GOLDMAN CASH STAGNATES AS ASSET PRICES RISE
Goldman Sachs’ attempt to spend some of its $170bn (£106bn) excess capital on loans, real estate and other distressed assets is being hampered by a prolonged rebound in risk appetite that has lifted prices on many would-be bargains. Goldman’s “excess liquidity”, or cash deposits and securities the bank could sell or pledge, has helped lift capital ratios since the financial crisis while weighing down its returns. Undaunted, Goldman executives have said they would continue to prioritise these deals above accelerating stock buy-back plans or raising dividends.
DELAYS HIT NISSAN’S ELECTRIC LEAF CAR IN US
Nissan has admitted to delays in delivering its new Leaf model to customers in the US, the biggest market for the heavily hyped electric car. Although more than 20,000 people have joined a waiting list for the car, the Japanese carmaker delivered 19 to customers in December, when production began, and 87 last month.
OWEN-JONES ENDS ERA AS L’OREAL CHAIRMAN
Lindsay Owen-Jones, the British executive who transformed France’s L’Oreal from a shampoo and soaps group to global cosmetics champion, is stepping down as chairman, leaving chief executive Jean-Paul Agon to take the leadership.
TOSHIBA UPBEAT ON NUCLEAR DEAL
Toshiba, the Japanese electronics and engineering group, says it is confident that it will seal a deal to build a nuclear power plant on Turkey’s Black Seat coast, after talks between the Turkish governbment and south Korean reactor builders broke down last year. A deal now hinges on long-term risk insurance from Japan.
INSURERS BALK AT SOARING LEVY FOR “LIFEBOAT” SCHEME
A compensation scheme for investors in financial businesses is facing fresh criticism after insurance brokers complained that their annual levy had risen by about 50 per cent. The Financial Services Compensation Scheme, set up a decade ago to cover customers’ losses when a financial institution collapsed, has faced a surge of claims relating to missold payment protection insurance.
BANKS FACE THREAT OF HEAVY LOSSES FROM RISKY LOANS
Commercial property owners and developers are in breach of covenants on four out of every five loans, with £194bn at risk, according to an unpublished report for the Bank of England. Lenders with £243bn outstanding to commercial property companies are still heavily exposed.
The Daily Telegraph
INVESCO’S NEIL WOODFORD SELLS MORE UTILITY COMPANY SHARES
Britain’s biggest utility investor has dumped his £250m stake in Northumbrian Water, bringing his total recent disposals in the “over-regulated” water sector to almost £700m.
Neil Woodford, the manager of Invesco Perpetual, had already sold sizeable stakes in Severn Trent and United Utilities, complaining that regulations mean investors cannot make adequate returns. This means that he has only retained his 12 per cent holding in Pennon, which has a thriving waste business as well as owning South West Water.
KROLL BOND RATINGS BUSINESS TO EXPAND INTO EUROPE
Jules Kroll's new American bond ratings business is investigating opportunities in Europe and Asia in a bid to become a global rating agency.
THE WALL STREET JOURNAL
NOKIA CEO CONSIDERS BIG SHAKE-UP
Several senior Nokia officials serving on the company's group executive board are expected to leave soon as part of a major shake-up being considered by the Finnish phone giant’s new chief executive, according to a person familiar with the situation. Although Nokia remains the world’s largest mobile-phone maker, the company has lost market share in the lucrative market for smartphones, the industry’s sales and profit driver, to Apple’s iPhone and smartphones that run Google’s Android software.
Exactly who will leave is unclear.
KINDER MORGAN IS LATEST BUYOUT IPO
The highlight of the US IPO market this week will be another large private-equity-backed offering, this time from energy company Kinder Morgan.