Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts

Mar 4, 2021

News | Business I Food Inflation Expectation: Normal Levels of Food Inflation in 2021 is Expecting Kroger CEO.

 cnbc.com

Kroger CEO says he expects normal levels of food inflation in 2021 but that prices may be volatile

Kevin Stankiewicz

Kroger CEO Rodney McMullen told CNBC on Thursday he does not anticipate problematic food inflation in 2021, while cautioning that month-to-month prices may be volatile.

“For the whole year, we expect inflation to be at 1% to 2%, which is a pretty normal number,” McMullen said on “Closing Bell.”

The grocery executive’s outlook matches food-at-home price forecasts from the Bureau of Labor Statistics’ Consumer Price Index. McMullen’s comments come as the topic of inflation across the broader U.S. economy is in sharp focus.

Wall Street has for weeks been paying close attention to the rising yield on the benchmark 10-year Treasury, which was around 1.547% on Thursday. The yield was below 1% at times in January, but it has been increasing on expectations of a strong economic recovery from the coronavirus pandemic, in addition to a potential pickup in inflationary pressures.

Federal Reserve Chairman Jerome Powell said Thursday he does expect to see “some upward pressure on prices,” but signaled he does not believe they will be long-lasting enough for the central bank to raise interest rates. The Fed cut the target range for its overnight funds rate to near zero last March as the pandemic intensified.

“We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” Powell said Thursday at the Wall Street Journal Jobs Summit.

With respect to grocery store prices, McMullen said there could be variability, especially when comparing them with 2020 levels during the early parts of the pandemic.

“If you look at the second quarter a year ago, we had huge inflation in meat,” McMullen said, which happened after the health crisis led to closures of meatpacking plants.

“This year we would expect to have pretty large deflation, so when you look at it overall, we’re still at the 1% to 2% estimate, but it will be very bumpy along the way,” McMullen said.

Shares of Kroger closed higher by 2.5% on Thursday to $34.09 apiece. The company reported fourth-quarter results earlier in the day, topping analyst estimates with earnings per share of $0.81. Quarterly revenues of $30.74 billion fell short of Wall Street’s forecast of $30.86 billion.

Mar 2, 2021

News | Business | UK Budget 2021: 5 Things to Look After.

 bbc.com

Budget 2021: Five things to look out for from Rishi Sunak

By Daniel Thomas

Chancellor Rishi Sunakimage copyrightGetty Images

Chancellors typically view Budgets as political theatre - a moment to set the tone as they show off their wisdom, generosity and vision for the future.

But when Rishi Sunak sets out the government's tax and spending plans this Wednesday, it will not be him taking centre stage but the ongoing crisis engulfing the nation's health and finances.

The government has borrowed a record £270bn so far fighting the pandemic and has to come up with a way of paying it back. But it also needs to continue supporting the millions still out of work or on furlough due to the downturn.

But he's warned of tough economic times ahead and there are reports that he plans to raise some taxes.

Here are five things to look out for in Wednesday's speech:

Pizzeria waitress with mask onimage copyrightGetty Images

1. More support for jobs and workers

The chancellor has already said he "is preparing a Budget that provides support for people" as unemployment hovers at a five-year high and four million workers are on furlough.

Mr Sunak is likely to extend the job support scheme - which pays up to 80% of wages - until 30 June. That's just over a week after the final lockdown restrictions could be lifted at the earliest.

He is also tipped to extend a £20-per-week uplift to Universal Credit for six months, after intense pressure from MPs and charities to do more to help the poor get through the pandemic.

Some want him to go further and make the uplift permanent - but the chancellor may resist as he struggles to get government borrowing under control.

2. Will he cut business rates?

Mr Sunak may have promised grants of up to £18,000 to get businesses going again, but the bigger question is what he will do about business rates.

MPs across the board say the tax, which is calculated using the value of a company's premises, is unfair and outdated. The boss of Next, Lord Simon Wolfson, recently told the BBC rates could kill off the High Street and countless jobs if they aren't reformed.

The chancellor is likely to leave the thorny question of what to do about the tax - including levying a so called "Amazon tax" on online retailers - until the autumn.

However, reports suggest he will extend the business rates holiday - brought in last year to support shops - beyond its current end date of 31 March and into the summer.

Pound coin and notesimage copyrightGetty Images

3. Will he raise taxes?

Despite the anticipated generosity, the chancellor has said he will use the Budget to "level" with the public about the challenges facing the economy and the need to repay the vast sums of public money spent during the crisis.

According to reports, Mr Sunak is likely to announce some tax increases - although whatever he does will have to fit around with the Conservative party manifesto pledge not to raise income tax, national insurance or VAT.

Some think he will instead raise corporation tax from its current level of 19% to 23%, which is still below the G7 average. It would be staggered over the course of the parliament, reportedly bringing in £12bn.

There are also rumours he will freeze the personal income tax allowance, which usually rises in line with inflation, pushing many taxpayers into higher bands and netting HMRC about £6bn.

Tory backbenchers are strongly opposed to tax rises, while the Labour leader Kier Starmer has warned they risk "choking off" a rapid economic recovery.

But ex-Conservative leader Lord Hague has said "personal and business" taxes must rise to help government finances.

Southampton Portimage copyrightPA Media

image captionSouthampton is teaming up with Portsmouth as part of a south coast freeport bid

4. Help for levelling up?

The chancellor is likely to set out his vision for a post-Covid (and -Brexit) economy, which could mean more money for "levelling up" different parts of the UK.

According to the Financial Times, he is preparing to announce the locations of freeports - special economic zones with low taxes that would help stimulate regional growth.

He's also expected to announce more funding to help the UK meet its decarbonisation goals.

There are likely to be measures to promote more environmentally friendly homes and renewable energy - but he is not expected to raise fuel duty.

homesimage copyrightGetty Images

5. Stamp duty holiday extension

The stamp duty holiday introduced last year not only propped up the housing market at the start of the crisis, it also drove up the average value of a home by 8.5% in 2020.

That tax break is up at the end of March, and many buyers have found themselves facing big bills if they don't complete their transactions on time. However, Mr Sunak will extend stamp duty holiday to prevent this cliff edge, reports suggest.

The government mortgage guarantee scheme will offer 95% mortgages for houses worth up to £600,000.

It is based on the Help to Buy mortgage guarantee scheme, which closed to new loans at the end of 2016, a policy the Treasury said "reinvigorated the market for high loan-to-value lending after the 2008 financial crisis".

But housing charity Shelter said that scheme increased house prices by 1.4%, making housing less affordable for many.

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News | Business | Automotive Industry: Volvo Cars Will be Fully Electric by 2030

 bbc.com

Volvo Cars to go fully electric by 2030

BBC News

Volvo car chargingimage copyrightGetty Images

Volvo Cars is only going to sell electric vehicles by 2030, the Swedish firm has said.

It will phase out all car models with internal combustion engines by then, including hybrids.

The carmaker is also planning to invest heavily in online sales and simplifying its products.

It is trying to capitalise on growing demand for electric cars, including in China, which is already one of its biggest markets.

Carmakers are also responding to pressure from governments around the world to beef up their electric car plans.

New cars and vans powered wholly by petrol and diesel will not be sold in the UK from 2030, for example.

Volvo's chief technology officer, Henrik Green, said the company needed to switch focus: "There is no long-term future for cars with an internal combustion engine."

Bjorn Annwall, head of Europe for Volvo, told the BBC's Wake up to Money programme the plan fitted with both Volvo's image and commercial interests.

"At Volvo our customers expect high levels of us when it comes to human safety and they are starting to expect exactly the same thing when it comes to planetary safety, we aim to live up to that, it's the right thing to do," he said.

"The fully electric premium segment will be the fastest growing part of the automotive market, so it's very natural to focus on that."

Its online push means customers will be able to order cars to their own specification online, but also through a dealership.

Volvo will not be investing in cars with hydrogen fuel cells, as it does not think there will be enough demand from customers. There is also a question mark over hydrogen's availability in comparison with charging points for electric cars, a spokesman said.

Volvo previously announced that by 2025, half of its sales would be fully electric, with the rest being hybrids.

media captionShould I buy an electric car?

Last month, Volvo abandoned plans to merge with Chinese car giant Geely. But the two companies said that they would form a partnership instead to make components for electric cars that would be used by both firms.

Global carmakers continue to pursue alliances to spread the cost of the transition to electric cars, tougher emission rules and autonomous driving, as well as pooling expertise and resources.

In January, shareholders approved a merger between Fiat Chrysler and France's PSA Group, creating the world's fourth biggest carmaker. The new group, Stellantis, would be able to "bet big on new innovations in electric, connected and autonomous vehicles", analysts said at the time.

Feb 26, 2021

News | Business |Airlines: Owner of IAG Makes a Call For Digital Health Passes.

 bbc.com

British Airways owner IAG calls for digital health passes

BBC News


British Airways plane interiorimage copyrightGetty Images

British Airways owner IAG has called for digital health passes "to reopen our skies safely" as it posted a record loss for 2020 due to Covid disruption.

IAG posted an operating loss of €7.4bn (£6.5bn) for last year after the pandemic grounded many of its flights.

UK-focused airlines got a boost this week from government plans for travel markets to possibly reopen from mid-May, prompting a flood of bookings.

But uncertainty remains about what routes will be available.

The airline group - which also owns Iberia, Aer Lingus and Vueling - called for "a clear roadmap for unwinding current restrictions when the time is right."

"We're calling for international common testing standards and the introduction of digital health passes to reopen our skies safely," said IAG's boss Luis Gallego.

IAG said that the ongoing uncertainty and duration of the pandemic meant that it could not provide a forecast for future profits.

Laura Hoy, equity analyst at Hargreaves Lansdown, said: "There's no getting around just how ugly IAG's final results are.

"With the coronavirus crisis clearing the skies for over a year, it's not unexpected to see IAG operating as just a shell of its former self.

"Management has responded in the only possible way - by securing new funding and slashing costs - but ultimately the group is at the mercy of the government's travel restrictions."

The government is in the process of talking to to G7 and other countries to try to build a consensus on how to allow more foreign travel.

Greek tourism minister Haris Theoharis told the BBC last week that early technical discussions were underway with UK officials about how a potential passport scheme might work.

Planes parkedimage copyrightGetty Images

The International Air Transport Association (IATA) also said this week that it expects its digital Covid Travel Pass will be ready soon.

The pass is an app that verifies a passenger has had the Covid-19 tests or vaccines required to enter a country. It also verifies they were administered by an approved authority.

Transport Secretary Grant Shapps said a review of how to return to international travel while managing risk from imported cases and virus variants would report on 12 April.

Capacity cut

IAG said that revenues last year sank by 69% from €25.5bn to €7.8bn amid the coronavirus-related restrictions on travel.

During 2020 it operated at a capacity of just 33.5% of the levels seen in 2019, and for January to March this year it expects capacity will drop to just 20% of pre-pandemic levels.

The airline group has been trying to boost its finances as it burns through cash in the pandemic.

Most recently, BA secured an extra £2.45bn through a UK government-backed loan and from deferring pension contributions.

Last October, IAG got shareholder backing for a €2.74bn rights issue, adding to savings made from 12,000 planned job cuts.

Despite the hefty losses, IAG has stuck to its plan to buy Spain's Air Europa, announcing in January the price tag had halved to €500m, with payment deferred for six years.

Feb 25, 2021

News | Business | Tesla: : Tesla Takes a Chinese 3,200 Pounds Electric Car

 bbc.com

Chinese £3,200 budget electric car takes on Tesla

By Justin Harper

By Justin Harper
Business reporter, BBC News

The Wuling Hong Guang Mini EV, an electric car that has quickly won over Chinese drivers.image copyrightGetty Images

A budget electric vehicle (EV) selling in China for $4,500 (£3,200) is now outselling Tesla's more upmarket cars.

The compact car is proving a big hit for state-owned SAIC Motor, China's top automaker.

The Hong Guang Mini EV is being built as part of a joint venture with US car giant General Motors (GM).

Last month sales of the budget electric car in China were around double those of Tesla, which was questioned this month over safety issues there.

While the $4,500 Hong Guang Mini is the most popular model, there is an upgraded one with air conditioning for just over $5,000. The cars are being marketed as "the people's commuting tool".

The joint venture partnership, SAIC-GM-Wuling, is known as Wuling locally.

Car experts have said that while it clearly lags well behind Tesla when it comes to its battery, range and performance, its convenience and low price have made it one of China's bestselling "new-energy" vehicles.

Having launched last year, the basic model has a top speed of 100km/h (62mph) and can accommodate four people at a squeeze.

"China's government is serious about pollution reduction and becoming the global lead in adopting and promoting innovation of electric vehicles," Shaun Rein, managing director of the China Market Research Group, told the BBC.

"We remain very bullish on the adoption of budget EVs like the Hong Guang Mini to higher end ones like NIO and Tesla."

To promote EVs, the Chinese government offers license plates for free and they are guaranteed. In many cities, it can take months, if not years, to get a license plate for a petrol engine through various auction systems.

The Hong Guang Mini EV is being built under a joint venture known as Wuling with US car giant General Motors (GM).image copyrightGetty Images

Taking on Tesla

The Hong Guang Mini EV saw sales of 112,000 for the second half of 2020, ranking second behind Tesla's Model 3 which are made in its Shanghai factory.

Earlier this month five Chinese regulators summoned Tesla over quality and safety issues at its plant. China is Tesla's largest market after the US.

For January, Hong Guang Mini sales outstripped Tesla almost two-to-one. It is now believed to be the second-best-selling electric model worldwide behind the Model 3.

media captionA look at some of the best technology news stories of the week

The tiny, all-electric EV sold 25,778 models in China in January according to the China Passenger Car Association (CPCA). This compares to 13,843 for the Tesla Model 3.

But high-end electric vehicles have still been performing well with Tesla more than doubling its sales volume in China last year.

The Model 3 sells for about $39,000 (£27,000) in China factoring in price cuts due to its local production.

The Hong Guang Mini EV could make an appearance outside China, as Wuling has said it plans to export the EV overseas.

"China has so many makers of small and cheap electric vehicles, however most of them are low-quality and low-speed products that do not appeal to a wide market, said Sam Fiorani, at Auto Forecast Solutions.

"The Hong Guang Mini is the first time a major company has stepped up with a simple EV that targets buyers looking for a real car."

Reports have linked Wuling to a Latvian automaker who could sell a version of the car in Europe. However, the price is likely to be twice as high due to European environmental requirements.

Feb 19, 2021

News | Business: Retail Sales Fall in January according to ONS.

 bbc.com

Retail sales slump in January amid lockdown

BBC News

Debenhams store closureimage copyrightGetty Images

Retail sales fell sharply last month with many stores closed amid the latest coronavirus lockdown restrictions, official figures have indicated.

Sales sank 8.2% in January from the month before, the Office for National Statistics (ONS) said.

Department and clothing store sales were particularly affected last month, the ONS said.

However, the share of online sales hit a record high and accounted for over a third of total spending.

"The latest national lockdown led to a sharp monthly fall in January's retail sales, with April 2020 the only month on record to see a bigger slump," said the ONS's deputy national statistician for economic statistics, Jonathan Athow.

"However, the decrease seen this time was not as large as that of the first lockdown, as some stores have adapted to the current circumstances, with services such as click-and-collect helping to cushion the fall."

Online spending hit a record proportion of 35.2% of all sales, he added, while sales at food stores were boosted by the lockdown closures of pubs and restaurants.

Feedback from retailers suggested that the closure of the hospitality sector had boosted sales of food and alcohol, the ONS said.

Retail sales chart

'Step-change'

Restrictions to non-essential retailers have hit the non-food sector worst during the coronavirus pandemic.

Sales in the sector plunged 24.4% in January, although this was not as severe the fall seen during the first lockdown in March 2020.

"There are signs that retailers have adapted better to the latest lockdown," said Lisa Hooker, consumer markets leader at accountants PwC.

"While non-grocery stores took the brunt of the pain, with sales volumes declining by a quarter, they were still over 50% higher than in the first lockdown last April."

She added that while the first quarter of the year is traditionally quieter for retailers, "stores will be hoping that a rapid re-opening will allow shoppers to spend the estimated £10,000 that households have saved on average during the lockdowns".

Richard Lim, chief executive of Retail Economics, said he thought the pandemic has "driven a step-change in online shopping".

"A new wave of digital shoppers have broken down the initial barriers of setting up online accounts, entering payment details and overcoming issues of trust," he said.

Consumers now "seamlessly transition" to online sites and apps discovered during previous lockdowns, Mr Lim added.

"It's inevitable that some of these behaviours will become a permanent feature of the industry as consumers embrace a new way to shop and the industry boosts online capacity."

News | Business: GamemeStop Episode " Unacceptable

 bbc.com

Robinhood boss says GameStop episode 'unacceptable'

BBC News

Vlad Tenev, co-founder and co-CEO of investing app Robinhood, speaks during the TechCrunch Disrupt event in Brooklyn borough of New Yorkimage copyrightReuters

image captionVlad Tenev, co-founder of Robinhood, said his firm was forced to temporarily limit GameStop trades.

The head of the Robinhood trading platform has apologised to customers at a US congressional hearing prompted by last month's GameStop trading frenzy.

Vlad Tenev said the situation the firm faced in January - when financial strains led it to limit certain stock purchases - was "unacceptable to us".

"We are doing everything we can to make sure this won't happen again," he said.

Lawmakers said the move, which sparked outrage, had raised questions about fairness in financial markets.

"Many Americans feel that the system is stacked against them and no matter what, Wall Street always wins," said congresswoman Maxine Waters, who heads the House Financial Services Committee holding the hearing.

Mr Tenev said the firm, which is popular among everyday investors, was forced to temporarily limit trades in GameStop and some other firms due to new financial requirements it faced because of the surge in trading.

He said the firm moved quickly to raise new funds, which would help it avoid making similar moves in the future.

He also denied that Robinhood had been acting at the behest of anyone else.

"I'm sorry for what happened. I apologise," he said. "I'm not going to say that Robinhood did everything perfectly, and that we haven't made mistakes in the past, but what I commit to is that we improve from this."

Other key players called to testify at the hearing also denied wrongdoing in the affair, which saw the price of GameStop shares rise from less than $20 at the beginning of January to more than $350 in a matter of weeks.

The astonishing rise, apparently fuelled by a swarm of independent traders swapping tips on social media forums such as Reddit, has sparked probes examining the possibility of market manipulation and other potential conflicts of interest.

Robinhood's ties to Wall Street firm Citadel Securities have faced particular scrutiny.

Robinhood receives fees from Citadel, which pays to execute Robinhood customer orders. Citadel last month also invested in Melvin Capital, one of the hedge funds hit by losses after betting that GameStop's shares would fall.

iKenneth Griffin, CEO of Citadel, is seen in a framegrab from live video as he testifies about stock trading and GameStop, during an entirely virtual hearing of the U.S. House of Representatives Committee on Financial Servicesmage copyrightReuters

image captionCitadel and Robinhood attracted most of the attention at the hearing

Kenneth Griffin, the head of Citadel Securities, said no one in his company had any discussions with Robinhood about restricting trades in GameStop or other so-called "meme stocks".

"I first learned of Robinhood's trading restrictions after they were announced," he said.

Mr Griffin and Mr Tenev attracted most of the attention at the sometimes combative hearing, which saw lawmakers raise potential regulatory changes, such as requirements that firms disclose when they have made large bets against a stock.

Melvin Capital hedge fund manager Gabriel Plotkin told lawmakers that he was wary of holding short positions again after retail investors pushed GameStop shares higher, causing the firm shed 53% of its value.

Industry needs to adapt

"They exploited an opportunity around short selling and we will have to adapt and the whole industry will have to adapt," he said.

Republicans sought to head off new rules, noting that it was government requirements that precipitated Robinhood to limit trades.

"Piling on more and more regulations only increases complexity and does not help investors," said Barry Loudermilk, a Republican representative from Georgia.

Ms Waters hit back at characterisations of the hearing as "political theatre" - but also suggested that she was not rushing to additional action.

"I didn't hear anyone here say they were ready to pile on regulations," she said.

Others testifying at the hearing included Melvin Capital chief executive Gabriel  Plotkin, Reddit chief executive Steve Huffman, and Keith Gill, a Reddit user and YouTube streamer known as Roaring Kitty who promoted his investment in GameStop.

Shares in the loss-making video games retailer have fallen back since January, closing at about $40 on Thursday.

Feb 18, 2021

News | Business | NewsCorp-Google Agreement: The Two Companies Agree Over Payments for Journalism.(February 17,2021).

 theguardian.com

News Corp agrees deal with Google over payments for journalism

Alex Hern

Google and Rupert Murdoch’s News Corp have signed a multi-year partnership that will lead to the search engine paying for journalism from news sites around the world, including the Wall Street Journal, the Times and the Australian.

The deal, which involves News Corp receiving “significant payments” to feature the company’s news outlets in Google’s News Showcase product, will last for three years, and comes with a number of other investments from Google, including “meaningful investments in video journalism” and the development of a subscription platform.

Robert Thomson, the chief executive of News Corp, said the deal would have “a positive impact on journalism around the globe as we have firmly established that there should be a premium for premium journalism”. “I would like to thank [Google CEO] Sundar Pichai and his team at Google, who have shown a thoughtful commitment to journalism that will resonate in every country. This has been a passionate cause for our company for well over a decade and I am gratified that the terms of trade are changing, not just for News Corp, but for every publisher.”

In a statement, Google’s Don Harrison, its president of global partnerships, said: “Today’s agreement with News Corp covers a wide range of our products such as News Showcase, YouTube, Web Stories, Audio and our ad technology. News Showcase has partnerships with over 500 publications around the world, demonstrating the value this product can bring to our news partners and readers everywhere. We hope to announce even more partnerships soon.”

The deal follows a proposal from the Australian government to force Google and Facebook to enter arbitration with Australian media companies forcing them to pay for not only excerpts of news articles, but also simple links to news websites. A number of major backers of the plan, including TV networks Seven and Nine, have agreed to be featured in Google’s News Showcase over the past week. With News Corp now signing its own deal, only a few Australian media companies remain as holdouts.

This week, the proposed legislation arrived in parliament, with the government standing firm in the face of threats from Google to pull out of Australia entirely if it passed, and Facebook’s proposed plan to ban news on the site.

News Corp’s Thomson specifically thanked the Australian government in the company’s announcement of the deal, highlighting “Australian competition and consumer commission’s Rod Sims and his able team, along with the Australian prime minister, Scott Morrison, and treasurer Josh Frydenberg, who have stood firm for their country and for journalism”.

By contrast, Microsoft last week publicly suggested extending the Australian government’s proposal worldwide. The company suggested Bing would be happy to fill any gaps in service if Google pulled out of Australia, which Microsoft president Brad Smith credited with prompting an early concession from the search engine.

“Our endorsement of Australia’s approach has had immediate impact,” Smith argued. “Within 24 hours, Google was on the phone with the prime minister, saying they didn’t really want to leave the country after all. And the link on Google’s search page with its threat to leave? It disappeared overnight. Apparently, competition does make a difference.”

Google News Showcase, the company’s flagship news service, is slowly rolling out worldwide. In the UK, Showcase launched at the beginning of February, with partners including the Evening Standard, the Financial Times, New Statesman and the Telegraph. The Guardian, Daily Mail owners DMGT and the BBC were among those not involved at the outset, meaning their journalism will not be displayed to users of the app.

News Showcase is intended to better display journalism on Google’s news platform, although some have dismissed it as a simple channel for Google to funnel payments to the news industry; it was launched with a commitment from Google CEO Sundar Pichai for $1bn in funding.

News | Business | Banks: Barclays on Thursday Reported a full Year Profit for 2020 down 38% From 2019.

 cnbc.com

Barclays reports 38% slide in net profit for 2020, resumes dividend payouts

Elliot Smith

Barclays on Thursday reported a full-year profit of £1.53 billion ($2.11 billion) for 2020, down 38% from 2019 but outstripping analyst expectations.

The British lender posted a fourth-quarter net profit attributable to shareholders of £220 million, despite the U.K. navigating fresh nationwide lockdown measures amid a resurgence of Covid-19.

Strong performance in the corporate and investment bank, which saw full-year income increase 22% to £12.5 billion, offset a sharp incline in impairment charges as a result of the deteriorating economic outlook brought about by the pandemic.

Analysts polled by Refinitiv had expected a fourth-quarter net loss of £44.88 million to bring about a full-year net profit of £1.22 billion.

Barclays CEO Jes Staley told CNBC's "Squawk Box Europe" on Thursday that there would be pent up demand in the U.K. economy to unlock later in the year.

"The U.K. consumer in the face of the pandemic has clearly significantly dropped spending, but by the same token, has invested in strengthening the individuals' balance sheets, notably by growing their deposits, and we feel that on our balance sheet," Staley said.

"You do have to believe that once the pandemic is behind us, those deposits represent pent up spending, and we will see that in economic activity hopefully in the second half of this year."

The final earnings report of 2020 followed a surprisingly strong third quarter in which the bank recorded a £611 million net profit.

Full-year profit in the previous year came in at £2.46 billion with a 2019 fourth-quarter profit of £681 million.

Other highlights:

  • Common equity tier one capital (CET1) ratio reached an all-time high of 15.1%, up from 14.6% at the end of the third quarter.
  • Return on tangible equity (RoTE) was 3.2%, down from 5.1% the previous quarter.
  • Net interest margin (NIM) was 2.61%, down from 3.09% at the end of 2019.
  • Credit impairment charges for the full year reached £4.8 billion, versus £1.9 billion in 2019.
  • Full-year profit before tax was £3.1 billion, down from £4.4 billion in 2019.

Dividend payments

Barclays also announced that it would resume dividend payments to shareholders of one pence per share and embark on a £700 million share buyback. The Bank of England requested last year that British lenders suspend payouts to shareholders.

Addressing the drop in RoTE, Staley said the bank was able to remain profitable in each quarter of 2020 due to the diversified business model implemented five years ago, with the investment bank reacting differently to the consumer banking division.

"Whilst our consumer bank struggled and brought down that profitability, in large part because we took significant impairment charges to build a reserve, the investment bank actually had a return on capital in the year of over 13%, so that has kept the bank profitable each quarter," he said.

'Canary in the coalmine'

Barclays shares fell 2.9% by early afternoon trade on Thursday, with some analysts suggesting that concerns over the bank's retail arm, which took a significant hit from lower margins and consumers taking on less credit while paying down debts since the onset of the pandemic.

"The deteriorating economic situation also forced Barclays to increase the amount of cash it sets aside for bad lending by more than 150% to £4.8bn, which could be a canary in the coalmine for something serious coming down the line," said Adam Vettese, analyst at investment platform eToro.

"If the economy falters again then bad debts could become a problem not just for Barclays but the UK banking sector as a whole."

Russ Mould, investment director at online stockbroker AJ Bell, said market attention was drawn in by concerns about the scale of Covid-induced bad debt provisions and a warning that this could continue to affect earnings in 2021.

"Alongside the issues around loans which have gone sour, Barclays is also, conversely, suffering a hit to margins due to the trend for the people with the necessary means to pay down debt and avoid big purchases on credit during lockdown," Mould added.

"There may also have been some disappointment at the pretty nominal nature of the dividend – though anyone who thought payouts were going straight back to pre-pandemic levels in a hurry wasn't paying attention."

Maria Rivas, senior vice president for global financial institutions at DBRS Morningstar, said the results demonstrated the resilience of Barclays' diversified business model, and suggested the 3.2% RoTE was not out of line with most of its peers in the current challenging environment.

"We view it as challenging for the Group to achieve its target of an RoTE of >10% in the short-term given revenue pressure in the consumer-related business is likely to persist in 2021," she added.

"Furthermore, impairment charges to date have primarily reflected non-defaulted provisions for Stage 1 and Stage 2 loans but we would expect asset quality to further deteriorate with an increase in Stage 3 loans driven by corporate defaults."

News | Business | Walmart Shares : Walmart Shares Fall for mixed Results.

 cnbc.com

Walmart shares fall on mixed results, retailer sees sales growth slowing in coming year

Melissa Repko

A worker wearing a protective mask arranges shopping carts outside a Walmart store in Duarte, California, U.S., on Thursday, Nov. 12, 2020.

David Swanson | Bloomberg | Getty Images

Walmart's fourth-quarter earnings felt short of Wall Street's expectations on Thursday, as the retailer aims to turn the strength of its e-commerce business during the pandemic into lasting momentum and higher profits.

Shares are down nearly 4% in premarket trading.

The discounter's e-commerce sales in the U.S. grew by 69% — a large number, but the slowest growth rate since the start of the global health crisis. Same-store sales in the U.S. grew by 8.6%, higher than the increase of 5.8% expected by a StreetAccount survey. Its subsidiary, Sam's Club, also reported low single-digit same-store sales growth, excluding fuel and tobacco.

Walmart, however, cautioned that it expects sales to moderate this year. It said earnings per share will decline slightly, but be flat to higher after excluding divestitures. The company's tailwinds from pandemic trends may also fade, as more Americans get Covid-19 vaccines and spend their budget in other ways, such as going out to dinner or filling up the gas tank on a commute back to the office.

Walmart CEO Doug McMillon said that the company has stepped up investments to keep up with the significant ways that retail has changed over the past year. He said it will also boost the wage of U.S. workers, raising the average for hourly employees to above $15 per hour. 

"This is a time to be even more aggressive because of the opportunity we see in front of us," he said in a news release. "The strategy, team and capabilities are in place. We have momentum with customers, and our financial position is strong."

Walmart swung to a loss of $2.09 billion, or 74 cents per share, from earnings of  $4.14 billion, or $1.45 share, a year earlier. Excluding items, Walmart earned $1.39 per share, missing analysts estimates. 

Total revenue grew by 7.3% to $152.1 billion from $141.67 billion a year earlier, topping Wall Street's expectations of $148.30 billion.

Its membership warehouse club, Sam's Club, reported same-store sales grew by 8.5% excluding fuel and tobacco. The membership warehouse club's e-commerce sales jumped by 42%.

Walmart is raising its dividend and authorizing $20 billion stock buyback program.

This story is developing and will be updated.

Read the full press release here.

News | Social Media facebook Australia: Australian Prmi Minister Said His Goverment Will Not Be Intimidated by Tech Company.

 bbc.com

Facebook Australia: PM Scott Morrison 'will not be intimidated' by tech giant

BBC News

media captionAustralians react to Facebook's news ban

Australian Prime Minister Scott Morrison has said his government will not be intimidated by Facebook blocking news feeds to users.

He described the move to "unfriend Australia" as arrogant and disappointing.

Facebook is responding to a proposed law which would make tech giants pay for news content on their platforms.

Australians on Thursday woke up to find that Facebook pages of all local and global news sites were unavailable.

People outside the country are also unable to read or access any Australian news publications on the platform.

Several government health and emergency pages were also blocked. Facebook later asserted this was a mistake and many of these pages are now back online.

Google and Facebook have fought the law because they say it doesn't reflect how the internet works, and unfairly "penalises" their platforms.

However, in contrast to Facebook, Google has in recent days signed payment deals with three major Australian media outlets.

Some 37% of consumers who took part said they had gained access to news via social media over the course of a week, compared with 31% who had directly accessed websites or apps, the report said.

What is the response to the ban?

"Facebook's actions to unfriend Australia today, cutting off essential information services on health and emergency services, were as arrogant as they were disappointing," he said.

"I am in regular contact with the leaders of other nations on these issues. We simply won't be intimidated," he added.

Mr Morrison urged Facebook to work constructively with the government, "as Google recently demonstrated in good faith".

Treasurer Josh Frydenberg said the ban on news information had a "huge community impact". About 17 million Australians visit the social media site every month.

Other officials were less diplomatic. Western Australia Premier Mark McGowan accused the company of "behaving like a North Korean dictator".

ABC News Australia Facebook pageimage copyrightFacebook

image captionPages like that of national broadcaster ABC have been blocked

Others suggested that a news vacuum could be filled by misinformation and conspiracy theories. In a tweet, Sydney Morning Herald editor Lisa Davies described the move as a "tantrum".

Human Rights Watch's Australia director said Facebook was censoring the flow of information in the country - calling it a "dangerous turn of events".

"Cutting off access to vital information to an entire country in the dead of the night is unconscionable," said Elaine Pearson.

What about the public reaction?

Many Australians are angry about their sudden loss of access to trusted and authoritative sources.

"It feels obviously very restrictive in what Facebook is going to allow people to do in the future, not only in Australia but around the world," Peter Firth, in Sydney, told the BBC.

Amelia Marshall said she could not believe the firm's decision "in the middle of a pandemic", adding: "I've made the long-overdue decision to permanently delete my Facebook account."

Why is Facebook doing this?

Australian authorities had drawn up the laws to "level the playing field" between the tech giants and struggling publishers over profits. Of every A$100 (£56; $77) spent on digital advertising in Australian media these days, A$81 goes to Google and Facebook.

But Facebook said the law left it "facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia".

A woman looks at the Facebook logo on an iPad in this photo illustration taken June 3, 2018image copyrightReuters

image captionFacebook said it was making the change "with a heavy heart"

The law sought "to penalise Facebook for content it didn't take or ask for", the company's local managing director William Easton said.

Facebook said it helped Australian publishers earn about A$407m (£228m; $316m) last year through referrals, but for itself "the platform gain from news is minimal".

However, news is the third biggest reason for why people go to social media, according to Reuters' Digital News Report.

Facebook is by far the most important social platform for news. In Australia, about 36% of people use the platform for news. Meanwhile, only 14% of Australians pay for online news.

Also, media companies have seen a long-term decline in advertising revenue while that of Google and Facebook has risen in recent years.

Under the ban, Australian publishers are also restricted from sharing or posting any links on their Facebook pages. The national broadcaster, the ABC, and newspapers like The Sydney Morning Herald and The Australian have millions of followers.

What will happen to the law?

Australia's conservative government is standing by the law - which passed the lower house of parliament on Wednesday. It has broad cross-party support and the Senate is likely to pass it next week.

"We will legislate this code. We want the digital giants paying traditional news media businesses for generating original journalistic content," said Mr Frydenberg who added that "the eyes of the world are watching what's happening here".

He pointed out that Facebook, like Google, had been negotiating pay deals with local organisations. This banning action had "come at an eleventh hour" and damaged the site's reputation, he said.

Presentational grey line

Facebook wants to call the shots

Australia is not a big market for Facebook. And Facebook says news isn't a big driver of revenue for the company. So why does it care so much about this law?

This is far more about the principle. Other countries have been looking at what is happening in Australia. There's speculation that Canada, even the EU could follow Australia's lead - something Facebook wants to avoid.

Facebook does already pay for some news. It's entered into commercial deals with media companies in the UK, for example.

What Facebook wants to do, however, is call the shots.

Its executives do not want governments to step in, telling them they have to pay for news - and even setting the price.

Facebook, then, has decided to show that there are consequences for governments if they want to take muscular action against Big Tech.

News | Business | Coronavirus Loans: Barclais Sayys Loans of 4.8 Million Pounds Could Never be Repaid.

 bbc.com

Coronavirus: Barclays says loans of £4.8bn may never be repaid

BBC News

Woman at Barclays cash pointimage copyrightGetty Images

Barclays has reported a big drop in annual profits, having set aside billions of pounds for loans expected to turn sour due to the pandemic.

The bank reported a 30% fall in pre-tax profits to £3.1bn for 2020, down from £4.3bn in 2019.

It was forced to set aside £4.8bn to cover loans unlikely to be paid back amid the economic fallout of Covid.

Despite that the bank announced it would resume dividends, with a payment of 1p per share to shareholders.

'Resilient and diversified'

The bank has been one of the biggest providers of emergency loans during the coronavirus crisis, having given some £27bn worth to businesses.

It has also provided more than 680,000 payment holidays globally for customers with mortgages, credit cards and loans.

Barclays warned that pandemic-related costs would remain high throughout the coming year, but that it expected loan loss charges to be "materially below" last year's hit.

Some £492m was set aside to cover expected defaults by borrowers in the final three months of 2020, but that was down nearly a fifth on the previous quarter.

Barclays added that investment banking trading had helped to offset the impact of the Covid crisis on its retail arm, with its "best ever year" for markets and banking income helping to keep the group in profit.

"We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021," group chief executive Jes Staley said.


Banking analyst Philip Augar told the BBC's Today programme that "it's clearly not great news" for the bank.

"I suppose the consolation for the economy and for Barclays shareholders is that it could have been worse.

"The amount that they've been providing against bad loans has been less, quarter by quarter, and that might be a sign that we're past the worst, but they're pretty cautious in what they say."

He added that he felt it was "prudent" for the bank to resume dividends payments to shareholders, after regulators permitted this in December.

Banks had been told to stop making the payments in March last year in order to build up capital to absorb potential loan losses caused by the pandemic.

In addition to the dividend, Barclays is also set to return cash to investors via a share buyback (where companies listed on the stock market purchase some of their own shares) of up to £700m.

Bonuses rise

In its annual report published alongside the results on Thursday, Barclays revealed its staff bonus pool was 6% higher than the £1.5bn shared out in 2019.

It said this represented a "relatively modest increase across the investment banking businesses, reductions for all other businesses and appropriate recognition for the contributions of our more junior colleagues".

Mr Staley took home £4.01m last year, although that was down on the £5.9m paid out in 2019.

Dividends and bonuses against the backdrop of the coronavirus crisis will remain in sharp focus this week. State-backed banking giant NatWest is also set to report its annual results on Friday.

Richard Hunter, head of markets at Interactive Investor, said that coronavirus vaccine developments had boosted the outlook for the economy and banks.

"Should the rollout of the vaccine lead to a quicker than expected economic recovery, it could even result in provisions for bad debts being significantly lower than the ones the banks announced last year."

But he warned: "Headwinds remain for the sector in light of historically low interest rates, which put severe downward pressure on margins."

Feb 17, 2021

News | Business | Mortgage Rates: Rates Rise as Demand Falls Further.

 cnbc.com

Mortgage demand falls further as rates rise at the fastest pace in months

Diana Olick

A real estate agent exits a home for sale in Lancaster, Ohio.

Another week of rising rates spurred homeowners and buyers to pull back from the mortgage market, and the trend is not expected to turn any time soon.

Total mortgage application volume fell 5.1% last week from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 2.98% from 2.96% for loans with a 20% down payment. That rate was 79 basis points higher the a year ago.

"Expectations of faster economic growth and inflation continue to push Treasury yields and mortgage rates higher. Since hitting a survey low in December, the 30-year fixed rate has slowly risen, and last week climbed to its highest level since November 2020," said Joel Kan, MBA's associate vice president of economic and industry forecasting. The association began its weekly survey in March 1990.

Applications to refinance a home loan, which are highly sensitive to weekly interest rate fluctuations, fell 5% from the previous week but were 51% higher than a year ago. That annual comparison, however, was twice as large just a few weeks ago, before rates rose. The refinance share of mortgage activity decreased to 69.3 percent of total applications from 70.2 percent the previous week.

Mortgage applications to purchase a home fell 6% for the week and were 15% higher than a year earlier. Purchase volume is falling less because of higher rates and more because of the record low inventory of homes for sale.

Prices are also rising at the fastest rate in over six years. The average purchase loan size hit another survey high at $412,200, partly due to higher home prices but also due to a large drop in FHA loan applications. FHA mortgages, which offer a low down payment, are a favorite of first-time buyers at the entry level of the market. The inventory shortage is also most acute at the low end.

Mortgage rates continued their climb to start this week, loosely following the yield on the 10-year Treasury. On Tuesday, mortgage rates rose at their fastest pace in several months.

"At a certain point market momentum becomes its own justification and bond prices snowball to lower and lower levels," wrote Matthew Graham, chief operating officer at Mortgage News Daily. "When bond prices fall, rates rise."

News | Business: Ford Will Go All- Electric on 2030

bbc.com

Ford to go all-electric in Europe by 2030

BBC News

image copyrightGetty ImagesA Ford Explorer hybrid SUV

image captionA Ford Explorer hybrid SUV

Carmaker Ford has said its passenger vehicle line-up in Europe will be all-electric by 2030.

By the middle of 2026, all its cars will be available as electric or hybrid models, it added.

It joins a growing list of car brands cutting petrol and diesel production, including Jaguar and Bentley.

European regulators are clamping down on emissions, with countries including UK planning to ban the sale of new petrol and diesel motors.

Ford said it would spend $1bn (£720m) updating its factory in Cologne, with the aim of producing a mass-market electric vehicle by 2023.

"Our announcement today to transform our Cologne facility, the home of our operations in Germany for 90 years, is one of the most significant Ford has made in over a generation," said Stuart Rowley, president of Ford in Europe.

"It underlines our commitment to Europe and a modern future with electric vehicles at the heart of our strategy for growth."

Ford is the largest carmaker to make such an announcement in Europe, holding a 15% share of the regional market.

On Monday, Jaguar Land Rover said its cars would be all-electric by 2030, with its Jaguar brand electrified by 2025. GM and Volvo Cars have set similarly ambitious targets.

Tighter regulations

This year car makers in the EU will face hefty fines if they fail to meet emissions standards. The UK meanwhile has said it plans to ban the sale of new petrol and diesel cars from 2030, with France is targeting the same by 2040.

David Leggett, automotive analyst at GlobalData, said: "Automotive electrification is an expensive proposition for vehicle manufacturers, but they are nevertheless concluding that they must take the investment hit to be well-positioned competitively later this decade when the end for new internal combustion engine vehicle sales will be in sight in a number of markets."

On Tuesday it emerged that Coventry Airport could be the site for a gigafactory - a plant to manufacture electric car batteries.

The UK government previously announced £500m funding as part of a ten point plan to support the electrification of vehicles, including developing gigafactories across the UK.

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