There was little cheer from the FTSE 100 earlier, sinking -0.30% as IAG shares lost altitude, down -5.5%. IAG profits touched down at €3.015bn this morning, short of expectations.
RBS investors also fretted about the looming mis-selling fine coming from the US Department of Justice despite a £752m profits lift announced at 7am. Mid-afternoon RBS shares were more than -4% down. The anxiety is not just limited to future US financial punishment but concern about the underlying profitability; one key calculation is the net interest margin, which has deteriorated and, at 2.13%, is markedly lower than RBS’ competitors.
The FTSE 250 managed to stay, just, in the green at 19,744. The Dow Jones and Nasdaq saw +0.50% gains this morning; both indexes, as the end of the week draws near, remain though more than 250 points down from the start of the week. The dollar index spot was +0.18% up at a little after 4pm while sterling edged +0.16% ahead to 1.3970 following a surprise dip earlier, down around 60 pips. Against the dollar the euro was -0.25% lower at 1.2294.
Brexit tension is again on the rise and increasing attention is focused on chancellor Philip Hammond as talk of Cabinet splits increase. The next key day is Tuesday when the latest deal agreed at Chequers is showcased to May’s Cabinet – though nipping before that is a customs union pronunciation from Jeremy Corbyn in the House of Commons on Monday. The B-word angst continues.
- UK FTSE 100 7,244.41 -0.11%
- DAX 12,486.17 +0.20%
- CAC 40 5,313.55 +0.08%
- Euro Stoxx 600 380.83 +0.13%
- Dow 25,042.40 +0.35%
- S&P 500 2,715.80 +0.44%
- Nasdaq 7,238.17 +0.38%
- Nikkei 225 21,736.44 -1.07%
- Gold 1,330.20 -0.19%
- Oil WTI 62.96 +0.30%
Persimmon bosses suffer £51m bonus cut
No-one likes a pay cut, especially a very public £25m one. Persimmon chief exec Jeff Fairburn will now manage on a £74m pay deal following widespread public unhappiness of epic pay awards made to a trio of Persimmon housebuilder execs.
Persimmon is slashing bonus payouts to three executives by £51m, including a £25m cut for its chief executive after the UK’s second largest housebuilder was lambasted over its controversial pay award structure. Finance boss Mike Killoran will see his bonus package shrink to £54m – a £24m pay cut – while managing director Dave Jenkinson will have his bonus snipped by £2m to under £40m.
Persimmon’s share price was buoyed by George Osborne’s help-to-buy housing incentive scheme pitched at first-time home buyers and part-funded by tax payers. Major Persimmon shareholder Aberdeen Standard Investments tagged Mr Fairburn’s bonus as “grossly excessive”.
Persimmon shares were +0.65% higher tonight at 2,475.00p; while +21% up in the last year they are more than +180% up since 2013.
VW profits power higher despite brand pollution
Any worry about the future of VW were seemingly despatched to the ether this afternoon as the German car maker confirmed a +16.5% surge in operating profits of €17bn for the last year. There was also a modest margin improvement.
In total VW sold 10.74m cars in 2017, a +4.3% improvement. “Shaping the Group's transformation will not only require a great deal of time and energy; it will also be very expensive,” warned finance director Frank Witter.
This week VW agreed to a +4.3% pay hike from May for 120,000 employees following a spate of 24-hour strikes. VW shares were trading at €162.60 tonight. Before 'dieselgate' they traded at more than €250 (April 2015).