HSBC, P&G, Heineken: Business news in brief

Bank said to be cutting 100 senior staff around the world; Fairy-liquid maker reports sales increase; Brewer in discussions with Kirin to buy Brazilian business

Heineken said it’s in talks with Kirin Holdings over the Japanese brewer’s unprofitable Brazilian business

HSBC cutting around 100 senior banking jobs globally

HSBC has begun cutting around 100 senior jobs in its investment banking division worldwide this week, according to sources.

The cuts affect bankers at managing director and director level in the lender’s Global Banking and Markets division, the sources said, declining to be identified due to the sensitivity of the matter.

“We review on an annual basis performances across Global Banking & Markets and make appropriate changes to strengthen and grow the business,” a spokesman for the bank said in an emailed statement.

The cuts at HSBC follow those made by the lender’s Global Banking division in May as the business, led by former Goldman Sachs banker Matthew Westerman, looks to reduce costs.

Westerman, tipped by some insiders as a potential future HSBC chief executive, has made sweeping changes including cutting the jobs of dozens of senior bankers and restructuring the entire division.

Investment banks often trim jobs in January, as bosses review staff performance to decide how increasingly thin bonus pools should be allocated and which weaker performers they are prepared to let go.

Bankers in London, HSBC’s global headquarters, face uncertainty as the company seeks to anticipate the consequences of Britain’s exit from the EU.

HSBC chief executive Stuart Gulliver said on Wednesday the bank could relocate staff responsible for generating around a fifth of its UK-based trading revenue to Paris.

Reuters

Profits up at P&G

P&G, maker of Fairy liquid and Pampers nappies, reported better-than-expected quarterly sales and profit, helped by demand for its healthcare products.

Shares of the company, which raised its fiscal 2017 forecast for organic sales growth, were up 2 per cent before the bell on Friday.

P&G has been shedding unprofitable brands as it focuses on core brands, including Tide and Gillette, to boost sales. The company sold 41 of its brands last year, including Clairol and CoverGirl, to Coty for $12.5bn (£10.15bn).

Cincinnati-based P&G said its core earnings per share, which excludes restructuring charges and other items, was $1.08 (88p), in the last quarter.

Analysts expected a profit of $1.06 per share. Net income attributable to the company rose to $7.88bn (£6.39bn), or $2.88 per share, from $3.21bn, or $1.12 per share, a year earlier. The latest quarter included a gain from discontinued operations, including brands sold to Coty.

Net sales of $16.85bn came in ahead of Wall Street estimates of $16.77bn.

“Stronger top-line performance in the first half of the fiscal year is enabling us to increase our organic sales growth outlook for the full year,” chief executive David Taylor said in a statement.

P&G said it expects organic sales to grow 2 to 3 per cent, up from its previous forecast of around 2 per cent.

Reuters

Heineken in talks with Kirin to tackle Brazil

Heineken said it’s in talks with Kirin Holdings over the Japanese brewer’s unprofitable Brazilian business. A deal could create a stronger rival to market leader AB InBev.

Kirin is nearing an agreement to sell the maker of Schin beer to the Dutch company for about $870m (£787m), The Nikkei newspaper reported Friday, a price that would be less than a quarter of the $3.9bn it paid for the business in 2011. Tokyo-based Kirin confirmed the discussions but declined to comment on The Nikkei report.

Heineken is seeking to capitalise on an expected rebound in the world’s third-largest beer market, which has endured a tough few years due to a consumer slump and rising inflation. Combining Kirin’s 12 per cent share with Heineken’s 7 per cent would bring the Dutch company closer to AB InBev, which controls almost two-thirds of the market, according to Jefferies.

“We believe that there would be significant synergies from combining Heineken and Kirin’s business,” Jefferies analyst Edward Mundy said in a note. “Heineken ownership in Brazil would lead to a more rational pricing environment.”

Kirin has engaged in heavy discounting in the South American country, where it expects to post a record 9.5bn yen loss for 2016.

Heineken shares rose 0.8 per cent to €71 (£62) in Amsterdam on Friday.

Bloomberg

Fox Biscuits owner reveals offer received

Fox’s Biscuits could be about to be gobbled up after its owner, the food mogul Ranjit Boparan, disclosed that an offer has been received for the company.

The tycoon’s holding company, Boparan Holdings, said that it has received a preliminary approach for the brand, which trades as Northern Foods Grocery Group.

It added that any formal offer would value the biscuit brand “in the region of £350m”, but cautioned that there is “no certainty” that a transaction will proceed.

The name of the bidder was not disclosed. Mr Boparan’s 2 Sisters Food Group acquired Northern Foods, which also houses Goodfella’s Pizzas, for £342m in 2011.

Known as the “Chicken King” because of 2 Sisters’ stake in poultry, Mr Boparan has been heavily involved in deal-making over the past 12 months.

Last year he snapped up turkey meat producer Bernard Matthews from private equity group Rutland Partners in a pre-pack administration.

In a similar vein his restaurant arm, which houses Harry Ramsden’s fish and chip shop, snapped up Ed’s Easy Diner. The Giraffe chain is also a relatively new member of Boparan Restaurant Holdings, having been bought from Tesco for an undisclosed amount in June.

PA

London home presales slump to four-year low

Sales of London homes under construction last year dropped to the lowest level since 2012, leaving developers with a record number of unsold properties.

Purchases of homes currently being built fell 22 per cent to 20,700 from a year earlier, according to a report by Molior London. The number of unsold properties that are under construction surged 14 per cent to 25,139 units in the period, the highest since the researcher began collating data in 2009, the report shows.

London’s residential real estate market is being buffeted by headwinds ranging from near-record prices to higher sales taxes and uncertainty surrounding the terms of the UK’s exit from the EU. Home values in the British capital fell for eight consecutive months through November with central luxury properties declining the most, according to LSL Property Services and Acadata.

“Stubborn affordability issues still persist in London” and are affecting the wider market, said Faisal Durrani, head of research at broker Clutton. “The drop in the pound is something that international buyers are watching, but those investors focus on London’s most prime locations.” The pound has fallen about 17.4 per cent since the Brexit vote.

Bloomberg

BNP executive fired on US request gets £300,000 from bank

One of the 13 executives required to leave BNP Paribas SA as part of a 2014 settlement for violating US sanctions sued the bank for €6m euros (£5.2m) over his dismissal. He was awarded €360,000 (£311,000).

Dominique Remy, former head of structured finance for the French lender’s corporate and investment bank, told an employment tribunal in Paris that he had been unfairly dismissed in 2014. Remy’s bid to recoup a £780,000 bonus for 2013 and £1m in deferred compensation for previous years was rejected.

BNP agreed three years ago to plead guilty to US sanctions violations and pay almost $9bn after admitting it processed that same amount between 2004 to 2012 in banned transactions involving Sudan, Iran and Cuba. As part of the settlement, New York’s top banking regulator said it required the bank to refrain from employing people including Remy and Georges Chodron de Courcel.

Bloomberg