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Lloyds Banking Group has warned that its ability to make money this year will be constrained by fierce competition in the mortgage market as it reported a drop in annual profits.

A combination of record-low interest rates, rising competition and increased regulation since the financial crisis has forced other major lenders like Nationwide to scale back their mortgage lending. But up to now Lloyds has offset weakness in the mortgage market with growth in higher-returning areas such as unsecured consumer lending. A previously announced £2.5bn charge related to payment protection insurance also weighed on its returns. 

Briefly 

Diageo has been fined $5m by the US securities regulator after “materially misleading” investors about demand for its drinks by concealing sales of unwanted stock to distributors. The Securities and Exchange Commission said the North American arm of the world’s largest spirits maker had been charged with violating securities law by failing to disclose key information to shareholders.

The soaring price of palladium helped Anglo American report better than expected annual results on Thursday. Earnings before interest, tax, depreciation and amortisation — the figure most closely watched by analysts — rose 9 per cent to $10bn, roughly $100m higher than consensus forecasts.

Job moves 

Katharine Poulter, current chief operating officer of Laura Ashley, has been appointed as chief executive officer with immediate effect. Ms. Poulter has 25 years of retail experience with companies including Marks and Spencer, Home Retail Group, Kingfisher, Habitat and Wilko. She succeeds Kwan Cheong Ng who will become a non-executive director. The retailer also reported widening losses and falling sales for the 26 weeks to December 31.

Axa has replaced the head of Axa XL, the business created in 2018 after the French group bought Bermuda-based XL. Greg Hendrick, who had been chief operating officer of XL Group and stayed on to lead the business after the deal, will be replaced by Scott Gunter who joins from rival insurer Chubb.

Beyond the Square Mile 

UBS has appointed ING chief executive Ralph Hamers (pictured above) to replace Sergio Ermotti, one of Europe's longest-serving bank bosses. Mr Hamers will take over on November 1 from Mr Ermotti, who has spent almost nine years turning round the Swiss lender after it was bailed out during the financial crisis and creating the world’s largest wealth manager with $2.6tn in assets.

Big tech companies will be forced to open up their troves of data to smaller rivals, the European Commission has said, just as financial services companies already do. The proposals are aimed at breaking apart monopolies such as Amazon and Google but are likely to add to the growing sense of US irritation that Europe is picking on its tech champions.

French prosecutors have ratcheted up their investigation into the alleged misuse of funds at Renault by Carlos Ghosn, the carmaker’s former boss and fugitive from Japanese authorities. The Nanterre prosecutor’s office said in a statement on Wednesday evening that it had opened a probe into suspicious financial flows linked to Renault by an unnamed person, including the abuse of corporate assets, abuse of trust and money laundering between 2009 and 2020.

Closing quote — essential comment before you go

Lex
The bet by Britain's best known hedge fund manager Crispin Odey on the eccentric Yorkshire mining venture Sirius Minerals highlights a declining trend among investors — stock picking.

Lombard 
Metro’s new broom has more mess to sweep up than most, following the departure of chairman Vernon Hill amid a toxic combination of accounting whoopsies and governance worries.

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