LONDON (ShareCast) - One of Brazils biggest banks is plotting a bid for the prized American business of Royal Bank of Scotland. Itau Unibanco is eyeing a move for Citizens, the Rhode Island-based retail bank built up through a series of acquisitions by Fred Goodwin, the former RBS chief executive. Citizens has more than 1,500 branches spread across 12 states. A clutch of potential bidders for the business is circling amid increased expectations that RBS will sell it for an estimated 10bn pounds. Itau has become one of the worlds most powerful financial institutions on the back of rapid growth in the Brazilian economy. It has a market value of about 45bn pounds. It is keen to buy a deposit-taking bank in America to diversify its funding base and grow its reputation internationally. Citizens is said to be one of three big American lenders on Itaus hit list, along with Sovereign Bancorp, owned by Spains Santander, and Bank West, owned by Société Générale, according to The Sunday Times.
Invesco, an American fund manager with a big presence in Britain, has tabled a proposal to buy JJB Sports outstanding debt from Lloyds Banking Group. The scheme, discussed at a company board meeting last week, would place Invesco in a powerful position in the battle over the future of JJB, which has been fighting for survival after a slump in sales and a string of profit warnings. The company, which has 180 stores and 4,000 staff, is currently controlled by a small group of shareholders, including the Bill and Melinda Gates Foundation, which owns 5%. Invesco owns half the shares, but has become frustrated by the slow progress in turning the company round. It thinks owning JJBs loans will allow it to force through a dramatic restructuring, The Sunday Times reports.
Bankers at a number of London institutions are looking at Marks & Spencer as a potential £6bn bid target as the retailers shares have slipped almost 50% since their highs. Bankers at a number of London institutions are looking at Marks & Spencer as a potential £6bn bid target as the retailers shares have slipped almost 50% since highs in late 2007. The Sunday Telegraph understands that bankers at institutions thought to include Bank of America Merrill Lynch have in recent weeks assessed the possibility of providing debt finance for a speculative bid. Although it is understood neither bank has been mandated to pursue a specific course of action, the fact that they are looking at the retailer indicates the companys predicament. Marc Bolland, M&Ss chief executive, has been criticised amid falling sales, particularly in womens wear, and problems in the companys supply chain.
Investors in InterContinental Hotels, which is reeling from a price-fixing investigation, hope for better news this week with City analysts betting they may be on track for a $1.5bn (£960m) bonus. That is the amount they could get via extra dividend payments and share buybacks, a move that might also keep activist investor Nelson Peltz happy. The US fund manager recently took a 4.27% stake in IHG. One source of cash is the sale of the flagship New York Barclay hotel, progess on which is expected at the group's half-year results on Tuesday. Last week, the Office of Fair Trading found Holiday Inn-owner IHG had colluded with Booking.com and Expedia to limit discounts. The firms said they did nothing wrong and will challenge the findings, The Independent on Sunday writes.
Benny Higgins, chief executive of Tesco Bank, has revealed that he plans to use data from the supermarkets Clubcard loyalty scheme to rate its customers. More than 15m British households are signed up to the Clubcard scheme, making it the most comprehensive database on the countrys spending habits.Tesco Bank, which revealed this weekend that it will start selling mortgages tomorrow, is planning to use data culled from grocery bills to judge whether or not to grant a loan. Higgins believes that by tapping into the Clubcard customer base, Tesco Bank could grow to be bigger than HSBCs British business. One of the things that lies at the heart of what we are as a business is about applying the Tesco DNA to banking, said Higgins. Its about simplicity, about transparency, about rewarding loyalty. The Clubcard relationship lies at the heart of that, The Sunday Times says.
A key shareholder in Xstrata will demand that commodity trader Glencore raises its offer for the FTSE 100 miner despite the company reporting its interim profits have halved this week. The City expects Xstrata to report a slump in earnings over the first six months of the year on Tuesday, as commodity prices have tumbled in the weakening global economic environment. Xstrata will report that profits for the half dropped 50% to $1.4bn (£900m), according to the Citys consensus estimates. In contrast Glencore, whose trading activities mean it can profit from commodity price swings, is expected to report later in the month that its own earnings suffered a less steep fall of 37%, to $1.5bn, according to analysts at Liberum Capital. Nonetheless Qatar Holding, Xstratas second-biggest shareholder after Glencore, will remain firm in its insistence that Glencore must raise its offer from the 2.8 shares on the table for each Xstrata share, handing the miners investors more of the combined company.
The Bank of England will this week join the ranks of forecasters who have cut their outlook for the British economy, with many analysts expecting the Bank to predict zero growth for 2012. The shock 0.7% collapse of gross domestic product in the second quarter, coming after a 0.3% decline in the first quarter and mounting fears about performance in the current quarter, seem sure to force the Bank to abandon its existing forecasts, published in May. The Bank then was looking for 0.5% growth this year and 2.1% next year. Now it is thought that the 2012 forecast will be close to no growth, with the 2013 estimate cut back to about 1.6%. The May figures did not always appear so over-optimistic, said Ross Walker, economist at Royal Bank of Scotland. But the Bank seems to have had a tendency over time to assume official growth numbers will always be revised up, and this has not been the case recently. The new growth figures will come in the Banks quarterly inflation report, to be published on Wednesday, writes The Financial Mail on Sunday.
Tesco Bank chief Benny Higgins has said he will launch the supermarkets long-awaited current account product next year once the Government has followed through its reforms to the banking sector. Higgins said the trigger for launching the accounts would be the introduction of new regulations to make it easier for customers to switch bank accounts. The easier switching plans were recommended by the Independent Commission on Banking and are expected to be implemented in 12 months. The market for current accounts is not truly competitive, he said. Only three per cent of bank customers switch every year. The figure is not low because customers do not want to switch, but because the process is too messy and stressful. A new current account redirection service will be launched in September next year with the aim of providing customers with a seamless switching service and compensation for customers if banks fail to meet the new rules, says The Financial Mail on Sunday.
The finance director of HMV is poised to leave the troubled entertainment retailer just days after its chief executive Simon Fox quit. Ahead of the group posting an annual loss, David Wolffe, who joined HMV from ITV Studios in January 2011, is heading for the exit. The executive search firm Russell Reynolds is understood to have been hunting for Mr Wolffe's replacement and an announcement is expected shortly, according to several City sources. The troubled retailer said last Thursday that Mr Fox was departing after a rollercoaster six years that saw the share price collapse from 160p to 3.4p, giving HMV a market capitalisation of just £14.3m. Trevor Moore, the former chief executive of the camera chain Jessops, will lead the retailer from next month, The Independent on Sunday reports.