ALL THE national newspapers have stories about some of Britain's premier financial houses which are ...
ALL THE national newspapers have stories about some of Britain's premier financial houses which are going through tough times or strategic reassessments: these include Rothschilds, Schroders and Britannic. Also in the headlines are HBOS and Citigroup.
THE FT reports that NM Rothschild has put its retail and institutional fund management operations up for sale as part of a wider shake-up that will see the group expand its private banking and wealth management activities under a single umbrella.
The privately held group's board decided Rothschild Asset Management's retail and institutional funds businesses - with assets of £13bn under management - lacked sufficient scale to compete.
"We are examining various options . . . that may include an alliance with a larger investment management group," Rothschild said. The group said it could consider a sale or merger of the operations with, for example, a large bank or insurance company.
WHILE SCHRODERS, the investment group, has warned that there would more job losses and that restructuring costs would continue to batter profits in the second half of 2002, says the FT.
The shares fell 45p to 471p as it reported that pre-tax profits halved to £20.5m in the six months to June 30.
High fixed costs continue to knock revenues and cost- cutting remains the priority of a new management team headed by Michael Dobson, chief executive, who was brought in last November.
On this story, the Times that through enhanced use of technology and the outsourcing of administrative functions, Schroders hopes to be able to operate as efficiently as any in its peer group.
It is costing Schroders money in the short term to save money in the long term and this is depressing profitability at present, says the newspaper.
But the group reports that the underlying trend is already positive and suggests that more tangible benefits could flow through in 2003 and beyond.
BRITANNIC HAS some bad news to deliver. The FT says the insurer will cut 200 jobs in an overhaul of its life assurance arm as the company reported a sharp fall in first-half profits.
Britannic, which failed to find a buyer when it put itself up for sale, reported operating profits down from £80m to £52m, reflecting depressed equity markets and the closure of its door-to-door sales business last year.
The group, which has been without a chief executive since January, promoted finance director Bryan Portman to become group managing director. Harold Cottam will remain executive chairman.
BAD NEWS for Citigroup as shares fell 10% as investors worried about the biggest US bank's susceptibility to legal, regulatory and credit risks, says the FT.
Citigroup's rout came on a bad day for financial stocks overall, with Merrill Lynch, Morgan Stanley, Lehman Brothers, JP Morgan Chase and Bear Stearns all falling more than 5 per cent.
However, Citigroup's fall was the steepest. The company lost about $17bn in market value and is now down more than 37% for the year.
THE TIMES reports the heavily weighted banking sector came under pressure yesterday as HSBC and Standard Chartered were rocked by plunging Asian markets, and HBOS and Barclays were hit by downgrades.
HBOS led the sector into the red after a savage downgrade from Merrill Lynch, which cut its recommendation to "neutral" from "buy", as part of the broker's review of the European banking sector.
Merrill said the company's potential return on investment was a measly 6.4 per cent based on its 760p target price. That compares with an average for UK banks of 12.5 per cent, and an average of 19 per cent for European banks. The broker also cited fears over the impact of the current state of the stock market on HBOS's substantial life insurance business in addition to concerns over the global economic slowdown on consumer confidence and desire for credit.
ACCORDING TO the Telegraph, more than four million women have paid £8 billion in National Insurance contributions and will get next to nothing in return, in what was yesterday described as "the biggest pension scandal ever".
About 80 MPs from all parties signed an early-day motion calling for an inquiry into bad advice given to these wives over the past half-century. But the Government denied that it may be liable to pay compensation in the same way as private sector providers were forced to after mis-selling personal pensions.
ALL THE newspapers have reported about the appoinment of Sir Andrew Large as deputy governor of the Bank of England.
The FT says the race for the governorship of the Bank of England was left open by this decision by Gordon Brown, the chancellor.
Sir Andrew, a former chairman of the Securities and Investments Board and, until Tuesday, deputy chairman of Barclays, is not himself in contention for the governorship, but will provide a mix of management skills and City expertise to complement the new governor, who will be chosen next year.
AND FINALLY, in Scotland John Wood Group, the Aberdeen-based oil services company, met expectations yesterday with its maiden results and said it was on the look-out for acquisitions, but still saw its shares fall on oil price weakness.
The company, which floated on the stock exchange in May, reported pre-tax profit for the six months to 30 June rose 32 per cent to US$50.9 million (£32.6 million). Revenue increased 14 per cent to $812.7 million (£520 million).
Strong oil prices in recent years have encouraged higher spending among Wood's clients, such as BP and Shell.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till