Pick of the early market news

City worker passes London Stock Exchange signThe long-expected recommendation that Britain's banks should separate their retail and investment operations dominates the early wires. On a quiet morning for results, Associated British Foods provides an upbeat assessment of its business, with news of the continuing growth of Primark.
The FTSE 100 closed last week down 125.73 points at 5214.65. That saw £33bn wiped off the value of Britain's leading firms to round off a see-saw week for the markets. Rumours that Greece may be on the verge of defaulting look set to dominate today.

The Independent Commission on Banking has recommended that banks will be required to ring-fence their retail banking divisions from riskier investment banking activities. It also said banks should hold core capital of at least 10% in retail operations. These reforms could mean pre-tax costs of £4bn for banks, the ICB has confirmed.

The Treasury has issued a statement welcoming the proposal, saying: "It considers it to be an impressive report and an important step towards a new banking system. The Government will digest the report in detail. The Chancellor will make a statement to Parliament this afternoon."

A trading update from Associated British Foods says operating profit for the second half of the year is expected to be in line with expectations. Revenue and profits in the UK grocery business are expected to be ahead of last year, with Twinings Ovaltine performing particularly strongly.

The ABF statement also says sales at Primark are expected to be up 13% on last year. Like-for-like sales in the first half of the year rose 3%, although heavy discounting will hit the operating margin. The firm has added 19 Primark stores to its roster during the financial year.

Christie Group, which provides business services to the leisure, retail and care markets, posted a 98% increase in profit to £600,000 for the first half of the year in an interim this morning. Revenue was up 8% to £27.3m and some "significant" agency and valuation work has been secured for the future.

Links (open in new window)

Read Full Story