BUSINESS LIVE: HSBC boss Quin to retire; Whitbread walks divi; Banco Metro deposits grow

BHP shareholders yesterday urged the mining giant to increase its bid for Anglo American in another takeover battle affecting the City.

The Australian company is working on a revised offer after its mining rival last week rejected a £31bn approach.

Matt Britzman, equity analyst at Hargreaves Lansdown:

‘HSBC has put a stop to the process. The news that chief executive Noel Quin plans to retire came as a surprise. Changes at the top usually cause a wobble, even more so when they are unexpected, and this raises some questions about how the strategy will evolve from here.

‘HSBC’s portfolio is undergoing a reorganization and Quin is far from completing its mission to control costs.

‘He took the reins just as the pandemic was spreading around the world, a hugely uncertain time to lead a global bank and move away from its more traditional markets.

‘It has also had to navigate geopolitical tensions between the United States and China, political unrest in Hong Kong and many challenges from shareholders. He may be difficult to follow, but the market reaction suggests that the strong position he leaves behind is enough to calm any uncertainty about who will lead the business from now on.

‘As for the results, as always, there was a lot to analyze. The Canadian sale has been completed, meaning the special dividend will be released as expected. HSBC is pressing ahead with plans to divest the business in Argentina and has taken a $1.1 billion hit in the process of reclassifying it for the purposes of its account. This is all part of the ongoing strategy to move away from non-core areas and focus more on Asia, which is where investors see the most potential.

‘If you remove some of the extraordinary items, the underlying performance was better than expected. As we have seen across the banking sector, impairment charges were lower than analysts had predicted.

‘This is particularly good news for HSBC, whose exposure to China has caused some problems in recent quarters. “The lack of significant write-downs or impairments related to Chinese commercial real estate is welcome.”

Metro Bank posted a 4 percent increase in total deposits during the first quarter, thanks to a campaign it launched late last year to offset significant customer withdrawals amid reports about their financial health.

The British lender reached a £925 million rescue deal in October in the wake of trading volatility and has since implemented cost cuts to clean up its balance sheet.

Total deposits rose to £16.21 billion in the three months to March 31, from £15.62 billion in the previous quarter.

Metro, launched to challenge the dominance of Britain’s big banks, said its lending activity was down 4 percent as it shifts its focus to higher-margin specialist mortgages and commercial lending.

“The significant levels of liquidity achieved in the fourth quarter of 2023 now allow the group to focus on low-cost relational deposits to manage the cost of financing,” the company said in a statement.

The core deposit franchise based on underlying services increased by more than 50,000 personal and business checking accounts in the quarter.

“We remain confident that financial results will continue to improve throughout 2024 as we optimize financing, achieve cost savings, continue our asset rotation and benefit from lower-yielding fixed-rate mortgage and treasury maturities,” he said. Chief Daniel Frumkin.

Tesla shares rose yesterday as Elon Musk moved a step closer to launching self-driving cars in China.

In a much-needed boost, the electric vehicle maker’s billionaire boss has struck a sailing deal with Chinese tech company Baidu.

Premier Inn owner Whitbread increased its final dividend by 26 per cent to 62.9p after posting a 36 per cent rise in annual profits, boosted by strong bookings from its UK hotel chains.

Premier Inn UK made a record adjusted pre-tax profit with a 15.5 per cent return on capital employed, Whitbread said, and “continues to outperform the UK economy and mid-scale market”.

Whitbread has also announced plans to launch a £150m share buyback.

Chief executive Dominic Paul said:

‘We have delivered an outstanding set of results in FY24, led by the strength of our UK hospitality business.

‘Our increased levels of profitability, operating cash flow and return on capital reflect the power of our unique operating model.

“Our balance sheet backed by freehold rights, together with our strategy to continue investing, allows us to take advantage of the significant structural growth opportunity that exists following the decline in hotel supply in the UK.”

Vinted has made its first annual profit by cashing in on young shoppers shunning fast fashion.

The Lithuanian startup, Europe’s largest old clothes buying and selling website, made £15.4m last year after a £17m loss in 2022.

Sales rose 61 per cent to £509m after it launched a service to verify high-end brands. The business was also boosted by expansion into Denmark and Finland last year and the acquisition of design program Rebelle.

HSBC Chief Executive Noel Quinn will step down after five years of transformation, the lender said on Tuesday, posting a pre-tax profit of $12.7 billion for the first three months of 2024, which beat forecasts.

Quinn oversaw a broad series of asset sales around the world during his tenure, eliminating or downsizing underperforming businesses, including the lender’s retail banking businesses in the United States and France, its entire Canadian subsidiary and units in markets smaller like Argentina.

HSBC shares, which have gained about 30 percent during his tenure, rose about 1.3 percent and hit a nine-month high in the afternoon session in Hong Kong.

Quinn will remain chief executive until his successor takes over and has agreed to remain available until the end of his 12-month notice period expiring on April 30, 2025, to support the transition.

“I’ve been in intensive leadership roles since taking a position at a commercial bank in October 2008, so I’m personally ready for a change,” Quinn told reporters on a conference call.

‘It is also a natural turning point for the bank as it comes to the end of the current transformation phase. “This is an ideal time to bring in leadership that will move the bank forward over the next five years.”

HSBC Chairman Mark Tucker said the bank aimed to complete Quinn’s succession process in the second half of this year.