman apologises to investors as the hedge fund records its worst ever performance and Paul Hilal resigns: Bill Ackman, Founder and Chief Executive of Pershing Square, has apologised to investors after his hedge fund recorded its worst ever performance last year.
