Updates from Pearson, F&C and Lloyds

The FTSE 100 climbed barely two points on Friday, finishing at 5,806 points. The biggest climber was Anglo American, up +4.09% while Kazakhmys was the biggest faller, down -2.92%.

Asian markets mostly traded weaker overnight. US stock exchanges will close today on precautionary measures over Hurricane Sandy.
We start with Pearson - which has confirmed the Penguin and Random House merger, to be tagged Penguin Random House (though it's thought News Corp could also put in a rival bid). Part of the reason for the move is the growing sales clout from online retailers like Amazon.

In terms of numbers, Pearson saw sales increase 5% for the first nine months of 2012. There's good growth from International Education and the FT Group and robust number from its North American Education.

But operating profit came in 5% lower, reflecting, said the company, "the sale of FTSE in 2011, acquisition integration costs and continued weakness in UK professional training." However the company reiterates its full-year sales and profit outlook - growth in both.

Next, an interim from F&C. Assets Under Management for the financial player dip to £96.8bn as of 30 September 2012 (30 June 2012: £98.2 billion). There's consumer and Institutional investment performance of £0.8 billion, or 2.2%, in the quarter.

"We have now put in place a new management structure to implement the consumer strategy set out earlier this year," says exec chairman Edward Bramson. "We currently anticipate initial revenues from our refocused direct-to-consumer marketing approach will occur in the first half of 2013 and look forward to growing our presence in this area."

Increased cost reductions set out at half year results remain on schedule. F&C part-blamed the dip in assets under management on foreign exchange fluctuations.

Lastly, Lloyds, in an attempt to clean up its act over mis-selling practices, is getting rid of sales incentives connected to product sales. The emphasis instead will be on customer service, a traditional metric far more widely used before riskier investment banking came on the scene.

The news comes at the start of a fresh third quarter reporting season for a rash of banks, including Lloyds, Barclays and RBS, commencing Wednesday with Barclays.

However the banks are also having to factor in significant PPI compensation pay-outs. It's likely Barclays may have to shell out in the order of £700 million. But Lloyds, responsible for many, many PPI policies, may have to set aside well in excess of £2bn.

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