Risk & Economy » 5 things FDs need to know this week

1. Provident Financial shares plunge after massive fine

Vanquis Bank, a subsidiary of Provident Financial Group, saw shares plummet after being fined £75,000 by the Information Commissioner’s Office (ICO) after sending out a mass text message and email spamming campaign.

After sending out 870,849 text messages and 620,000 emails, the ICO said Britain’s biggest doorstep lender broke the law because the recipients had not consented to receiving the messages.

The company’s stock fell almost eight% after the news broke, and is the second big blow to hit the company after it was relegated form the FTSE 100 last month after £1.7 billion was wiped from its value after a profit warning was issued, reducing its market capitalisation from £2.58 billion to just £791 million overnight.

 

2. FCA drops inquiry into former Barclay’s exec, Richard Boath

One of the four top executives charged with criminal offences after Barclay’s bailout from the Government in 2008, has the watchdog’s inquiry against him, dropped.

The former European head of Barclay’s financisl institutions group, Boath was told the investigation into him had been dropped after his first appearance in court in July, according to the Financial Times.

He appeared in Westminster magistrates’ court over a fraud charge filed byu the Serious Fraud Office, alongside John Varley, Barclays’ former chief executive, Roger Jenkins, the bank’s head of the Middle East in 2008, and Tom Kalaris, former head of wealth management.

 

3. Russia bans access to bitcoin exchange websites

The Russian Central Bank has announced it will block access to websites of exchanges that offer cryptocurrencies, with the bank’s first deputy governor, Sergei Shvetsov, labelling digital currencies, ‘dubious’.

 

4. Bayer to sell assets to BASF

The multinational chemical, pharmaceutical and life sciences company is selling significant parts of its crop science business to rival BASF, the world’s third-largest maker of crop-chemicals, in its bid to satisfy regulators in its bid for Monsanto.

BASF will buy up assets for €5.9 billion in cash, as Bayer sells off assets worth around €2.5 billion to satisfy the European Commission in its acquisition of Monsanto.

The businesses included in the agreement generated ~€1.3B in net sales for 2016.

 

5. BAML beats Wall Street estimates for third-quarter earnings

Bank of America Merrill Lynch has beat analysts estimates of $0.46 per share, with reported earnings of $0.48 per share.

Revenue was at $22.08 billion, down from $23.2 billion in the second quarter, while net income was $5.6 billion, up from $5.2 billion in the second quarter.

Net interest income (NII) was reported at $11.4 billion, a 10% increase from last year, while total trading revenues were down 15% of $3.15 billion.

CEO Brian Moynihan said: “Our focus on responsible growth and improving the way we serve customers and clients produced another quarter of strong results,”

“Revenue across our four lines of business grew 4 percent, even with a challenging comparable quarter for trading.”

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