Raphael Stevens

The U.K. finance sector made minimal headway in closing the gender pay gap last year, with some banks stalling — or even undoing — progress.
Several banks are paying women less than two thirds of men’s earning, according to company filings on the government’s Gender Pay Gap Service site.
Britain’s finance industry had an average gender pay gap of 22.7% in 2022-23, only marginally below the 23% reported in 2021-22.

The U.K. finance sector made minimal headway in closing the gender pay gap last year, with some banks stalling — or even undoing — progress, according to new data.
Glyn Kirk | Afp | Getty Images

The U.K. finance sector made minimal headway in closing the gender pay gap last year, with some banks stalling — or even undoing — progress by paying women less than two thirds of men’s earnings, new data shows.
Britain’s finance industry had an average gender pay gap of 22.7% in 2022-23, only marginally below the 23% reported in 2021-22, according to filings published on the government’s Gender Pay Gap Service site.

Under U.K. law, companies, charities and public sector departments with 250 employees or more have had to publish annual gender pay gap figures since 2017.
The finance sector reported the nation’s second-widest average gender pay gap last year, ranking just behind the 23.2% of the education sector.
Banks had the greatest gap among larger finance companies, according to a CNBC analysis.

How banks stack up

HSBC Bank PLC had the largest gender pay gap among reporting U.K. banks, with women’s median hourly pay coming in 51.1% lower than that of men — compared with 29% in 2017-18.
Within its ringfenced U.K. unit, HSBC UK Bank PLC — which now has a comparably larger workforce — the gap was 20.3%.

At Barclays Bank PLC, women’s reported hourly pay came in 35% lower than that of men. In its ring-fenced U.K. unit, Barclays Bank UK PLC, women were paid 14.8% less.
Lloyds Banking Group’s gap came in similarly high at 34.8%. At NatWest, women earned 31.6% less than men did, based on their median hourly pay. Meanwhile, at Standard Chartered Bank, women’s pay was 24.8% lower.
At Morgan Stanley UK Limited the gap was 18.7%, while at Morgan Stanley & Co. International PLC it was 36.1%. Within JP Morgan Chase Bank National Association, the gap was 17.1%.
Several other banks were not required to report due to the size of their U.K. operations.
In statements published alongside their filings, the banks indicated that a lack of women in senior positions had added to the gaps.

Most industries failing to close the gap

The U.K. gender pay gap remains stubbornly entrenched, despite ongoing calls to reduce gender inequality and numerous studies highlighting the economic benefits of doing so.
Across all sectors, as many as eight in 10 U.K. employers paid men more on average than they did women, according to BBC analysis of the data.
In 2023-23, the median gender pay gap across all reporting firms was 9.4% — the same level as in 2017-18, when mandatory pay gap reporting began.
The gap rose to 10.5% briefly in 2019-20, but has failed to fall below current levels.
Among the better performing sectors were manufacturing, retail, health and social care, and arts and entertainment, all of which had median gender pay gaps below the national average. More

A FedEx delivery man is seen on Chestnut Street in San Francisco on January 11, 2023 as atmospheric river storms hit California, United States.
Tayfun Coskun | Anadolu Agency | Getty Images

Check out the companies making headlines before the bell Wednesday.
Johnson & Johnson — The pharmaceutical giant climbed 2.6% after announcing Tuesday it will pay $8.9 billion over the next 25 years to settle claims that the talc in its baby powder and other products caused cancer. J&J also refiled for bankruptcy protection for its LTL Management subsidiary and said it continues to believe the claims lack merit.

related investing news

Zions Bancorporation — Shares of Zions Bancorporation rose 3.2% after Baird upgraded the regional bank stock to an outperform rating. The firm said shares are trading at attractive levels not seen since the global financial crisis.
Clean Energy Fuels — The stock was 3.6% higher after Raymond James upgraded Clean Energy Fuels to outperform and assigned it a $6 price target, suggesting shares stand to gain about 42.8% from Tuesday’s close.
Albemarle — Albemarle shed 3.3% after Bank of America downgraded the chemicals manufacturing stock to underperform from neutral. The bank significantly cut its earnings forecast for Albemarle and lowered its price target to $195. The new target implies the stock could fall about 7% from Tuesday’s close.
Lamb Weston — Shares of the potato processing giant were up about 1% ahead of the company’s scheduled earnings release on Thursday. Bank of America included Lamb Weston in its recent list of short-term stock picks for the second quarter, saying it is optimistic the company will beat consensus earnings estimates.
FedEx — Shares of the shipping company gained 3.1% in premarket trading after FedEx announced a dividend hike and a corporate reorganization. FedEx said it will raise its dividend by 10%, consolidate its different business divisions and change its executive compensation packages.

Exelixis — Shares of the biotech company added 1% after The Wall Street Journal reported that hedge fund Farallon Capital Management is planning to wage a proxy battle at Exelixis.
— CNBC’s Jesse Pound, Samantha Subin and Michelle Fox Theobald contributed reporting. More

The 1,128 shareholders gathered in Basel are seeking clarity on the board’s plan following the “shotgun wedding” between Switzerland’s two biggest banks, which remains mired in controversy, legal peril and public skepticism.
New CEO Sergio Ermotti takes the reins on Wednesday after his shock reappointment last week, as UBS takes on the mammoth task of integrating its fallen compatriot’s business.

BASEL, Switzerland – April 5, 2023: UBS Chairman Colm Kelleher addresses shareholders during the UBS annual general meeting in Basel, its first since the bank’s emergency rescue of Swiss rival Credit Suisse.
FABRICE COFFRINI/AFP via Getty Images

UBS sought to reassure investors at its annual general meeting on Wednesday against a fraught political backdrop following its takeover of fallen rival Credit Suisse last month.
The 1,128 shareholders gathered in Basel were looking for clarity on the board’s integration plan after the “shotgun wedding” between Switzerland’s two biggest banks, which remains mired in controversy, legal peril and public skepticism.

UBS Chairman Colm Kelleher told the audience that March 19, the date of the emergency rescue of Credit Suisse from the brink of collapse, was a “historic day and a day we hoped would never come.”
But he said the merger also presents “a new beginning and huge opportunities ahead for the combined bank and the Swiss financial sector as a whole.”
He emphasized UBS’ continued focus on its wealth management and Swiss business and confirmed that the bank would reduce the capital allocated to its investment arm to below 25% of risk-weighted assets.
“Whilst we did not initiate these discussions, we believe that this transaction is financially attractive to UBS shareholders,” Kelleher said, while acknowledging there is a “huge amount of risk” associated with the integration.

The Credit Suisse integration is expected to take around three to four years, excluding Credit Suisse’s non-core investment bank portfolio. Kelleher said the bank expects to remain well capitalized and “significantly above” its capital targets by the time the deal closes.

New UBS CEO Sergio Ermotti began his second tenure on Wednesday after his shock reappointment last week, with the board having decided that he was the right man to lead the mammoth task of integrating the bank’s fallen compatriot’s business.
Ermotti’s return was seen by many commentators as an attempt to restore calm, as the country’s long-established reputation for financial stability teeters on the brink.
UBS reported a full-year profit of $7.6 billion in 2022, and its shares remain up more than 10% since the turn of the year.
Concerns remain over the scale of the new entity, which will have more than $5 trillion in total invested assets, and whether it creates too much concentrated risk for the Swiss and global economy.

Reports have suggested that UBS’ plans may include job cuts of around 20-30% of the combined entity’s global workforce, but the bank’s Vice Chairman said Wednesday that it was too early to offer any concrete estimates.
Credit Suisse held the final independent AGM in its 167-year history in Zurich on Tuesday, after Swiss authorities brokered an “emergency rescue” in late March, when the bank’s share price tumbled and depositors fled en masse.
The board was angrily confronted on Tuesday by shareholders demanding answers and accountability over the 3 billion Swiss franc ($3.3 billion) deal, which was rushed through over the course of a weekend and denied both UBS and Credit Suisse shareholders a vote.
Credit Suisse Chairman Axel Lehmann said he was “truly sorry” to shareholders, clients and employees, and suggested the bank’s turnaround plan after years of losses, scandals and compliance failures had been on track until turmoil in the U.S. banking sector sparked a flight of confidence.

Peter V. Kunz, chair in Economic Law and Comparative Law at the University of Bern, told CNBC on Wednesday that the mood in Basel was “totally different” to that in Zurich on Tuesday.
“Yesterday, people were angry, they were frustrated. Basically, CS shareholders were the losers. Here, you see the winners,” he told CNBC’s Joumanna Bercetche outside the meeting.
“They are gleeful, they are happy, they see the prospects of the future, some might even be triumphant because there was some bad blood between these two banks. They were rivals,” Kunz added, though he acknowledged that some shareholders remain uncertain about the outlook for the combined entity.
The Swiss Federal Prosecutor is investigating the state-backed takeover for potential breaches of Swiss federal law by government officials, regulators and top executives.
Swiss regulator FINMA held a press conference on Wednesday setting out why the forced merger was the best possible outcome, and laying the blame squarely at the door of Credit Suisse management. More

Bank failures are usually bad for business. A sickly banking system will lend less and at higher interest rates to companies in need of capital. A credit crunch will crimp economic growth and therefore profits. On occasion, a bad bank can blow up the financial system, causing a cascade of pain. Investors know this. They have dumped stocks when banks have failed before. In May 1984, the month that Continental Illinois, a large bank in the Midwest, failed and was rescued by the Federal Reserve, the Dow Jones, then the leading index of American stocks, dropped by 6%. In September 2008, when Lehman Brothers, an investment bank, went bust, stocks slid by 10%. During the Depression, as one bank after another failed, the stockmarket shed 89% between its peak in September 1929 and its trough in July 1932. This time around things have been different. In March, a month in which three American banks failed, deposits fled small institutions across the country. A 167-year-old Swiss bank was forced by regulators into a hasty tie-up with a bigger rival. Yet the s&p 500 index of American stocks gained 4%—a handsome return, well above the long-term monthly average of around 0.5%. Nor was the cheer confined to America: European stocks rallied by 3%. The happiest interpretation of these events is that the collective wisdom of the market deduced the danger was over. Regulators rode to the rescue, arranging deals, guaranteeing deposits and extending emergency-lending facilities for banks that found themselves on shaky ground. Inferring the mindset of investors from the way markets move is more art than science. But is this really what people think?Perhaps not. First, it is clear from how interest-rate markets have behaved, as well as from the way that different types of stocks have moved in different directions, that investors are not betting on all being well with the banking sector or the economy. What they are betting on is rate cuts. The reason that overall indices of stocks rallied is because gains in the share prices of the firms that have been most sensitive to higher rates—namely, the tech giants, including Apple and Microsoft—have more than offset the slump in bank and financial-share prices that dragged indices south. This is most obvious from the performance of the Nasdaq, a tech-heavy index, which rallied by 7% in March. Second, individual investors, who tend to get sucked in during the market’s fizziest periods, seem to be moving to the sidelines. Retail-trading flows have been elevated since the start of 2021, when the frenzy over GameStop, a retailer, stoked the enthusiasm of huge numbers of individual investors. These traders piled into stocks earlier this year, buying, on net, a record $17bn of shares in the first two weeks of February, according to Vanda, a data provider. But their activity collapsed along with Silicon Valley Bank. In the last two weeks of March individuals purchased just a net $9bn of stocks, the lowest amount since late 2020. Third, and most telling, is what is happening with “swaptions”, or interest-rate derivatives. These allow investors to place long-shot bets on what might happen to interest rates, which many use as a form of insurance for their portfolios: staying long on stocks, say, but buying a handful of swaptions that will pay out in size if something goes horribly wrong. In early March swaptions markets were balanced. Investors were paying just as much to bet on the Fed raising rates above 6% by the end of the year as they were on it cutting rates to below 4%. But now investors are paying to protect themselves against doomsday scenarios. The cost to buy a derivative that pays out if the Fed “capitulates”—if interest rates are cut by around two percentage points by December—is double that to buy one that pays out if rates climb above 6%.All this indicates an unease that is masked by headline share-price buoyancy. Towards the end of monetary-tightening cycles, investors are prone to adopting a “bad-news-is-good-news” mentality, where any indication of difficulty in the economy is counter-intuitively their friend, since it indicates central bankers might back off interest-rate rises (or even cut rates). But the waning enthusiasm of retail investors and the rush to insure against catastrophe implies that investors remain worried this bout of bad news could be straightforwardly bad. The pickup in share prices indicates that investors are hoping for the best. Activity elsewhere suggests they are also preparing for the worst. Read more from Buttonwood, our columnist on financial markets:Did social media cause the banking panic? (Mar 30th)Why markets can never be made truly safe (Mar 23rd)Why commodities shine in a time of stagflation (Mar 9th)Also: How the Buttonwood column got its name More