Yahoo Finance What to Watch: Sainsbury's-Asda merger blocked, Barclays revenues fall, and RBS CEO quits
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Sainsbury’s-Asda deal blocked
The Competition and Markets Authority has blocked Sainsbury’s (SBRY.L) £12bn merger with Asda on the grounds that it would result in higher prices for consumers.
Shoppers and motorists would be “worse off” if Sainsbury’s and Asda were to merge, the CMA said in its final report.
Stuart McIntosh, chair of the CMA inquiry group, said: “Following our in-depth investigation, we have found this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers.
Sainsbury’s CEO Mike Coupe said: “The specific reason for wanting to merge was to lower prices for customers.
“The CMA’s conclusion that we would increase prices post-merger ignores the dynamic and highly competitive nature of the UK grocery market. The CMA is today effectively taking £1bn out of customers’ pockets.”
Barclays revenues and profits fall
Profits and earnings at Barclays’ (BARC.L) investment bank crashed in the first quarter, heaping pressure on the under-fire bank and its battle with an activist investor.
Barclays on Thursday reported its first quarter earnings, which showed a tough quarter for the investment bank. Income fell by 11% to £2.5bn and pre-tax profit fell by 29% to £846m.
Across Barclays, total income was down by 2% to £5.2bn in the first quarter and pre-tax profit down by 10% to £1.5bn. Attributable profit was just over £1bn and return on equity across the bank was 9.6%.
RBS CEO quits
Ross McEwan has resigned as CEO of Royal Bank of Scotland (RBS.L).
RBS announced on Thursday that McEwan was resigning as CEO and executive director at the bank. He will work his 12 month notice period until a replacement is found.
The announcement comes ahead of the bank’s annual general meeting with shareholders in Edinburgh later today and ahead of RBS’ first quarter results on Friday.
McEwan helped to re-focus RBS on domestic banking activities and away from investment banking. The strategy helped to turn around RBS and the bank posted its first annual profit in a decade last year, before doubling them this year.
UBS profits crash
First quarter pre-profits dived by 26% at UBS, the Swiss bank said on Thursday.
Pre-tax profit at the bank fell to $1.5bn in the first three months of 2019 and operating income fell by 12%. UBS blamed “the challenging market environment and a very strong prior-year performance.”
CEO Sergio Ermotti said in a statement: “The first quarter of 2019 was characterised by challenging market conditions, which improved towards the end of the quarter and into April.
“We're on track with the strategic initiatives we announced at our Investor Update last October, as well as the measures we put in place to mitigate market headwinds. Benefits from these measures should come in the second half of the year, supporting our attractive capital return plan for the year.”
European markets
European stock markets were in the red after downbeat bank earnings and a mixed session for Asian markets overnight.
Britain's FTSE 100 (^FTSE) was down by 0.4%, Germany's DAX (^GDAXI) was down by 0.1%, France's CAC 40 (^FCHI) was down by 0.3%, and the Euronext 100 (^N100) was down by 0.3%.
Overnight, Japan's Nikkei 225 (^N225) closed up 0.4%, Hong Kong's Hang Seng index (^HSI) was down by 0.8%, and China's benchmark Shanghai Composite (000001.SS) was down by 2.4%.
What to expect in the US
US stock futures were pointing to a subdued open. S&P 500 futures (ES=F) were flat, Dow Jones Industrial Average futures (YM=F) were down by 0.1%, and Nasdaq futures (NQ=F) were flat.
Companies due to report earning later today in the US include:
