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What to watch: Nationwide profits fall 40%, DIY surge helps B&M, and stocks end winning streak

A branch of the Nationwide Building Society in Manchester, England. (NurPhoto/NurPhoto via Getty Images)

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

Nationwide profit falls 40%

Building society Nationwide has taken a £100m ($123m) hit due to the COVID-19 pandemic.

Nationwide said profits fell by 40% to £469m last year, partly due to a £100m hit from the impact from a poor economic outlook and payment holidays it granted to customers.

The building society’s profitability was also impacted by the cost of PPI payouts, the cost of technology investment, and lower income.

“In the last month of our financial year all our lives have been overshadowed by the coronavirus,” chief executive Joe Garner said in a statement.

“We are helping members in financial difficulty with payment holidays on mortgages and loans and interest-free overdraft periods, and we have promised that no mortgage member will lose their home over the next 12 months due to the impact of the coronavirus.

“We believe that the character of any organisation comes very much to the fore in times like these, and we have been making our decisions very much with this in mind.”

DIY surge helps B&M

Discount retailer B&M (BME.L) said strong demand for DIY and gardening equipment have helped drive sales higher despite the lockdown.

B&M said comparable sales in the eight weeks to May 23 were up 22.7% compared with a year earlier, although costs have risen due to implementing social distancing measures and protections for customers and staff.

Sales were also boosted by grocery demand, with food revenue up 6.6%.

“We have encountered exceptionally strong demand in our UK business over recent weeks,” chief executive Simon Arora said.

“Customers have been coming to our stores much less frequently through the lockdown but their average spend has been much higher than normal. I would like to thank them for their patience and consideration in observing social distancing inside and outside our stores during this period.”

Arora warned there was still “considerable uncertainty in relation to both the progression of Covid-19 and the economic outlook and it is therefore hard to predict future trading levels."

Shares rose 3.3%.

Stocks end winning streak

European stocks ended the week on the back foot, after days of solid gains.

Major markets opened lower on Friday, with analysts pointing to continued tensions between the US and China.

The FTSE 100 (^FTSE) fell by 0.9%, the DAX (^GDAXI) dropped by 1%, and the CAC 40 (^FCHI) sunk 1.1%. The Euronext 100 (^N100) slipped 0.9%.

Micheal Hewson, chief market analyst at CMC Markets, said the sour mood was due to “reports that President Trump was going to be holding a press conference later today on China.”

Chinese authorities on Thursday voted to approve a controversial security law Beijing is trying to impose on Hong Kong. The region has traditionally been self-governing but China has tried to assert more authority over the territory in recent years, sparking widespread protests in Hong Kong.

Futures pointed to a lower open on Friday in New York. S&P 500 futures (ES=F) were down 0.3%, Dow Jones futures (YM=F) were 0.4% lower, and Nasdaq futures (NQ=F) were down 0.3%.

Overnight in Asia, Japan’s Nikkei (^N225) fell 0.1%, the Hong Kong Hang Seng index (^HSI) slid 0.7%, and China’s Shanghai Composite (000001.SS) rose by 0.2%. Australia’s ASX 200 (^AXJO) dropped by 1.6%.

Paddy Power-owner raises £812m

Paddy Power owner Flutter (FLTR.L) on Friday raised £812m from investors to help fund the long-term changes required in a post-coronavirus world.

The firm, which also owns Betfair and Skybet, said that it had placed more than eight million new shares with institutional investors, representing around 5.5% of the company’s total share capital prior to the move.

The money was raised at a 4.7% discount on the closing price of Flutter’s shares on Thursday, when the company said that the move would “better position” the group to capitalise on long-term changes resulting from the coronavirus pandemic.

Starling Bank raised £40m

Challenger bank Starling has raised £40m from investors, taking the total new cash it has raised this year to over £100m.

Digital-only bank Starling said on Friday it had raised an additional £40m from investment company Merian Chrysalis (MERI.L), formerly known as Old Mutual Global Investors, and the family office of Starling’s biggest investor, quant trader Harold McPike. Both are already investors in Starling.

The fresh cash infusion comes just months after Starling raised £60m from investors in February. The startup has raised over £360m since its founding in 2014.

“This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever,” Starling founder and chief executive Anne Boden said in a statement.

Renault to cut 15,000 jobs

French carmaker Renault (RNO.PA) announced on Friday that it will cut 14,600 jobs worldwide and reduce its production capacity as part of a plan aimed to create cost savings of €2bn (£1.7bn, $2.1) in the next three years.

Renault, already hit by falling sales before coronavirus caused shutdowns and a collapse in consumer demand, said in a statement that 4,600 of the job cuts would take place in France, and 10,000 in the rest of the world.

The company, which employs about 180,000 people globally, also said it would reduce production from 4 million to 3.3 million vehicles by 2024, and focus on its more profitable models.

UK produces just 197 cars in April

UK car production fell by almost 100% in April, with just 197 cars produced in the entire month — the lowest monthly output since World War II, according to new figures from the sector.

The 99.7% decline on the same month in 2019 came as the country’s car plants were forced to close amid UK-wide coronavirus lockdown measures and a sharp fall-off in demand for vehicles.

Manufacturers instead turned their focus to the production of 700,000 pieces of personal protective equipment (PPE) for healthcare workers on the front lines of the pandemic.

MPs call on chancellor to extend support for self-employed

Pressure is mounting on the UK chancellor to extend coronavirus support for the self-employed.

Over 100 MPs on Friday signed a letter to chancellor Rishi Sunk urging him to extend income support for the self-employed during the COVID-19 pandemic.

The Association of Independent Professionals and the Self-Employed (IPSE) separately wrote to the Sunak on Thursday also urging an extension.

The Treasury set up the self-employed income support scheme (SEISS) in March, offering one-off grants to Britain’s self-employed to tide them over until May. Over two million people have claimed £6.8bn ($8.4bn) through the scheme.

The programme is set to expire over the weekend, leaving millions without guaranteed income as Britain’s lockdown persists.