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Equilibrium's Finance and Investment News Roundup

As part of our finance and investment news roundup this week, we look at major restructuring at Standard Chartered, a further shares dip for Volkswagen, weak growth for British exporters and insurance bill increases for millions of Brits.

 

Standard Chartered announces job losses and restructure

The Asia-focused UK bank Standard Chartered has announced plans for a major restructuring as it looks to create a "focused and well-capitalised" group. The bank revealed it is to cut around 15,000 jobs by 2018 and raise $5.1 billion (£3.3 billion) in new capital through a rights issue, with the money being used to improve the group's balance sheet and to cover costs related to the reorganisation.

As part of the rights issue, shares will be sold at a price of 465 pence per share, while there will be two new shares issued for every seven existing shares. The price reduction represents a 35% discount on the last traded price in London.

The announcements were made as Standard Chartered reported a pre-tax loss of $139 billion for the third quarter of this year, which compared with a $1.5 billion profit for the same period in 2014. It was also revealed that the bank's revenue dropped 18.4% to $3.68 billion during the three-month period, while losses related to bad loans climbed to $1.23 billion. 

Volkswagen shares continue drop following emissions scandal

A large-scale emissions scandal is continuing to have a significant negative impact on Volkswagen (VW) shares. On Tuesday, shares in the German car manufacturer plummeted by as much as 5% after regulators in the US made further accusations against the company, which has come under serious fire after being accused of fitting devices in diesel engines in VW cars sold in the US to cheat emissions tests.

The US Environmental Protection Authority claimed on Monday that the devices were also being used to influence air-pollution tests in 3.0-litre V6 diesel engines. This could be particularly damaging to VW as these engines are often used in prestigious brands such as Porsche and Audi. However, VW has denied that any such software has been installed.

To date, the scandal has reduced VW's market value by more than €20 billion, and on Tuesday morning trading shares in the carmaker stood 3.2% lower at €109.15. 

'Six-year low' for UK exports

UK exports have dropped to their lowest level for six years, new research has found. According to the findings from the British Chambers of Commerce (BCC) and delivery company DHL, which involved the surveying of 1,250 British firms, the three months to September saw the most limited growth in overseas sales and orders since 2009's second quarter.

John Longworth, Director General of the BCC, said: "Driving export growth is key to reducing the UK's deficit and maintaining our global competitiveness. These figures make it clear that the UK's export drive is at risk of going into reverse gear, precisely at the time when it needs to be moving forward." 

'Insurance bill hike' for millions of Brits

Millions of people in the UK are set to suffer from increased insurance bills following rises in Insurance Premium Tax (ITP). The ITP increase from 6% to 9.5% came into effect on Sunday and was announced by Chancellor of the Exchequer, George Osborne, as part of his Summer Budget.

The move will impact various policies, with an average rise of £13 for motorists either renewing or taking out a comprehensive policy, while buildings and contents policies are set to climb by an average of £10.

Younger drivers in particular could be among the hardest hit, with those under the age of 22 likely to pay an average of £42 more.