LSBF Blog - Global Matters

BNP Paribas to pay record $8.9 billion fine

French bank BNP Paribas has been fined $8.9 billion after it admitted helping clients to breach global sanctions.

French banking giant BNP Paribas has agreed a huge settlement that will see it pay a record $8.9 billion (£5.2 billion) fine, after it admitted helping clients to violate economic sanctions.

The bank has acknowledged widespread wrongdoing which saw the bank disguising transactions for clients in Sudan, Iran and Cuba, even though those countries are subject to sanctions. Prosecutors said that executives in some of the most senior levels of the bank had been aware of the practice, but it continued from 2004 to as late as 2012.

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UK businesses told to adjust to flexible working hours

July 02 ,2014 | by Sarah Parkin

Every employee in the UK now has the right to request flexible working, and staff and businesses alike are having to adapt.

As workforce demographics change and technology makes it easier to work in different ways, more and more employers have allowed some level of flexibility for their staff.

But on 30 June, the right to formally request flexible working was extended to every employee in the UK, instead of just those with caring responsibilities. That means 20 million more people can now ask for the opportunity to work flexibly, and their request must be considered in a “reasonable” manner. Only one request can be made in any 12-month period.

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Africa firm on its way to meet economic promise

July 02 ,2014 | by Hari Sri

Africa is only just beginning to fulfil its economic potential as its economies show signs of strong growth.

When Nigeria rebased its economy in April it became the 26th largest economy in the world. Last month Kenya raised $2 billion (£1.18 billion) from institutional investors in its first offering on the sovereign bond market. Angola has even offered financial aid to Portugal as the European country struggles with its debts.

The past year has seen Africa truly arrive on the global economic stage.

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Barclays faces charges for alleged “dark pool” fraud

Barclays will be subject to a fraud lawsuit filed by the New York attorney general.

New York’s attorney general has filed a lawsuit against Barclays over alleged fraud related to “dark pool” operations – where clients trade big blocks of shares while keeping prices private.

According to a statement from Eric Schneiderman’s office, Barclays is accused of boosting its dark pool’s market share by making false claims about its operations. Rather than safeguarding clients from “aggressive” high-speed traders as it has claimed, the bank allegedly ran its dark pool so that it favoured them. The rest of the charges also look very serious.

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Global M&A deals hit 7-year peak

July 01 ,2014 | by Sarah Parkin

Mergers and acquisitions deals volumes at a global level are at a seven-year peak.

Appetite for striking huge corporate deals is returning, as it has emerged that international mergers and acquisitions (M&A) deals are at their highest level for seven years.

The value of M&A deals around the world in the first half of 2014 stood at $1.75 trillion – an impressive 75 per cent increase on the same period last year, and the highest level in seven years. Yet the actual number of deals actually fell slightly, indicating a rise in the prices being set on target companies.

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From the world of business: June 2014 highlights

July 01 ,2014 | by Thiago Kiwi

Here’s our guide to all the major business news from June.

Welcome to our business news round-up for June 2014. In this round-up of the most important business news stories from around the world, we point you to some of the biggest news stories that have had people talking during the past month.

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India’s startup leaders turn into angel investors

July 01 ,2014 | by Hari Sri

An increasing number of entrepreneurs in India are acting as angel investors for new companies.

India’s recent emergence as a major economic power has been accompanied by the success of a number of exciting startups that are now worth billions. But the entrepreneurs behind these firms are now using their success to give a boost to younger businesses and talent.

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Every FTSE 100 board now includes a woman after Glencore appointment

June 30 ,2014 | by Sarah Parkin

Topic: News

Glencore has become the last FTSE 100 company to finally add a woman to its board.

Patrice Merrin’s appointment to the board of Glencore Plc may not have meant much on its own, but in the wider context of the struggle to improve female representation in the business world, it marks a watershed moment.

On 26 June, the mining company finally bowed to years of pressure when it appointed Ms Merrin, who becomes the first woman to sit on the company’s board. In doing so, it brought in a new era in which every single company in the FTSE 100 now has at least one woman at the top.

It says something about how far the campaign for female representation has come that Glencore had acquired a bad reputation for its male-dominated management structure.

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London Stock Exchange confirms $2.7 billion Russell Investments deal

Russell Investments is about to be acquired by the London Stock Exchange for $2.7 billion.

The London Stock Exchange Group has finally agreed to acquire Russell Investments in a huge $2.7 billion (£1.59 billion) deal, subject to shareholder and regulatory approval.

On 26 June, the exchange said it was planning to carry out the major deal with assistance from a $1.6 billion rights issue as part of a plan to break into the huge US capital markets, taking over Russell from life insurer Northwestern Mutual.

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UK consumer morale hits nine-year high

June 30 ,2014 | by Sarah Parkin

Morale among UK consumers is at a new record high, according to a GfK poll.

Consumer morale in the UK is at its highest level in nine years, a new poll from research company GfK has found.

Its monthly consumer confidence index rose to +1 in June, up from zero in in the previous month and the highest rate since March 2005. A Reuters poll forecast suggested the figure could have been as high as +2, but the figures continue an upward trend that points towards growing confidence in the UK economy.

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Relationships between businesses key to success, says report

Businesses need to form relationships effectively if they are to succeed, according to a new report.

Strong links between organisations have often been seen as an important element of successful partnerships. But according to a new report, effective relationships between individuals within companies are a vital element of success in modern business.

The Tomorrow’s Relationships report has been compiled by business thinktank Tomorrow’s Company in partnership with KPMG, Linklaters, the Chartered Institute of Management Accountants and Chartered Institute of Professional Development (CIPD).

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Business magnate Warren Buffett ‘not buying Coca-Cola’

June 26 ,2014 | by Hari Sri

A brief flurry of concern emerged when rumours suggested that Warren Buffett could buy out Coca-Cola, but he claims not to be interested.

Warren Buffett has an established reputation as a major investor, and he isn’t new to going after large targets. But when Coca-Cola shareholder David Winters said last week that he was concerned Mr Buffett would mount a takeover bid for the giant company, more than a few eyebrows were raised among analysts.

The rumours emerged last week when Mr Winters told Fox Business Network that he suspected Mr Buffett, whose investment company Berkshire Hathaway owns nine per cent of the drinks giant, and 3G Capital might work together to take Coca-Cola private. He added that he had written a letter to the board warning them off such a move, reminding them that they have a “duty to all shareholders”.

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Climate change could cost US businesses billions every year

June 26 ,2014 | by Hari Sri

A new report has set out the potential negative business consequences of climate change in the US.

Climate change has been a difficult issue for many businesses, caught between a dependence on fossil fuels and the demand for more sustainable ways of operating. A new report compiled by political and business figures from the US has highlighted the potential cost to companies of failing to take action.

The bipartisan Risky Business report uses what it describes as a “standard risk-assessment approach” to identify the potential consequences of inaction on key areas. It focuses on damage to coastal areas from increased storm surge and rising sea levels, changes to agricultural production that will come from an altered climate, and how higher temperatures will affect public health and the productivity of the US workforce.

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50,000 customer strong Islamic Bank of Britain seeks to expand its business

June 25 ,2014 | by Hari Sri

With a new chief executive and profit in mind, Islamic Bank of Britain is looking to expand its products and services to attract new customers.

Islamic Bank of Britain (IBB) is the only sharia-compliant retail bank in the UK, and with over 50,000 customers, it has enjoyed a level of success. But with a new chief executive on board, it is seeking to broaden its target audience by expanding the products and services it is owed.

Sultan Choudhury, who was announced as the new chief executive on 23 June, told Reuters that the bank is planning to grow its commercial property business as part of a plan to increase its profitability.

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England’s World Cup exit: How does it affect businesses?

An early World Cup exit can spell trouble for a country’s businesses.

There may be three lions on the shirt, but England fans are certainly not roaring. Uruguay and Italy left the national team outclassed and Roy Hodgson’s squad will not be making it out of the group stages. The dull draw with Costa Rica on 24 June was the last chance English fans will get for at least two years to wave their St. George flags at a major international football tournament.

But the disappointment will not only be felt among the fans – businesses around the world are likely to notice the difference too.

Companies will feel the loss in different ways. For example, if less well-known teams make it into the later stages of the tournament, there’s a risk that some viewers will lose interest and not bother tuning in – and that could mean that advertisers who paid a premium for prime slots may not see the return on investment they expected.

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Green Investment Bank to raise £1 billion for offshore wind farms

The Green Investment Bank plans to launch £1 billion to encourage private investors to support UK offshore wind farms.

The UK’s state-funded Green Investment Bank (GIB) has said that it plans to raise £1 billion for a fund that will encourage private investors to back offshore wind farms around the UK.

GIB says that it is looking for strategic investors to work with on a long-term basis to participate in the capital raising exercise, with the proceeds being used to purchase stakes in a number of operational offshore wind projects. The new fund will be managed by a subsidiary of GIB that will seek permission from the Financial Conduct Authority to be considered a regulated fund manager.

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Sainsbury’s takes on discount supermarkets by bringing Netto back

June 24 ,2014 | by Hari Sri

Sainsbury’s is entering the discount grocery market in a joint venture with Danish brand Netto.

Sainsbury’s has been attracting criticism recently for not doing enough to protect its market share from the rising tide of the discount supermarkets. Under pressure from Waitrose at the top end of the market and being squeezed by discount brands at the bottom, sales have been suffering in recent months.

As part of a plan to secure its place, the supermarket is stepping into Aldi and Lidl’s territory – by teaming up with Danish discounter Netto.

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CBI study highlights language skill shortage in Britain

June 24 ,2014 | by Hari Sri

A serious lack of language skills could hinder businesses’ growth intentions, according to the Confederation of British Industry.

Businesses are looking to break into new and high-potential markets around the world, but a new study suggeststhat they may be held back by a shortage of talent with the right language skills.

The latest Education and Skills Survey from the Confederation of British Industry (CBI) and Pearson shows that nearly two out of three businesses that responded said there was a need for foreign language skills within their organisation.

Although the full details of the study have not been published yet, CBI says that figure could well grow as firms become more interested in exports, especially given the government’s recent moves to rebalance the economy in favour of international trade.

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General Electric looks set to win prized Alstom energy deal

The bidding war for Alstom’s energy assets appears to be over, and General Electric is the winner.

The long-running bidding war to take control of French industrial giant Alstom’s energy assets has ended – and General Electric (GE) is the winner.

On 22 June, BBC News reported that Alstom’s board had voted unanimously to accept an offer from the US firm worth as much as $16.8 billion (£9.9 billion). Although it still needs to be approved by both Alstom’s employee representatives and regulatory bodies, it certainly looks as though the bid will go through.

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Lloyds sells bigger stake in ‘oversubscribed’ TSB IPO

June 23 ,2014 | by Hari Sri

Lloyds has had to sell more of its stake in TSB than anticipated in a highly successful IPO.

Lloyds Banking Group has actually had to sell a bigger stake in TSB than it originally planned after a huge wave of interest for the bank’s initial public offering (IPO) in the London Stock Exchange.

The bank’s flotation was as many as 10 times oversubscribed, as institutional investors and members of the public all sought to secure a stake in one of the UK’s newest challenger banks. Overall, Lloyds has sold a stake of 35 per cent in the bank on 20 June – despite having intended to sell off a quarter of the company. After the success of this flotation, the next share sale could even take place as early as September.

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Alstom energy assets ignite heavyweight bidding war

A number of big companies are competing to take over French firm Alstom’s energy assets.

Alstom is one of France’s top industrial companies, so the idea of a foreign takeover was always going to be sensitive for both the government and large sections of the public. But as the fierce bidding war to acquire it has heated up, even president François Hollande has found himself getting more closely involved.

The French government is expected to decide on its preferred bidder at some point this weekend, and executives at the company have until Monday to decide between the competing bids of US firm General Electric (GE) and the joint bid of German giant Siemens and Japan’s Mitsubishi Heavy Industries.

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Finance, tech and creative industries set to drive London growth

The tech and creative industries will be crucial to London’s future growth, according to a new CBI report.

Businesses are optimistic about London’s growth prospects over the next five years, saying that the key industries to keep the city thriving will be technology, the creative industries and the city’s ever-popular professional services and finance sectors.

The latest London Business Survey from the Confederation of British Industry (CBI) shows that nearly seven out of ten firms said the technology and creative industries would be key to the continued economic growth of the capital in the next five years. Another 65 per cent said that professional services would be an important driver of growth, while 62 per cent said the same of the financial services industry.

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UK and China celebrate huge new trade deals worth over £14 billion

June 20 ,2014 | by Hari Sri

China and the UK have signed trade deals worth billions during the Chinese premier Li Keqiang’s visit to Britain.

The UK has been anxious to tap into China as a crucial export market in recent years, and trade between Britain and the world’s second-largest economy has been building on its existing strengths.

During the visit of Chinese premier Li Keqiang to the UK this week, the two nations have signed a succession of trade deals with a collective value of more than £14 billion.

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China growth slowdown is a sign of consolidation, not decline, says report

June 19 ,2014 | by Hari Sri

ICAEW has published a new report which shows that slowing economic growth in China represents a period of consolidation.

Growth in China may be slowing down but it is “not something we should be too worried about”, according to a new report from the Institute of Chartered Accountants of England and Wales (ICAEW).

Economic Insights: Greater China was produced for the organisation by the Centre for Economics and Business Research (CEBR), and finds that this year could be the first in which China officially misses its headline economic growth target. However, the gap will still be fairly small.

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YouTube confirms launch of paid music service

June 19 ,2014 | by Hari Sri

YouTube is launching a paid music service in a move designed to challenge companies like Spotify.

YouTube has become hugely influential in the music industry, with growing numbers of hit songs from artists who established a fanbase through the video streaming site. But now, Reuters reports that the firm has finally confirmed that it will be launching its own paid music service to rival firms such as Spotify and Pandora.

The Google-owned company has announced that it is partnering with “hundreds of major and independent” labels, to put together the streaming service.

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