The profits of oil giants BP and Shell halved last year, despite making profits of £11 billion
OIL giant BP followed rival Shell in seeing profits halve last year – but they still totaled a huge £11 billion, it emerged yesterday.
Lower prices meant the figure was well below 2022's record £22.1 billion, but it was higher than in any of the previous ten years.
Shell reported a similar slump last week, but is still suffering more than ever before in its history.
BP also surprised the market with better-than-expected figures for the final quarter of last year, with shares rising 5.46 percent.
Boss Murray Auchincloss, who replaced Bernard Looney last year, called 2023 a strong year and BP increased its dividend by 10 percent to 7.27 cents.
But critics struck.
Campaign group Global Witness said BP's “reckless shareholder payouts” of £10 billion last year could cover the expected costs of natural disasters in Britain over the next seven years.
Think tank the Institute for Public Policy Research accused BP of prioritizing shareholders “over investments in the green transition”.
Mr Auchincloss responded: “We are very happy with the direction we are heading, and the shareholders at the highest level are happy too.”
Russ Mould, investment director at AJ Bell, said the latest profits exceeded expectations, giving the new boss “a solid start”.
Mr Mold added: “A large share buyback also helps get investors on side as it demonstrates his commitment to returning cash to shareholders.”
Home coverage bills are rising
The cost of home insurance has risen by a fifth (£59) by the end of 2023.
The average price paid for combined home and buildings insurance was £364 in the last three months of the year.
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That was up from £305 in 2022, the Association of British Insurers (ABI) said.
It says £352 million will be paid to people whose homes were damaged by storms Babet, Ciaran and Debi.
At the beginning of this year there was also a sharp increase in the number of claims for burst pipes.
Insurers attributed the higher premiums to rising costs of raw materials, building materials and labor.
The ABI said: “Insurers are committed to offering competitively priced home insurance.”
Women in 19 years of slog
WOMEN will have to work an extra 19 years to save for the same pension as men, shocking new figures have revealed.
According to a report, on average, women retire with pension savings of £69,000, compared to £205,000 for men.
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This leaves women with £136,000 less, even though they are likely to need more because they are likely to live longer.
Women are affected by career differences, care responsibilities, childcare costs and lower incomes.
The report, produced by the Pensions Policy Institute and Now: Pensions, calls for changes to enable women in multiple jobs or who work part-time to be offered a workplace pension.
It also requires that women who take time to care for children or other family members have the opportunity to supplement their pensions when they can.
Jackie Leiper of Scottish Widows said: “Much more needs to be done to tackle the gender pension gap.”
Virgo no more
HIGH street bank Virgin Money UK has closed 39 branches in the past three months as it seeks £200 million in savings.
Provisions for bad debts were also increased to almost £640 million as more and more customers fell behind on their credit card payments.
Further problems saw mortgage lending fall 2.2 per cent to £57.1 billion in the three months to December.
But boss David Duffy remained positive, saying: “We are encouraged by the resilience of customers and the improving sentiment in the mortgage market as interest rates have peaked.”
THE sale of NatWest to the public could happen as early as June.
Chancellor Jeremy Hunt announced the offer as his fall statement.
The Treasury now owns less than 35% of the bank, worth around £7 billion, after a 2008 bailout.
UBS wields an axe
SWISS banking giant UBS plans to increase its cost cuts by at least 25 percent after mounting losses.
An £8bn savings target has been increased to £10.4bn after problems caused by last year's mega-merger with crisis-hit rival Credit Suisse.
Three thousand jobs are being cut and in the quarter to December losses amounted to £598m, compared with profits of £1.5bn the year before.
Boss Sergio Ermotti said: “We will focus on restructuring and optimizing the combined businesses.”
Big deals aren't that big of a deal
The number of major corporate deals fell dramatically last year, with the number of mergers and acquisitions down almost a fifth compared to 12 months earlier.
A PwC analysis shows that 3,628 deals were completed in 2023, compared to 4,362 the year before.
Activity volume in the second half was the second lowest in the past five years, with only the first half of 2020 lower, when dealmaking was hit hard by the pandemic.
One of the biggest deals of last year was the acquisition of Hotel Chocolat by confectionery giant Mars, which was announced in November.
The total value of deals closed last year was £88 billion, down 41 percent from almost £150 billion in 2022.
But cautious optimism is starting to grow as economic conditions stabilize.
Lucy Stapleton, head of deals at PwC UK, said: “There is still an appetite for deals.”
The pain of the Red Sea
Britain's construction sector remains under pressure as shipping prices rise due to Red Sea disruption.
Higher fees on imported items have contributed to a rise in companies' overall cost burden, according to the latest S&P Global/CIPS Construction Purchase Managers' Index.
“Housing is the weakest performing category,” said Tim Moore of S&P.
But business optimism is at its highest level in two years, amid hopes that the worst is over for them.