Bank of America boss commits to UK, despite recent political and economic turmoil

Published

3 years ago

October 26, 2022

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The chairman and chief executive of one of the world’s biggest banks says he is “committed to the UK”, despite recent political and economic turmoil.

Brian Moynihan, of Bank of America, also told Sky News that he is not concerned about the prospect of an increase in corporation tax, adding: “We don’t live or die by our tax rate.”

Mr Moynihan said of the UK’s recent political turbulence: “We don’t get too wound-up about [elections].

“It’s always something in the moment, but it’s a population’s job to elect officials and our job to manage our company given those elections.

“I think the UK is one of the leading economies and leading countries in the world and is a bastion of stability in general sense.

“And we’ve got to go through a midterm election in the US, we’ve got to get to the other side of that, and then stability can settle in.

“So we always say our company’s been around for 230-plus years, we’ve been through a lot of elections, and our job is just to manage through them.”

Bank of America is the second-largest bank in America with a market capitalisation of nearly $300bn (making it roughly 10 times bigger than Barclays, Lloyds and NatWest, and more than three times bigger than HSBC).

It has about 5,000 employees in the UK, mainly in London but also Chester and Bromley.

Mr Moynihan – one of the longest-serving Wall Street chief executives – has been leading Bank of America since 2010 over which time the share price has returned 175%.

He addressed the very difficult economic challenge that the new UK prime minister faces, but was not too upset at the prospect of the UK corporation tax rate rising instead of falling, as had been planned by Rishi Sunak’s predecessor Liz Truss.

“I think governments have to get a balance between taxation of corporations, individuals and what they spend the money on – and that’s a long-term problem for all governments,” he said.

“People shouldn’t be bidding for people’s business on tax rates, because ultimately, that leads to things which get a little out of skew.

“So I think the key is to have a consistent rate where people can invest across long periods of time, that’s fair to the companies and fair to the people they employ and fair to the business they generate, and tax revenues they generate, and then also fair to the citizens, so the governments can do what they need to do.

“I think those things settle over time, they go up and they go down.

“And you know, we don’t live or die by our tax rate, we live or die by having great customers doing great things with them – generate a lot of revenue, keep expenses in check, generate a lot of pre-tax income, and then we’ll figure out what the taxing authorities do.”

Corporation tax in the United States is 21% (with some surcharges depending state), which was lowered by president Donald Trump from 35% in 2018.

President Joe Biden has suggested it should rise again to 28%.

The UK corporation tax rate is currently 19% and due to rise to 25% by April 2023 – a rise that Ms Truss planned to cancel, but now looks set to remain in place.

Mr Moynihan was sober about the global economic outlook, saying: “Our economists, and most economists around the world predict recessions in various economies over the next 12 to 18 months.”

That said, he felt the US economy was looking resilient.

“The US economy at the end of the day, it’s a consumer-driven economy.

“We see our consumers even for the first three weeks of October, they’re now spending still 9%-plus over what they spent last year, which is one-and-a-half times to two times the rate they’re spending pre pandemic.

“And so that’s a good thing.

“Now, ahead of them, you know, we’ve got the Fed raising rates and slowing down the economy.

“At the end of day, [US consumers] have good credit statistics and have the ability to borrow, so that’s good news.”

Mr Moynihan was brought in to lead Bank of America after the financial crisis, and is always on the lookout for the next potential issue for his company and his industry, particularly following the UK’s recent issue with certain pension funds having too much exposure to Liability Driven Investments (LDI’s).

“We always look for, if you think about the Princess and the Pea analogy, under all those mattresses, you’re always looking for that pea to figure out where the risk is and where the risk gets bottled up.

“And you saw some that come out when you had a particularly strong movement in gilts, in the bonds in the UK.

“But the market now loves stability…and you’re seeing it settle back down given the circumstances over the last few weeks. But yeah, that was interesting. We looked around and said: Where else could this infect the economy?

“But the good news is the banking systems across the world are in pretty good shape.”

Business

Steel tycoon Gupta’s troubles deepen amid Australian probe

Published

13 hours ago

August 28, 2025

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Steel tycoon Gupta's troubles deepen amid Australian probe

Sanjeev Gupta, the metals tycoon whose main British business was forced into compulsory liquidation last week, is facing a deepening probe by Australian regulators into his operations in the country.

Sky News has learnt that officials from the Australian Securities & Investment Commission (ASIC) last week served Mr Gupta’s Liberty Steel group with a new demand for information about its activities.

Sources said the regulator had also taken possession of a mobile phone belonging to Mr Gupta as part of the probe.

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One insider said that other senior executives at the company may also have had electronic devices confiscated, although the accuracy of this claim could not be verified on Thursday morning.

Both ASIC and a spokesman for Mr Gupta’s GFG conglomerate refused to comment on the suggestion that a search warrant had been produced by the watchdog.

ASIC’s deepening investigation comes a month after it said that three of GFG Alliance’s companies had been ordered by the Supreme Court of New South Wales to lodge outstanding annual reports with it.

It is the latest headache to hit Mr Gupta, whose companies remain under investigation by the Serious Fraud Office in the UK.

Last week, the Official Receiver took control of Speciality Steels UK following a winding-up petition from creditors led by Greensill Capital, the collapsed finance firm.

Mr Gupta remains intent on buying SSUK back, and has assembled financing from BlackRock, the world’s largest asset manager, Sky News revealed last week.

SSUK employs nearly 1,500 people at steel plants in South Yorkshire, and makes highly engineered steel products for use in sectors such as aerospace, automotive and oil and gas.

“[Gupta Family Group] will now continue to advance its bid for the business in collaboration with prospective debt and equity partners and will present its plan to the official receiver,” Jeffrey Kabel, chief transformation officer, at Liberty Steel, said after SSUK’s collapse.

“GFG continues to believe it has the ideas, management expertise and commitment to lead SSUK into the future and attract major investment.”

“The plan that GFG presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight,” Mr Kabel added.

“Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution.”

Mr Gupta wants to hand control of SSUK to his family in a bid to alleviate concerns about his influence.

One source close to the situation claimed that the ownership structure devised by Mr Gupta would be independent, ring-fenced from him and have “robust standards of governance”.

Behind Tata Steel and British Steel, SSUK is the third-largest steel producer in the country.

Other parts of Mr Gupta’s empire have been showing signs of financial stress for years.

Mr Gupta is said to have explored whether he could persuade the government to step in and support SSUK using the legislation enacted to take control of British Steel’s operations.

His overtures were dismissed by Whitehall officials.

He had previously sought government aid during the pandemic but that plea was also rejected by ministers.

Business

Nvidia beats revenue expectations in boost to AI investment and US stock markets

Published

21 hours ago

August 28, 2025

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Nvidia beats revenue expectations in boost to AI investment and US stock markets

The world’s most valuable company, and first to be valued at $4trn (£2.9trn), beat market expectations in keenly anticipated financial results.

Microchip maker Nvidia recorded revenues of $46.7bn (£34.6bn) in just three months up to July, latest financial data from the company showed, slightly better than Wall Street observers had expected.

The company’s performance is seen as a bellwether for artificial intelligence (AI) demand, with investors paying close attention to see whether the hype is overblown or if significant investment will pay off.

Originally a creator of gaming graphics hardware, Nvidia’s chips help power AI capability – and the UK’s most powerful supercomputer.

Nvidia’s graphics processors underpin products such as ChatGPT from OpenAI and Gemini from Google.

Other tech giants – Microsoft, Meta and Amazon – make up Nvidia’s biggest customers and are paying large sums to embed AI into their products.

Why does it matter?

Nvidia has been central to the boom in AI development and the surge in tech stock valuations, which has seen stock markets reach record highs.

It represents about 8% of the value of the US S&P 500 stock market index of companies relied on to be stable and profitable.

Strong results will continue to fuel record highs in the market. Conversely, results that fail to live up to the hype could trigger a market tumble.

Nvidia itself saw its share price rise more than 40% over the past year. Its value impacts anyone with cash in the US stock market, such as pension funds.

The S&P 500 rose 14% over the past year, and the tech-company-heavy NASDAQ gained 21%, largely thanks to Nvidia.

As such, its earnings can move markets as much as major economic or monetary policy announcements, like an interest rate decision.

What next?

Revenue rises are forecast to continue to rise as Nvidia said it expected a rise to roughly $54bn (£40bn) in the next three months, more than the $53.14bn (£39.3bn) anticipated by analysts.

This excludes any potential shipments to China as export of Nvidia’s H20 chip, designed with the Biden administration’s export crackdown on advanced AI powering chips in mind, had been banned under US national security grounds.

But in recent weeks, Nvidia and another chipmaker, AMD, reached an unprecedented agreement to pay the Trump administration a 15% portion of China sales in return for export licences to send chips to China.

There were no H20 sales at all to China in the second quarter of the year, the period for which results were released on Wednesday evening.

Previously, 13% of Nvidia’s revenue came from China, with nearly 50% coming from the US.

Market reaction

Despite the expectation-beating results, Nvidia shares were down in after-hours trading, as the massive revenue rises previously booked by the company were not repeated in the latest quarter.

Compared to a year ago, revenues rose 56% and 6% compared to the three months up to April.

The absence of Chinese sales in forecasts appeared to disappoint.

Business

Bonuses to rise for Ryanair staff spotting oversized baggage

Published

1 day ago

August 27, 2025

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Bonuses to rise for Ryanair staff spotting oversized baggage

Ryanair staff are to get more money for spotting and charging for oversized baggage, the company’s chief executive has said.

Michael O’Leary said he made “absolutely no apology” for catching people who are “scamming the system”.

The reward for intercepting passengers travelling with bags larger than permitted will increase from €1.50 (£1.29) to €2.50 (£2.15) per bag in November, and the monthly €80 (£68.95) payment cap will be scrapped, Mr O’Leary said.

At present, the budget airline allows travellers a free 40cm x 30cm x 20cm bag, which can fit under the seat in front, and charges for further luggage up to 55cm x 40cm x 20cm in size.

Customers face fines of up to £75 for an oversized item if it is brought to the boarding gate.

“I make absolutely no apology for it whatsoever”, Mr O’Leary said.

“I am still mystified by the number of people with rucksacks who still think they’re going to get through the gate and we won’t notice the rucksack”, he added.

Around 200,000 passengers per year are charged bag fees at airport gates.

“We have more work to do to get rid of them”, Mr O’Leary said.

“We are running a very efficient, very affordable, very low-cost airline, and we’re not letting anybody get in the way.”

The airline does not support a European Union proposal to ensure customers get a free cabin bag, he said.

Air fares

After a 7% fall in air fares for the year to 31 March, Mr O’Leary said he expected ticket prices to go back up this financial year.

“We expect to get most of last year’s 7% decline, but not all,” he told reporters in a news conference.

“We have sold about 70% of our September seats, but we have another 30% to sell, and it’s those last fares, what people pay for all those last-minute bookings through the remainder of September, that will ultimately determine what average airfares are.”