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| Shell shareholders approve BG takeover - business live | Shell shareholders approve BG takeover - business live |
| (35 minutes later) | |
| 2.11pm GMT | |
| 14:11 | |
| Oil has come back from its worst levels of the day, on renewed hopes that Opec and other producers such as Russia would act to stem the supply glut which has hit prices. | |
| Brent crude is now down 0.8% at $31.52 a barrel having fallen to $30.83 earlier. But US inventory figures due later will undoubtedly have an impact on the price, not to mention the Federal Reserve rate setting meeting and any effect the US central bank’s comments have on the dollar. | |
| Meanwhile the recovery in crude has helped support stock markets. Both the FTSE 100 and Germany’s Dax are marginally in positive territory after earlier falls, while France’s Cac is only narrowly down. | |
| US futures are showing a 57 point decline on the Dow Jones Industrial Average after Tuesday’s 282 point surge. | |
| Apple’s shares will of course be in focus after its disappointing update. | |
| 1.41pm GMT | 1.41pm GMT |
| 13:41 | 13:41 |
| Ben van Beurden is upbeat about today’s vote, despite the small revolt. | Ben van Beurden is upbeat about today’s vote, despite the small revolt. |
| Shell’s CEO says: | Shell’s CEO says: |
| “I am delighted with the positive shareholder vote and the confidence that shareholders have shown in the strategic logic of the combination of Shell and BG. | “I am delighted with the positive shareholder vote and the confidence that shareholders have shown in the strategic logic of the combination of Shell and BG. |
| Our immediate focus is on the successful completion of the transaction and we now await the results of tomorrow’s BG shareholder vote. | Our immediate focus is on the successful completion of the transaction and we now await the results of tomorrow’s BG shareholder vote. |
| Assuming BG’s shareholders approve the deal (they will), Shell will become the world’s biggest liquefied natural gas (LNG) trader. | Assuming BG’s shareholders approve the deal (they will), Shell will become the world’s biggest liquefied natural gas (LNG) trader. |
| 12.53pm GMT | 12.53pm GMT |
| 12:53 | 12:53 |
| It’s worth reiterating that 17% of Shell shareholders opposed the BG merger at today’s vote. | It’s worth reiterating that 17% of Shell shareholders opposed the BG merger at today’s vote. |
| That suggests that some big City investors have reservations about the deal, despite Shell chief Ben van Beurden’s best efforts to persuade them of its merits. | That suggests that some big City investors have reservations about the deal, despite Shell chief Ben van Beurden’s best efforts to persuade them of its merits. |
| Standard Life was the only large investor to go public - their head of equities, David Cumming, reckoned the deal only made sense when oil was over $60 per barrel, not $30ish. | Standard Life was the only large investor to go public - their head of equities, David Cumming, reckoned the deal only made sense when oil was over $60 per barrel, not $30ish. |
| But Standard Life owned less than 2% of the company, so others have clearly found the deal too risky. | But Standard Life owned less than 2% of the company, so others have clearly found the deal too risky. |
| Our financial editor, Nils Pratley, reminds me that even Royal Bank of Scotland’s disastrous merger with ABN Amro in October 2007 got the support of 99% of shareholders (who then suffered huge losses). So a 17% revolt may sting, a little. | Our financial editor, Nils Pratley, reminds me that even Royal Bank of Scotland’s disastrous merger with ABN Amro in October 2007 got the support of 99% of shareholders (who then suffered huge losses). So a 17% revolt may sting, a little. |
| Updated | Updated |
| at 12.53pm GMT | at 12.53pm GMT |
| 12.41pm GMT | 12.41pm GMT |
| 12:41 | 12:41 |
| Thousands of workers at Shell and BG now face the axe, once the merger goes through. | Thousands of workers at Shell and BG now face the axe, once the merger goes through. |
| Shell announced last month that it will cut around 2,800 positions, or some 3% of the combined company. | Shell announced last month that it will cut around 2,800 positions, or some 3% of the combined company. |
| Related: Shell to shed further 2,800 jobs after BG takeover | Related: Shell to shed further 2,800 jobs after BG takeover |
| 12.28pm GMT | 12.28pm GMT |
| 12:28 | 12:28 |
| Shell shareholders approve BG deal | Shell shareholders approve BG deal |
| Newsflash from The Hague - Royal Dutch Shell shareholders have just voted in favour of its £35bn merger with rival oil firm BG. | Newsflash from The Hague - Royal Dutch Shell shareholders have just voted in favour of its £35bn merger with rival oil firm BG. |
| That’s despite pressure from some shareholders to renegotiate the tie-up, which was negotiated before the oil price slumped to just $30 per barrel. | That’s despite pressure from some shareholders to renegotiate the tie-up, which was negotiated before the oil price slumped to just $30 per barrel. |
| During the meeting, Shell chief executive Ben van Beurden told the meeting that the deal would be a “springboard to simplify Shell”, the Evening Standard reports. | |
| Van Beurden also argued that a merger still made sense despite the cheaper oil price. | |
| The deal was approved by 83% of shareholders, with 17% opposing the plan. | The deal was approved by 83% of shareholders, with 17% opposing the plan. |
| BG investors give their verdict tomorrow, but there’s little chance that they will block the deal. | BG investors give their verdict tomorrow, but there’s little chance that they will block the deal. |
| Updated | |
| at 1.59pm GMT | |
| 12.23pm GMT | 12.23pm GMT |
| 12:23 | 12:23 |
| RBS is helping to drag the London stock market down into the red today. | RBS is helping to drag the London stock market down into the red today. |
| As traders scoff a quick sandwich (or three courses at Gaucho), the FTSE 100 is down 22 points at 5888. | As traders scoff a quick sandwich (or three courses at Gaucho), the FTSE 100 is down 22 points at 5888. |
| RBS are the second biggest faller, down 3.8% at 251p. The only biggest faller is Anglo American, the mining company, which has shed 5.2%. Other miners are also in the red, reflecting ongoing concerns over global growth. | RBS are the second biggest faller, down 3.8% at 251p. The only biggest faller is Anglo American, the mining company, which has shed 5.2%. Other miners are also in the red, reflecting ongoing concerns over global growth. |
| Other European markets are also in the red, as investors wait to hear from the US Federal Reserve at 7pm GMT (when it will surely leave interest rates unchanged). | Other European markets are also in the red, as investors wait to hear from the US Federal Reserve at 7pm GMT (when it will surely leave interest rates unchanged). |
| 12.02pm GMT | 12.02pm GMT |
| 12:02 | 12:02 |
| Here’s more reaction to RBS’s latest financial woes, via Press Association: | Here’s more reaction to RBS’s latest financial woes, via Press Association: |
| Russ Mould, investment director at AJ Bell, said: | Russ Mould, investment director at AJ Bell, said: |
| “It’s another bitter pill, but putting legacy issues behind it is essential if Chancellor George Osborne is going to off-load the Government’s stake during this parliament.” | “It’s another bitter pill, but putting legacy issues behind it is essential if Chancellor George Osborne is going to off-load the Government’s stake during this parliament.” |
| But banking analyst Gary Greenwood, at Shore Capital, said that, while “disappointing”, the latest financial charges are not unexpected. | But banking analyst Gary Greenwood, at Shore Capital, said that, while “disappointing”, the latest financial charges are not unexpected. |
| 11.42am GMT | 11.42am GMT |
| 11:42 | 11:42 |
| Over in America, traders are expecting Apple’s share price to slide after it warned that revenue will fall this quarter, for the first time in 13 years. | Over in America, traders are expecting Apple’s share price to slide after it warned that revenue will fall this quarter, for the first time in 13 years. |
| Apple set to open 3.5% lower. HT: @sunchartist pic.twitter.com/XLGH8YhlZe | Apple set to open 3.5% lower. HT: @sunchartist pic.twitter.com/XLGH8YhlZe |
| Market caps of huge companies. Will Google soon overtake Apple? pic.twitter.com/SoWrGyC9RX | Market caps of huge companies. Will Google soon overtake Apple? pic.twitter.com/SoWrGyC9RX |
| 11.11am GMT | 11.11am GMT |
| 11:11 | 11:11 |
| RBS isn’t the only bank counting the cost of the PPI scandal today. | RBS isn’t the only bank counting the cost of the PPI scandal today. |
| Santander, the Spanish financial giant, has announced it is setting aside another £450m to cover compensation to customers who were missold Payment Protection Insuranace. | Santander, the Spanish financial giant, has announced it is setting aside another £450m to cover compensation to customers who were missold Payment Protection Insuranace. |
| The move will dent profits at Santander UK. | The move will dent profits at Santander UK. |
| It could be the bank’s final bill for the scandal, but we won’t know for sure until the deadline for PPI claims in 2018. | It could be the bank’s final bill for the scandal, but we won’t know for sure until the deadline for PPI claims in 2018. |
| Related: Santander sets aside another £450m as PPI still haunts UK banks | Related: Santander sets aside another £450m as PPI still haunts UK banks |
| Updated | Updated |
| at 11.14am GMT | at 11.14am GMT |
| 10.48am GMT | 10.48am GMT |
| 10:48 | 10:48 |
| A wave of ‘challenger banks’ have sprung up since the financial crisis, hoping to win business from scandal-splattered big players such as Royal Bank of Scotland. | A wave of ‘challenger banks’ have sprung up since the financial crisis, hoping to win business from scandal-splattered big players such as Royal Bank of Scotland. |
| And one of them, Metro Bank, has announced plans to float on the stock market. Metro, which is losing around £10m per quarter, wants to raise £500m from shareholders. | And one of them, Metro Bank, has announced plans to float on the stock market. Metro, which is losing around £10m per quarter, wants to raise £500m from shareholders. |
| Related: Metro Bank to pursue stock market listing in February | Related: Metro Bank to pursue stock market listing in February |
| Random fact: Metro encourages dogs into its branches, and even lays on water bowls and doggie toys. If only bankers had spent more time doing that before the crisis, instead of churning out toxic debt and lumbering customers with PPI contracts.... | Random fact: Metro encourages dogs into its branches, and even lays on water bowls and doggie toys. If only bankers had spent more time doing that before the crisis, instead of churning out toxic debt and lumbering customers with PPI contracts.... |
| 10.19am GMT | 10.19am GMT |
| 10:19 | 10:19 |
| The British public had better face the truth - we’ll all be shareholders in the banks for a while longer yet. | The British public had better face the truth - we’ll all be shareholders in the banks for a while longer yet. |
| So argues Chris Beauchamp, senior market analyst at City firm IG. | So argues Chris Beauchamp, senior market analyst at City firm IG. |
| He told clients: | He told clients: |
| RBS’s ability to surprise investors with fresh bad news has been one of the hardy perennials of the past six years, and yet still the news keeps coming. George Osborne’s decision to sell a chunk of the government’s stake last August, which was derided at the time, now looks like a sound financial decision, but it does mean any further sales are essentially off the table. | RBS’s ability to surprise investors with fresh bad news has been one of the hardy perennials of the past six years, and yet still the news keeps coming. George Osborne’s decision to sell a chunk of the government’s stake last August, which was derided at the time, now looks like a sound financial decision, but it does mean any further sales are essentially off the table. |
| Coincidentally, with Lloyds down 2% this morning in sympathy, it seems the government will remain a key asset manager when it comes to UK banks. | Coincidentally, with Lloyds down 2% this morning in sympathy, it seems the government will remain a key asset manager when it comes to UK banks. |
| 10.05am GMT | 10.05am GMT |
| 10:05 | 10:05 |
| RBS CEO promises 'clean-up' after £2.5bn profits hit | RBS CEO promises 'clean-up' after £2.5bn profits hit |
| If you’re just tuning in, here’s Jill Treanor’s news story about the latest problems at RBS: | If you’re just tuning in, here’s Jill Treanor’s news story about the latest problems at RBS: |
| RBS takes £2.5bn hit to profits as chief executive announces bank ‘clean-up’ | RBS takes £2.5bn hit to profits as chief executive announces bank ‘clean-up’ |
| Royal Bank of Scotland is set to report its eighth consecutive year of full-year losses after announcing a string of charges for legal bills, compensation and a pension payment. | Royal Bank of Scotland is set to report its eighth consecutive year of full-year losses after announcing a string of charges for legal bills, compensation and a pension payment. |
| The bank, which is more than 70%-owned by the taxpayer, said it would take a £2.5bn hit to profits in 2015 as a result of a clean-up exercise, driving its share price to a three-year low in Wednesday’s early trading. | The bank, which is more than 70%-owned by the taxpayer, said it would take a £2.5bn hit to profits in 2015 as a result of a clean-up exercise, driving its share price to a three-year low in Wednesday’s early trading. |
| RBS shares fell 5% to 246p – below the 330p at which George Osborne sold off the the government’s first tranche of shares in August, and less than half the 502p average price at which taxpayers pumped £45bn into the bank. | RBS shares fell 5% to 246p – below the 330p at which George Osborne sold off the the government’s first tranche of shares in August, and less than half the 502p average price at which taxpayers pumped £45bn into the bank. |
| Issuing an unscheduled trading update on Wednesday, Ross McEwan, the chief executive of RBS, said the move was part of a continued clean-up but conceded that that the bank would make another full-year loss for 2015. It has not reported a profit since 2007. | Issuing an unscheduled trading update on Wednesday, Ross McEwan, the chief executive of RBS, said the move was part of a continued clean-up but conceded that that the bank would make another full-year loss for 2015. It has not reported a profit since 2007. |
| “I am determined to put the issues of the past behind us, and make sure RBS is a stronger, safer bank. We will now continue to move further and faster in 2016 to clean up the bank and improve our core businesses,” said McEwan. | “I am determined to put the issues of the past behind us, and make sure RBS is a stronger, safer bank. We will now continue to move further and faster in 2016 to clean up the bank and improve our core businesses,” said McEwan. |
| “We’ve always been open about the scale of past issues facing RBS and although there is clearly much more to do, this announcement is a further step towards addressing legacy issues and building a great bank for our customers and delivering long-term value for our shareholders,” he added..... | “We’ve always been open about the scale of past issues facing RBS and although there is clearly much more to do, this announcement is a further step towards addressing legacy issues and building a great bank for our customers and delivering long-term value for our shareholders,” he added..... |
| Here’s Jill’s full story: | Here’s Jill’s full story: |
| Related: RBS takes £2.5bn hit to profits as chief executive announces bank 'clean-up' | Related: RBS takes £2.5bn hit to profits as chief executive announces bank 'clean-up' |
| 9.45am GMT | 9.45am GMT |
| 09:45 | 09:45 |
| The latest problems at RBS show that bankers need keeping on a tight leash, argues campaigners for a financial transaction tax. | The latest problems at RBS show that bankers need keeping on a tight leash, argues campaigners for a financial transaction tax. |
| David Hillman, spokesperson for the Robin Hood Tax campaign, says: | David Hillman, spokesperson for the Robin Hood Tax campaign, says: |
| “It’s groundhog day in the City as RBS announces yet another huge provision for dodgy dealing and fleecing its customers. | “It’s groundhog day in the City as RBS announces yet another huge provision for dodgy dealing and fleecing its customers. |
| “Try as it might, the banking sector is incapable of shaking off its past sins. The government must take note — now is not the time for it to ease up on financial sector reform.” | “Try as it might, the banking sector is incapable of shaking off its past sins. The government must take note — now is not the time for it to ease up on financial sector reform.” |
| There are signs that Britain is taking a softer line with the City. An inquiry into banking culture was curiously abandoned at the end of last year, alarming campaigners. And yesterday, Bank of England deputy governor Andrew Bailey was appointed as head of the Financial Conduct Authority - and hand-picked by George Osborne for this crucial job. | There are signs that Britain is taking a softer line with the City. An inquiry into banking culture was curiously abandoned at the end of last year, alarming campaigners. And yesterday, Bank of England deputy governor Andrew Bailey was appointed as head of the Financial Conduct Authority - and hand-picked by George Osborne for this crucial job. |
| Updated | Updated |
| at 9.48am GMT | at 9.48am GMT |
| 9.26am GMT | 9.26am GMT |
| 09:26 | 09:26 |
| Citigroup analysts have warned that RBS could suffer even more legal charges this year, points out the BBC’s Kamal Ahmed: | Citigroup analysts have warned that RBS could suffer even more legal charges this year, points out the BBC’s Kamal Ahmed: |
| “We still see significant additional litigation charges in 2016, on top of the charges that have been announced today. | “We still see significant additional litigation charges in 2016, on top of the charges that have been announced today. |
| Citi describes RBS announcement as "profit warning" "We still see significant additional litigation charges in 2016" https://t.co/z44noTclTd | Citi describes RBS announcement as "profit warning" "We still see significant additional litigation charges in 2016" https://t.co/z44noTclTd |
| 9.21am GMT | 9.21am GMT |
| 09:21 | 09:21 |
| A quick explanation. When RBS says it is setting aside £1.5bn to cover “various US residential mortgage-backed securities (“RMBS”) litigation claims”, it is referring to one of the more noxious elements of the 2007-08 financial crisis. | A quick explanation. When RBS says it is setting aside £1.5bn to cover “various US residential mortgage-backed securities (“RMBS”) litigation claims”, it is referring to one of the more noxious elements of the 2007-08 financial crisis. |
| In the build-up to the crisis, milions of mortgages were sold to US citizens with shaky credit histories, who could not really afford them. Those loans were repackaged by investment banks into new financial products (the RMBSs) and sold onto investors who weren’t told how dangerous they might be. | In the build-up to the crisis, milions of mortgages were sold to US citizens with shaky credit histories, who could not really afford them. Those loans were repackaged by investment banks into new financial products (the RMBSs) and sold onto investors who weren’t told how dangerous they might be. |
| Cue the credit crunch, and the collapse of the subprime market. Mortgage-backed securities plunged in value, as the borrowers behind them failed to meet their payments and handed back the key to their homes. | Cue the credit crunch, and the collapse of the subprime market. Mortgage-backed securities plunged in value, as the borrowers behind them failed to meet their payments and handed back the key to their homes. |
| And the smaller banks, credit unions, insurers and suchlike who had been left holding them when the music stopped (and the Big Short paid out) launched waves of legal action against Wall Street. | And the smaller banks, credit unions, insurers and suchlike who had been left holding them when the music stopped (and the Big Short paid out) launched waves of legal action against Wall Street. |
| RBS had a finger in this unsavoury pie though its US subsidiary, Greenwich Capital Markets. In 2013, the SEC accused it of “misleading investors” and cutting corners, by selling loans that didn’t meet underwriting guidelines. | RBS had a finger in this unsavoury pie though its US subsidiary, Greenwich Capital Markets. In 2013, the SEC accused it of “misleading investors” and cutting corners, by selling loans that didn’t meet underwriting guidelines. |
| Updated | Updated |
| at 9.21am GMT | at 9.21am GMT |
| 8.53am GMT | 8.53am GMT |
| 08:53 | 08:53 |
| Important point: The £1.5bn in new US legal charges announced by RBS this morning does not cover any potential settlements with the US Department of Justice, or various US State Attorney General investigations. | Important point: The £1.5bn in new US legal charges announced by RBS this morning does not cover any potential settlements with the US Department of Justice, or various US State Attorney General investigations. |
| Ian Gordon of Investec warns that: | Ian Gordon of Investec warns that: |
| The timing and the cost of resolving those cases remains highly uncertain. | The timing and the cost of resolving those cases remains highly uncertain. |
| 8.39am GMT | 8.39am GMT |
| 08:39 | 08:39 |
| City analysts are punting out their opinions now. | City analysts are punting out their opinions now. |
| And Sandy Chen of Cenkos Securities isn’t too alarmed by RBS’s announcement. He argues that the bank is simply cleaning up the mess of previous eras (or possibly ‘previous errors’). | And Sandy Chen of Cenkos Securities isn’t too alarmed by RBS’s announcement. He argues that the bank is simply cleaning up the mess of previous eras (or possibly ‘previous errors’). |
| The new £1.5bn provision against US mortgage-backed security costs brings the total bill to £3.8bn - “closer to the £4-6bn totals that most analysts have had in mind”, Chen says. | The new £1.5bn provision against US mortgage-backed security costs brings the total bill to £3.8bn - “closer to the £4-6bn totals that most analysts have had in mind”, Chen says. |
| And the £500m payment protection insurance top-up should be one of the last big ones, given the FCA’s consultation on a 2018/19 time-bar on PPI claims, Chen adds. | And the £500m payment protection insurance top-up should be one of the last big ones, given the FCA’s consultation on a 2018/19 time-bar on PPI claims, Chen adds. |
| His conclusion: | His conclusion: |
| Bad news – really? More like putting their past in their behind, as Pumba said (in the Lion King). | Bad news – really? More like putting their past in their behind, as Pumba said (in the Lion King). |
| [I think Pumba actually says “you got to put your behind in your past.” -- but we get the gist] | [I think Pumba actually says “you got to put your behind in your past.” -- but we get the gist] |
| Updated | Updated |
| at 8.43am GMT | at 8.43am GMT |
| 8.29am GMT | 8.29am GMT |
| 08:29 | 08:29 |
| The UK government currently owns almost 73% of RBS, and at today’s share price I fear we’re stuck with it for some time. | The UK government currently owns almost 73% of RBS, and at today’s share price I fear we’re stuck with it for some time. |
| The taxpayer paid around 502p per share when it bailed the stricken bank out in 2008. | The taxpayer paid around 502p per share when it bailed the stricken bank out in 2008. |
| Today, RBS shares are trading at just 250p, so we would take a stonking loss if George Osborne sells another slice of the bank. | Today, RBS shares are trading at just 250p, so we would take a stonking loss if George Osborne sells another slice of the bank. |
| Last summer, he sold £2.1bn of stock at around 320p - crystallising a £1bn loss for the taxpayer. That deal was criticised, but with hindsight the hedge funds who bought the stock are now sitting on a loss themselves. | Last summer, he sold £2.1bn of stock at around 320p - crystallising a £1bn loss for the taxpayer. That deal was criticised, but with hindsight the hedge funds who bought the stock are now sitting on a loss themselves. |
| All the people who complained about Osborne selling RBS shares at 330p will of course notice that it dropped back below 250p this morning. | All the people who complained about Osborne selling RBS shares at 330p will of course notice that it dropped back below 250p this morning. |
| 8.13am GMT | 8.13am GMT |
| 08:13 | 08:13 |
| RBS shares hit lowest point since 2012 | RBS shares hit lowest point since 2012 |
| RSB shares have just hit their lowest level since September 2012, I reckon. | RSB shares have just hit their lowest level since September 2012, I reckon. |
| That’s not good news for George Osborne, as he tried to sell the bank back to the private sector. | That’s not good news for George Osborne, as he tried to sell the bank back to the private sector. |
| 8.06am GMT | 8.06am GMT |
| 08:06 | 08:06 |
| RBS shares fall 5% after new wave of costs | RBS shares fall 5% after new wave of costs |
| Shares in Royal Bank of Scotland have slumped by 5% at the start of trading, shedding 12.1p to 248p. | Shares in Royal Bank of Scotland have slumped by 5% at the start of trading, shedding 12.1p to 248p. |
| That makes RBS is the biggest faller on the FTSE 100. | That makes RBS is the biggest faller on the FTSE 100. |
| Bad news for shareholders - which in RBS’s case is every member of the UK public, as we bailed the bank out in 2008. | Bad news for shareholders - which in RBS’s case is every member of the UK public, as we bailed the bank out in 2008. |