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What to Watch: Metro Bank soars, RBS loss, and ECB meeting

Tom Belger
Finance and policy reporter
Metro Bank shares rose. Photo: Dinendra Haria / SOPA Images/Sipa USA

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Metro Bank shares soar on ‘buy-out rumours’

Shares in troubled Metro Bank (MTRO.L) have soared in early trading, despite it sliding to a loss in the third-quarter and warning it may have to cut back on its growth ambitions.

It was trading 9.2% higher shortly after 10am in London, with analysts reporting mounting speculation of a buy-out or takeover.

The bank, the first major national high street bank opening in over a century in 2010, lost £213m in deposit outflows in September as it struggles after an accounting scandal.

But its £2.2m overall loss reported late on Wednesday was lower than some had expected.

Neil Wilson, chief market analyst at Markets.com, said rumours were “doing the rounds” it could be taken private or even see a takeover.

RBS slides to loss as PPI bites

Royal Bank of Scotland (RBS.L) fell to a loss in the third quarter of the year, the bank said on Thursday, due to a surge in late PPI claims and a “deterioration” of conditions in global markets.

RBS made an operating loss of £8m in the third quarter and a loss attributable to shareholders of £315m. It compares to an attributable profit of £1.3bn in the second quarter.

RBS blamed a late surge in claims for payment protection insurance (PPI) compensation around the August deadline, which forced it to set aside an extra £900m in September to cover claims.

Its shares were down 2.2% in early trading in London.

Schroders takes over Woodford trust

Schroders has taken over a former Woodford fund. Photo: Philip Toscano/PA Images via Getty Images

Shares in Woodford Patient Capital Trust (WPCT.L) surged 25% on Thursday after the board said money management giant Schroders will take over from fallen stock picker Neil Woodford.

Schroders, which manages over £420bn, is expected to take over by the end of 2019. The trust will be renamed the Schroder UK Public Private Trust, abandoning the legacy of founder Neil Woodford.

Schroders will manage the fund “in line with the company's existing investment objective and policy,” the board said.

The appointment follows the sensational collapse of money manager Neil Woodford’s investment empire last week, as Yahoo Finance UK’s Oscar Williams-Grut writes.

ECB meets in Mario Draghi’s final outing

European Central Bank president faced a frustrating set of figures about the health of eurozone economies as he prepares for his final meeting of rate-setters on Thursday afternoon.

The headline figure on the flash eurozone purchasing managers’ index showed a sluggish growth rate of 50.2, only marginally above the 50 mark which would represent stagnation.

Overall employment growth across countries using the single currency hit its lowest level in almost five years in October, according to the widely watched figures from IHS Markit published on Thursday.

The figures suggest ECB stimulus measures announced last month have either not yet filtered through into wider economies, or have failed to hit home so far.

They also heap pressure on Draghi and his successor Christine Lagarde, amid growing disquiet among other rate-setters at Draghi’s fondness for aggressive stimulus and fears over unintended consequences of negative rates.

European markets higher

European stocks rose despite the gloomy PMI estimates, lifted by positive earnings from German carmaking titan Daimler and DASF.

Daimler said its Mercedes-Benz cars provided a huge boost to profits, up 8% in the third quarter.

The German DAX (^GDAXI) and Euro Stoxx 50 (^STOXX50E) and the French CAC 40 (^FCHI) all rose 0.4% on Thursday.

Britain’s FTSE 100 (^FTSE) rose higher, up 0.9% in early trading.

Asian stocks were mixed overnight, with the Hong Kong Hang Seng Index (^HSI) up 0.9% and Japan’s Nikkei (^N225) up 0.6% but China’s Shanghai Composite index (000001.SS) flat.

What to expect in the US

US stocks also looked set to rise on the open, with S&P500 futures (ES=F) and Dow Jones futures (YM=F) both up 0.1%, and Nasdaq futures (NQ=F) up 0.4% at 5.40am eastern time.