Category: Business News

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UK tobacco firm British American Tobacco (BAT) says it is under official investigation by the Serious Fraud Office (SFO) over allegations it paid bribes in East Africa.

The allegations were first made in a BBC Panorama programme in 2015.

BAT said that it had been investigating the claims through external legal advisers and it had been co-operating with the SFO.

The firm said it also intended to co-operate with this formal investigation.

The Panorama programme alleged that BAT, whose brands include Dunhill and Pall Mall cigarettes, had made illegal payments to politicians and civil servants in East Africa.

The BBC was shown hundreds of secret documents purporting to show backhanders to various officials.

BAT said in a statement: “As previously announced, we are investigating, through external legal advisers, allegations of misconduct.

“We have been co-operating with the Serious Fraud Office (“SFO”) and British American Tobacco (“BAT”) has been informed that the SFO has now opened a formal investigation. BAT intends to co-operate with that investigation.”

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HSBC has reported a rise in its first half profits and announced a share buyback as it prepares to ring-fence its UK retail arm by 2019.

Europe’s biggest bank reported a 5% rise in pre-tax profit of $10.2bn (£7.8bn) for the first six months of 2017, up by about $500m.

As widely expected, the bank has also announced a share buyback of up to $2bn which it expects to complete by the end of 2017.

HSBC shares rose 3% on the news.

The bank’s shares fell back later but its share price has rallied over the past year, helped by the weak pound which makes profits earned abroad more valuable when repatriated to the UK.

Since the 2008 financial crisis, HSBC has been cutting jobs and selling assets to make the group more profitable, while still making dividend payments to shareholders.

“In the past 12 months, we have paid more in dividends than any other European or American bank and returned $3.5bn to shareholders through share buybacks,” HSBC’s chief executive Stuart Gulliver said.

The bank has used share buybacks to offset the impact of shares being paid out as dividends.

The announcement takes the total of HSBC share buybacks since the second half of 2016 to $5.5bn.

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Analysis: Dominic O’Connell, BBC Today business presenter

While HSBC’s headline numbers slightly beat expectations, the fine print shows how banks are still feeling the fallout from the financial crisis nearly a decade ago, and in unexpected ways.

There is the list of pending litigation from investors who feel cheated, a long series of continuing investigations from US and UK authorities – and the huge cost of meeting new financial regulations.

In the UK, the biggest has been the “ring-fence” – the plan to have retail and investment banking operations separated by 2019.

HSBC said the process of untangling the two (and setting up a new Birmingham headquarters for the retail arm) had already cost it nearly £400m. At its height, the project employed 2,000 people, according to HSBC chairman Douglas Flint – about 800 more than are employed at HM Treasury.

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“Like many of the other banks, HSBC has beaten modest expectations,” said Peter Hahn of the London Institute of Banking and Finance.

HSBC said it had spent about $500m on splitting its retail from its investment banking arm, which it described as “one of the largest projects ever undertaken by the group”. The bank’s new Birmingham headquarters for its UK retail business will begin operating in July 2018.

“The ring-fence is a big expense creating lots of uncertainty,” said Mr Hahn. “It’s not just the headquarters, it’s separating lots of the systems in the bank.”

HSBC said it took a charge of £228m ($300m) during this reporting period for PPI claims, primarily reflecting a recent increase in complaint volumes. It has set aside £3.3bn to date to deal with the claims relating to mis-sold mortgage payment protection, a matter that is casting a long shadow over the balance sheets of UK banks.

Last week Lloyds and Barclays both said they were setting aside another £700m to cover the cost of compensating customers over insurance mis-selling.

British Gas will increase electricity prices by 12.5% from mid-September, its owner Centrica has said.

However, the company’s gas prices will be held at their current level.

The average annual dual-fuel bill for a typical household on a standard tariff will rise by £76 to £1,120, up by 7.3%.

British Gas had frozen its gas and electricity prices for six months in February, saying at the time it was able to do so by cutting costs to offset higher wholesale prices.

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Charges for unarranged bank overdrafts could be banned, under one option being considered by the Financial Conduct Authority (FCA).

It said the charges for those who go into the red without agreement can be high and complex.

Earlier this month, the UK’s largest lender, Lloyds, said it was getting rid of unarranged overdraft fees altogether from November.

Barclays has already stopped all unauthorised lending.

However, other banks charge about £6 a day, or up to £90 a month.

“We believe there is a case to consider fundamental reform of unarranged overdrafts, and whether they should have a place in any modern banking market,” the FCA said, in its review into the high-cost credit market.

“Maintaining the status quo is not an option,” said FCA chief executive Andrew Bailey. Unarranged overdraft fees were often “significantly higher” than payday loans, he added.

However, the FCA made it clear that an outright ban on unarranged overdrafts was only one option being considered.

It could impose a cap on charges, or demand some affordability checks before a bank lends money on an unplanned basis.

A year ago the Competition and Markets Authority (CMA) decided against a cap on charges.

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Half of all overdraft users go over their agreed borrowing limit, according to the CMA. In 2014 such customers spent £1.2bn in charges as a result.

The banking industry responded by saying that customers were usually warned if they were about to go overdrawn, usually via a text alert on on a mobile app.

“When used sustainably, consumer credit is important for economic growth, and lenders work hard to ensure the balance is right between helping customers to borrow while ensuring longer term affordability,” said Eric Leenders, head of personal banking at UK Finance.

Motor finance

The FCA has also highlighted concerns about the rent-to-own market, typically used by consumers to buy fridges, freezers and televisions.

“We think that is a sizeable issue, because people are paying three or four times more than if they used cash,” Mr Bailey told the BBC.

The FCA said that one option might be for housing associations to provide such goods instead.

• FCA considers price cap on rent-to-own agreements

Mr Bailey said there were also concerns about motor finance, a worry already highlighted by the Bank of England.

“We’re looking at affordability tests and the transparency of terms,” he said.

The FCA will publish an update on this work in the first quarter of 2018.

Payday loans

As part of its review into high-cost lending, the FCA also looked at how the cap on payday loans was working.

It said that the cap, first imposed in January 2015, had delivered “substantial benefits” to consumers.

Since then, no one has had to pay more than 0.8% a day of the amount borrowed. The maximum they pay is no more than twice the amount they borrowed.

The FCA said its review found that the cap meant 760,000 borrowers in this market were saving a total of £150m a year, that companies were now less likely to lend to customers who cannot afford to repay, and debt charities were seeing fewer people struggling with ballooning borrowing from payday loans.

Mr Bailey said the FCA would continue to focus its efforts on what else needed to be done in this area.

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The unemployment rate in the eurozone has fallen to its lowest since February 2009, according to the latest official figures.

The rate dropped to 9.1% last month, from a downwardly revised 9.2% in May.

Separately, inflation remained unchanged in July at 1.3%, according to a preliminary estimate from Eurostat, the European Union’s statistics office.

However, core inflation, which excludes food, alcohol and energy prices, rose to 1.2% from 1.1% in June.

Inflation in the 19-nation bloc still remains well below the European Central Bank’s target of close to, but below, 2%.

Unemployment fell in all 19 eurozone member countries except Estonia.

The lowest unemployment rates last month were in Germany at 3.8% and Malta at 4.1%.

Greece has the highest rate of unemployment in the eurozone at 21.7%, and also the highest rate of youth unemployment at 45.5%, although those figures refer to April – the latest data available for the country.

The second highest unemployment rate was 17.1% in Spain, which was down from 19.9% a year earlier.

Spain also had the second highest level of youth unemployment among 15-24 year olds at 39.2%.

ECB policy

The increase in the core rate of inflation had not been expected by analysts.

Signs of recovery in the eurozone have led to much speculation that the European Central Bank (ECB) will soon start to cut back its 2.3 trillion euro (£2 trillion) quantitative easing (QE) programme, which has involved bond buying to try to boost the bloc’s economy and avoid deflation.

ECB president Mario Draghi has previously said that sluggish core inflation and wage growth are reasons to be cautious about reining in the policy.

“Today’s upside surprise in core inflation is likely to give the ECB some comfort, even though its level remains low,” Morgan Stanley economist Daniele Antonucci said. “We expect a QE tapering announcement this autumn.”

However, Connor Campbell, financial analyst at Spreadex, said the markets felt the latest data was not strong enough “to push the ECB in a hawkish direction”, and tighten its policy.

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The UK will not cut tax and regulations after Brexit in a bid to undercut EU rivals, Philip Hammond has suggested.

The chancellor told French newspaper Le Monde that tax raised as a percentage of the British economy “puts us right in the middle” of European countries.

“We don’t want that to change, even after we’ve left the EU,” he added.

It has been viewed as a softer tone from Mr Hammond, who in January said the UK would do “whatever we have to do” post-Brexit to stay competitive.

But Labour said Mr Hammond was “in open dispute” with himself.

BBC political correspondent Chris Mason says that having lost their majority at this year’s general election, the Conservatives would struggle to persuade the Commons to support slashing taxes and regulation.

• Fox holds firm on opposing free movement
• Mapped: The three Brexiteers’ trips

In his latest interview, Mr Hammond told Le Monde: “I often hear it said that the UK is considering participating in unfair competition in regulation and tax.

“That is neither our plan nor our vision for the future.

“I would expect us to remain a country with a social, economic and cultural model that is recognisably European.”

Our correspondent said those words “appeared to be at odds with some of his own comments earlier this year”.

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During an interview in January, Mr Hammond was asked by Welt am Sonntag whether the UK could become a tax haven after leaving the EU.

He said he was “optimistic” about securing a good trade deal with the EU but if this did not happen “you can be sure we will do whatever we have to do”.

“If we have no access to the European market, if we are closed off, if Britain were to leave the European Union without an agreement on market access, then we could suffer from economic damage at least in the short-term,” he said at the time.

“In this case, we could be forced to change our economic model and we will have to change our model to regain competitiveness.”

‘Fake U-turn’

Labour said Mr Hammond was now contradicting what he had said at the start of the year.

“The truth is that the British people will not believe the fake U-turn of a Tory chancellor in a French newspaper, while he is still going ahead with billions of pounds in corporation tax giveaways in this parliament, and refuses to rule out further cuts,” said shadow minister Peter Dowd.

In his latest interview, Mr Hammond also said the UK wanted EU workers be part of the British economy and carry on with their family life in the country, and the same for British expats working in Europe.

He said the bill for Brexit was not a question about money, but how the UK leaves the EU without causing problems for businesses and people.

Breaking up the City of London would benefit New York not Frankfurt or Paris, he added.

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We’ve all received the well-meaning advice to “stay positive.” The greater the challenge, the more this glass-half-full wisdom can come across as Pollyannaish and unrealistic. It’s hard to find the motivation to focus on the positive when positivity seems like nothing more than wishful thinking.

Related: 12 Habits of Genuine People

The real obstacle to positivity is that our brains are hard-wired to look for and focus on threats. This survival mechanism served humankind well back when we were hunters and gatherers, living each day with the very real threat of being killed by someone or something in our immediate surroundings.

That was eons ago. Today, this mechanism breeds pessimism and negativity through the mind’s tendency to wander until it finds a threat. These “threats” magnify the perceived likelihood that things are going — and/or are going to go — poorly. When the threat is real and lurking in the bushes down the path, this mechanism serves you well. When the threat is imagined and you spend two months convinced the project you’re working on is going to flop, this mechanism leaves you with a soured view of reality that wreaks havoc in your life.

Maintaining positivity is a daily challenge that requires focus and attention. You must be intentional about staying positive if you’re going to overcome the brain’s tendency to focus on threats. It won’t happen by accident.

Positivity and your health

Pessimism is trouble because it’s bad for your health. Numerous studies have shown that optimists are physically and psychologically healthier than pessimists.

Martin Seligman at the University of Pennsylvania has conducted extensive research on the topic. Seligman worked with researchers from Dartmouth and the University of Michigan on a study that followed people from age 25 to 65 to see how their levels of pessimism or optimism influenced their overall health. The researchers found that pessimists’ health deteriorated far more rapidly as they aged.

Seligman’s findings are similar to research conducted by the Mayo Clinic that found optimists have lower levels of cardiovascular disease and longer life-spans. Although the exact mechanism through which pessimism affects health hasn’t been identified, researchers at Yale and the University of Colorado found that pessimism is associated with a weakened immune response to tumors and infection.

Researchers from the University of Kentucky went so far as to inject optimists and pessimists with a virus to measure their immune response. The researchers found optimists had a much stronger immune response than pessimists.

Positivity and performance

Keeping a positive attitude isn’t just good for your health. Martin Seligman has also studied the connection between positivity and performance. In one study in particular, he measured the degree to which insurance salespeople were optimistic or pessimistic in their work. Optimistic salespeople sold 37 percent more policies than pessimists, who were twice as likely to leave the company during their first year of employment.

Seligman has studied positivity more than anyone, and he believes in the ability to turn pessimistic thoughts and tendencies around with simple effort and know-how. But Seligman doesn’t just believe this. His research shows that people can transform a tendency toward pessimistic thinking into positive thinking through simple techniques that create lasting changes in behavior long after they are discovered.

Here are three things that I’ll be doing this year to stay positive.

1. Separate fact from fiction.

The first step in learning to focus on the positive requires knowing how to stop negative self-talk in its tracks. The more you ruminate on negative thoughts, the more power you give them. Most of our negative thoughts are just that — thoughts, not facts.

Related: 11 Habits of Mentally Strong People

When you find yourself believing the negative and pessimistic things your inner voice says, it’s time to stop and write them down. Literally stop what you’re doing and write down what you’re thinking. Once you’ve taken a moment to slow down the negative momentum of your thoughts, you will be more rational and clear-headed in evaluating their veracity. Evaluate these statements to see if they’re factual. You can bet the statements aren’t true any time you see words like never, always, worst, ever, etc.

Do you really always lose your keys? Of course not. Perhaps you forget them frequently, but most days you do remember them. Are you never going to find a solution to your problem? If you really are that stuck, maybe you’ve been resisting asking for help. Or if it really is an intractable problem, then why are you wasting your time beating your head against the wall? If your statements still look like facts once they’re on paper, take them to a friend or colleague you can trust and see if he or she agrees with you. Then the truth will surely come out.

When it feels like something always or never happens, this is just your brain’s natural threat tendency inflating the perceived frequency or severity of an event. Identifying and labeling your thoughts as thoughts by separating them from the facts will help you escape the cycle of negativity and move toward a positive new outlook.

2. Identify a positive.

Once you snap yourself out of self-defeating, negative thoughts, it’s time to help your brain learn what you want it to focus on — the positive.

This will come naturally after some practice, but first you have to give your wandering brain a little help by consciously selecting something positive to think about. Any positive thought will do to refocus your brain’s attention. When things are going well, and your mood is good, this is relatively easy. When things are going poorly, and your mind is flooded with negative thoughts, this can be a challenge. In these moments, think about your day and identify one positive thing that happened, no matter how small. If you can’t think of something from the current day, reflect on the previous day or even the previous week. Or perhaps there is an exciting event you are looking forward to that you can focus your attention on.

The point here is you must have something positive that you’re ready to shift your attention to when your thoughts turn negative. Step one stripped the power from negative thoughts by separating fact from fiction. Step two is to replace the negative with a positive. Once you have identified a positive thought, draw your attention to that thought each time you find yourself dwelling on the negative. If that proves difficult, you can repeat the process of writing down the negative thoughts to discredit their validity, and then allow yourself to freely enjoy positive thoughts.

3. Cultivate an attitude of gratitude.

Taking time to contemplate what you’re grateful for isn’t merely the “right” thing to do; it reduces the stress hormone cortisol by 23 percent. Research conducted at the University of California, Davis, found that people who worked daily to cultivate an attitude of gratitude experienced improved mood, energy and substantially less anxiety due to lower cortisol levels.

Related: 10 Fundamental Truths That Will Change Your Life

You cultivate an attitude of gratitude by taking time out every day to focus on the positive. Any time you experience negative or pessimistic thoughts, use this as a cue to shift gears and think about something positive. In time, a positive attitude will become a way of life.

Bringing It All Together

I realize these three tips sound incredibly basic, but they have tremendous power because they train your brain to have a positive focus. They break old habits, if you force yourself to use them. Given the mind’s natural tendency to wander toward negative thoughts, we can all use a little help with staying positive.

A version of this article appeared on TalentSmart.

It’s not out of the ordinary to come across a spider or fruit fly in the office. However, what would you do if that visitor were instead a snake?

Related: 5 Ways Insightful Leaders Keep Their Teams Working Calmly During Tumultuous Change

Well, first thing’s first: keep calm and don’t panic. At least, that’s what you can learn from this woman who calmly captured a snake at her office. While at work, journalists from Channel Nine in Darwin, Australia, discover a python behind their computers. But rather than panic, employees handled the situation with precision, agility and grace.  

Unflinchingly and without a sound, an Australian woman, reportedly the station’s program manager, used a piece of wire to pull the snake out then grabbed it with her hands and calmly placed it into a shopping bag.

Related: 10 Ways Smart People Stay Calm

“My first suggestion to get rid of it was to burn the place down but no one else went for it,” said Channel Nine news director Kate Limon. “I was googling (a snake catcher) to call ASAP but turns out our program manager is a wildlife warrior… In her bloody floral dress and heels — she put us all to shame.”

So if a snake happens to show up in your office, here’s how you can save the day:

Hey @TheNTNews – you put snakes on your front page, but we catch them in our office. Whatevs. ??? pic.twitter.com/UX3HSyG334

— Kate Limon (@KateLimon9) July 31, 2017

Service-based businesses seem to have more trouble with leveraging some of the most powerful networks, such as Instagram, because they’re lacking ideas on what to post.

While it may seem like product-based businesses got an easier time promoting themselves on visual-first platforms, by the end of this article, you’ll have no issues with filling up your whole content calendar with exciting ideas.

Related: 8 Unconventional Ways to Grow Your Instagram Following

1. Show your expertise.

People love to follow brands and accounts that they find valuable in some way. What’s a better way to provide value that sharing helpful advice?

To position yourself as an expert in the field, share tips, hacks and shortcuts. While you may think that what you know, everyone knows as well it is not true. Don’t dismiss any tips as “too obvious,” because again, while it may seem obvious to you, it may not seem obvious to your potential and current clients. Because you have a constant exposure to the same activity, skill, or industry, you’ve accumulated more knowledge than you know.

You can share tips as overlays on pretty images or as infographics. You may also record a 15-second video where you talk, or better yet, show the tip. If you’re not feeling creative, share a nice image and simply put your tip in the caption section.

Related: How Social Media Marketing Generated $7 Million in Affiliate Sales for This Entrepreneur

2. Inspire with success stories.

As a business owner, you have to have at least a few success stories in your business. Share your clients’ stories. It may be as simple as a written or recorded testimonial; it may be a mini-case study where you talk about your strategies for achieving success.

It’s even better if you can share before and after image. Health and weight coaches, dermatologists, hair stylists, nail technicians, seamstresses can all post images that speak louder than words on their expertise in the field. Clearly, get a client’s permission first and run with it!

Related: 7 Marketing Tips to Help Grow Your Brand on Instagram

3. Inspire with quotes.

Quotes are some of the most engaging types of content. We all have our newsfeeds flooded with quotes, yet we always seem to engage with them. This is not to say you have to flood your clients with philosophical quotes, but once in a while, definitely take advantage of these engagement boosters.

Related: 5 Tactics for Selling More Effectively on Instagram

4. Make them smile.

You can always brighten someone’s day with a funny image or a joke. Make sure it’s kind though, so you won’t land in hot water for your sense of humor. Also, make sure people outside of your industry will understand the joke. Think what all people will relate to. Is it getting out of bed on Monday or leaving work on Friday? We all have recurring themes in our lives.

Related: 4 Tips to Leverage the Power of Instagram to Grow Your Email List

5. Raise the curtain.

The same way a product-based business can show off their design meeting or production line, you can show the process behind your business. What do you do during onboarding period of a new client? What questions do you ask them? What kind of research you’re required to perform beforehand?

If you do have before and after photos, you could also tie it together with a quick video of “in between,” of the process that got your client from point A to point B. This is also a great opportunity to differentiate your business from competition by highlighting how your processes are better than industry standards.

Related: Marketers Are Searching for Instagram Services 12X More Than Snapchat’s (Infographic)

6. Sell the solution to their problems.

People oftentimes flock to social media for aspirational content. Think of your brand not only as a list of services you perform, but as a lifestyle you enable your clients to have. Are they enjoying greater financial freedom? Having better health? Having more time to spend with their families? Feeling more confident in their own skin? All of these are great aspirational messages you can portray through images.

While you may not have a tangible product, you bring tangible results. Your business is solving real problems your clients are facing. Get a bit creative; and you’ll discover a million ways to let your business shine.

We all sell, even if the word “salesperson” is not part of our job description. And to many entrepreneurs, the sales process is a great mystery. How does a non-salesperson sell? The answer — keep it simple.

Here are three key items to discuss with your customers. From these, you can design a “non-salesperson’s” sales presentation. They are simple, they are straightforward, and they help you understand your customer’s needs — which will help you offer an ideal solution.

Related: The 3 Most Important Skills in Sales

1. “Tell me what first got you thinking about …”

Begin your discussion with a consultative approach to help you understand your customer’s current dilemma.

What happened before they contacted you? What was the trigger event that initiated their interest in your product or service? What problem in their life is driving them to look for a solution? You can build an entire sales presentation around the information gathered from this one query. It’s that powerful.

Note: This discussion can open the door for follow-up questions like, “Tell me more about that” or “Why do you feel that way?”

2. “Tell me how you want to feel when your problem is solved.”

You have identified the problem the customer is moving away from. Now, you’re attempting to discover what the customer wants to move toward. By having your customer describe their ideal future state, you connect with them on an emotional level.

Related: 6 Ways to Build a Billion-Dollar Sales Machine

At times, the customer’s future state will be crystal clear. But in many cases, it will still be somewhat vague. By having the customer describe how they want to feel, you can gain insight into what they want their future to look like. At this point, you can share the benefits and values of your product or service, including all the terms. That will lead you to step three — the opportunity for your customer to purchase.

3. “Let me explain the process to you.”

Having identified the problem (step one) and shown your customer the best solution (step two), you can move on to explain the purchase process.

Keep this very simple and just hit the highlights. Make it easy and exciting. “Should you decide to purchase, let me walk through the steps with you. The first thing we would do is …” Share a half dozen or so top-level steps in the process, and then go back to step one and ask if that’s the step they wish to take.

Example: “So the very first step is to sit down and write a purchase agreement. Is that what you want to do?” It’s a simple yes or no question. It’s not scary or manipulative or tricky. You’re simply asking for the commitment to take the next step in the process.

Related: The Science Behind the Sales Funnel

The sales process isn’t as complex as some people make it sound. Even “non-salespeople” can do it. Keep it simple. Design your conversation around these three basic questions. If you do, it will put you on the fast track to changing your customer’s world.