In 2018, Brexit was the near-constant backdrop to investors’ decision-making. It also proved instrumental in shaping the political instability that was one of the catalysts for the FTSE 100’s weak performance (one of my few accurate forecasts for last year). What does 2019 have in store for the City’s power brokers? Here are my 10 predictions.
Bill Winters’ last roll of the dice
This will be among the most important years of Bill Winters’ career. Banking and financial services company Standard Chartered will announce a substantial cost-cutting programme alongside its annual results during the first quarter, but it won’t be sufficient to assuage restive investors including Temasek Holdings, the Singaporean sovereign investment company that has seen more than a decade of weak returns. Expect a further StanChart management reshuffle under chief executive Winters in a last roll of the dice.
Backlash against switching to Sonia
I expect the implementation of ring-fencing for the UK’s five largest banks to pass smoothly, notwithstanding some ratings agency revisions that will drive up funding costs. But the most important regulatory reform of 2019 will be banks’ preparations for the transition from the London Interbank Offered Rate of interest to the Sterling Overnight Index Average, and an industry backlash that will spur an extension to its wholesale adoption beyond Libor’s 2021 cut-off.
