Monday, 13th February: The Co-op Bank is up for sale. The bank was rescued from collapse in 2013 by a group of US hedge funds after revealing a £1.5bn black hole in its accounts, but has continually failed to make a profit since 2011, claiming it would remain loss-making until the end of 2017, despite cutting its cost base by a fifth. The bank has 4 million customers but has failed to strengthen its balance sheet as interest rates remain so low. The price to buy the bank is unclear as the capital required by any buyer is very much an unknown. However, the Bank of England’s Prudential Regulation Authority (PRA), which regulates the Co-op Bank, “welcomes the measures” announced today.
It has been a relatively quiet news day in the UK, with the FTSE ticking up over the course of the day, driven on by miners. Copper prices have risen to a new 20-month high as strike action at the world’s largest copper mine and the threat of supply disruptions at an Indonesia mine have triggered supply worries. Strike action has been ongoing since Thursday as talks between management and workers broke down at the Escondida mine in northern Chile. Subsequently, on Friday, BHP Billiton, the majority owner of the mine said they would not be able to fulfil contracts for copper deliveries or shipments because of the strike. Anglo American (+4.21%), Rio Tinto (3.00%) and Glencore (2.56%) took the podium positions in London at the close. BHP Billiton themselves closed +0.73%.
Indices in the US are continuing to rise higher after all closing at new record highs on Friday, and look set to beat those new highs today. The three major indices, as well as the Russell 2000 (2000 small-cap companies in the Russell 3000 index – made up of 3000 of the biggest US stocks) have all been driven higher as US President Donald Trump announced that business tax cuts were moving ahead of schedule. At the time of writing the S&P 500 is +0.45%, the Dow Jones +0.64% and the NASDAQ +0.51%.