Challengers return
More IPOs?
Much needed competition in retail banking has been relatively slow to emerge despite the best efforts of regulators. But so-called 'challenger banks' are belatedly gaining strength, illustrated by strong recent results, and this look set to prompt a further round of UK listings. Next cab off the rank is rumoured to be Aldermore, which pulled a proposed float last Autumn as market volatility gave its board cold feet. Annual results published this week showed underlying profits more than doubling to £56m, net loans to customers up 42 per cent, mortgage lending up by more than a half and business loans to small and medium-sized enterprises up by 32 per cent. Deposits across consumers and business totalled £5.5bn at the year end, setting the scene for a float in the coming weeks from a position of strength.
Cold Cuts
Price wars go on
Does it make sense to continue cutting even when you can see the bone? If you are supermarket Morrison, the answer would appear to be yes. The UK grocer is embroiled in a drastic race to the bottom on pricing in an attempt to maintain its share of the UK's shopping basket and this week announced cuts to prices on another 100 products with some prices more than halving and the average price cut an eye watering 22 per cent. Morrison is caught between the discounters snapping at its ankles and bigger rivals Tesco and Asda flexing their pricing muscles in the mid-market tier. Tesco's fortunes have picked up in recent weeks as it appears to have stemmed the haemorrhaging of its customer base. This week Tesco picked up the pace of its corporate renewal with the appointment of Barratt Developments chairman John Allan as its chairman.
Energy warning
Unsustainable path
Global emissions are on an unsustainable path with the global economy not doing enough to wean itself off fossil fuels. That is the view of one of the major players in fossil fuels, BP, in its latest Energy Review which looks at trends in consumption and output over the coming two decades out to 2035. Although renewable energy sources will grow much faster than traditional sources of energy, at 6 per cent a year against total energy production growth of 1.4 per cent a year out to 2035, BP still estimates that total carbon emissions from energy consumption will rise by 25 per cent over the period, but the rate of annual growth will slow. Fossil fuels in aggregate will still account for 81 per cent of all energy production by 2035, down from 86 per cent in 2013.
Greek tragedy?
Talks go on
Only in the eurozone could 'last chance' talks break down and further 'last chance' talks be scheduled. Greece and its eurozone paymasters ended a meeting on Monday evening with the two sides no nearer an agreement which would give Greece breathing space on debt repayments. But, on Wednesday, news emerged that Greece is willing to accept an extension to its bailout as long as some of the terms therein are tweaked, making it look increasingly likely that yet another compromise will be reached thus kicking the can a few months down the road once again.
Big bills
Big six fingered
It appears that being a loyal customer does you no favours in the world of energy bills. The Competition and Markets Authority published its interim findings of a major investigation into the UK's energy supply market this week and concluded that loyal customers of the 'Big Six' UK energy suppliers have been hit the hardest in recent years with some paying between £158 and £234 a year more than they need to by sticking with standard tariffs rather than switching to cheaper deals. Consumer inertia remains rife with between 40 and 50 per cent of customers having been with the same supplier for more than 10 years.
Rising sun?
Japan exits recession
Is Abenomics finally gaining some traction? The latest GDP figures for Japan, with annualised growth of 2.2 per cent for the final quarter of the year, saw the country emerge from recession, but growth was slower than most analysts had forecast. It marked a rebound in domestic household consumption from a slump in the middle of 2014 caused by a hike in sales taxes. A weaker yen, exacerbated by prime minister Shinzo Abe's monetary easing policies, helped exports rise 2.7 per cent in the final quarter. But forecasts of anaemic growth for 2015 mean further monetary easing is expected in the Spring.
