© Charlie Bibby/Financial Times

Given the run of luck Metro Bank has had over the past 18 months, there was never much hope for its half-year results. On Wednesday morning it said it made a £240m loss in the first six months of the year — not far off twice the £131m loss it made for the whole of last year. In the first half of 2019, it turned a £3.4m profit. Around 60 per cent of Metro’s £183m underlying loss was due to Covid-19, the bank said. It made £112m in provisions for expected losses on loans.

Chief executive Dan Frumkin has been in post since February, with a mandate to turn round the bank. He delivered an increase in deposits, up 8 per cent since the start of January, though total underlying revenue fell 17 per cent over that time and net interest margin by 0.25 per cent — or 0.47 per cent since the first half of last year. Metro said Mr Frumkin’s turnround plan was “on track” but performance had been affected by Covid-19.

Briefly

Insurer Hastings has agreed a takeover led by its largest shareholder, South Africa’s Rand Merchant Holdings, and Finnish insurer Sampo. The all-cash deal values Hastings at £1.7bn and comes at a 47 per cent premium to Hastings’ share price before an approach was announced last week. The takeover will now be put to a shareholder vote.

Legal & General held its dividend, despite pressure earlier in the year from the Bank of England for insurers to exercise prudence over payouts. Operating profits fell 2 per cent year-on-year during the first six months of 2020, with the insurer and asset manager pointing to its resilience through Covid-19. Lower interest rates and equity market falls, which hit asset valuations, did affect statutory profits after tax, which dropped to £290m from £874m.

Revenues at bookie William Hill dipped by a third during the first half, when shops temporarily shut and sports fixtures were cancelled. The company said 119 of its outlets would not reopen because of Covid-19’s effect on the UK high street. But it said that it would repay almost £25m in furlough funds to the government after a “robust recovery” over the past month.

Finally operating profits at recruiter PageGroup collapsed to just £0.4m in the six months to June, as the hiring market stalled. The UK’s top executives don’t need to worry about their positions, though: new research out on Wednesday shows that none of the biggest UK companies that made pay cuts during the pandemic changed their longer-term incentive plans. More on that story here.

Corporate Spotlight

Graphic showing European bank results for the second quarter of 2020

Four trends from the bank earnings season. Trading revenues provided a boost but will loan loss provisions absorb a wave of defaults? Our US and European banking team run you through what we learnt from the wave of bank results of recent weeks.

Beyond the Square Mile 

Shares in cinema operators fell after Disney announced ‘Mulan’ will be available to buy on Disney+ on September 4 in the US, Canada and western Europe © AP

Walt Disney will sell Mulan online for $30 in September, dealing a blow to cinemas that were counting on the blockbuster film to lure people back to the movies. The new release will be available to buy on Disney+ on September 4 in the US, Canada and western Europe. Bob Chapek, Disney chief executive, described the decision to offer the movie online as a “one-off” rather than a change in strategy as the media giant reported a $4.7bn loss in the June quarter. 

Commerzbank, Germany's second largest listed lender, wrote off €175m of loans in the second quarter made to the defunct payments provider Wirecard. Commerzbank, which is embroiled in a leadership crisis after recently losing its chairman and chief executive, warned investors on Wednesday it will not make a profit this year due to loan losses linked to coronavirus and the Wirecard scandal as well as restructuring charges.

A group of black Nike employees voiced repeated objections to the release of a recent ad, featuring Colin Kaepernick and Serena Williams, asking management to publicly acknowledge the company’s own internal shortcomings on equality before promoting the ideal to consumers. Inside Nike, the plans to publish the ad drove “a growing feeling internally that we were talking the talk outside but not walking the walk inside”, according to one of the people familiar with the matter.

Essential comment before you go

© Ingram Pinn/Financial Times

Leo Lewis The contention that “data is the new oil” has gradually charmed its way into mainstream discourse. As with oil, we can see its protection becoming a matter of national priority, long-term strategies, and conceivably, conflict. The now pressing questions for business — across all industries and around the world — are how literally to take the analogy.

Lombard The AA must reduce its debt. It needs a wad of cash from somewhere, which means either private equity or a rights issue since no one else in their right mind would buy the thing.

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