For those of us with a fascination for all things financial, it will seem like Christmas has come early this week. The veritable cornucopia of delights includes MPs questioning regulators, the results of a competition inquiry into retail banking, and a British Bankers’ Association conference.
Expect a tetchy session on Tuesday when the Treasury committee questions Andrew Bailey, the Bank of England’s chief regulator, about the watering-down of post-crisis rules. Andrew Tyrie, the committee’s chairman, has already said he is disappointed that the burden of proof has been removed from bosses whose banks fail. The next day, John Griffith-Jones, chairman of the Financial Conduct Authority, will no doubt face questions about the ousting of Martin Wheatley as chief executiveand the whereabouts of the long-delayed report into HBOS’s near-collapse.
On Thursday the Competition and Markets Authority reports on the state of retail banking and the BBA holds its shindig in London. Speakers include Sir Hector Sants, the former chief executive of the Financial Services Authority. He says people should be “very afraid” of the regulator but Wheatley’s sacking from the FCA shows the political mood has shifted. Barclays, where Sants briefly headed a push to get on better with regulators, is close to hiring a US investment banker as its boss. What, if anything, does Sants make of it all?
One last cup of coffee
So it’s goodbye, Andy Harrison. The chief executive of Whitbread, the parent of Costa and Premier Inn, will present his final set of results on Tuesday. After running three big companies, Harrison is worn out and fancies a less stressful time.
Fair enough, but Harrison probably knows that keeping things going at the same rate will not be easy. In his five years running Whitbread its market value has risen from £2.5bn to £8.4bn. He’s been well rewarded, receiving more than £11m in the last two years.
Yet Whitbread’s market value is more than £1bn less than the £9.7bn when Harrison announced his departure in April with the shares near a record. The wider market is down too, but now there’s George Osborne’s “national living wage” to deal with.
Waiting to take over in December is Alison Brittain, who joined last month from Lloyds Banking Group. It remains to be seen how many more flat whites and Americanos Brittain can persuade us to consume and whether China, where Costa wants to have 900 shops by 2020, develops a similar caffeine habit. But for now it’s time to enjoy Harrison’s relentless sales pitch one more time.
An each-way bet
Britain’s two best-known bookmakers publish trading statements this week at a time when the sector in a state of flux. Kicking things off is Ladbrokes on Tuesday. Long the wheezing old nag of the sector, Ladbrokes got quite exciting when it announced plans to merge with Gala Coral, its unlisted rival.
Next day it’s thoroughbred William Hill, which mastered the online game earlier than its mainstream opponents. At first glance, Ladbrokes’ deal with Gala Coral will make it Britain’s biggest bookie, with more branches than William Hill. The merger also promises to add Gala Coral’s superior online operation to Ladbrokes’ struggling one.
But the deal faces a long competition inquiry that is likely to lead to lots of shops being sold off. The merger is unlikely to be complete until July next year. There is also a lingering question over Andy Hornby, the former HBOS chief executive who is Gala Coral’s chief operating officer. Hornby, who is likely to be criticised whenever the official report into HBOS’s near implosion appears, is not lined up to sit on the combined group’s main board – for now at least.
Analysts expect both groups to have suffered poor racing results. In the long term, it’s far from clear that the Ladbrokes-Gala Coral combo will be able to outrace William Hill.
