HSBC to pay $1.57bn to settle class action; Tesco confirms sale of Dobbies

London’s FTSE 100 was expected to open 49 points higher than Thursday’s close at 5,999.

Stocks to watch

HSBC said it will pay $1.57bn to end a class action lawsuit over its 2003 purchase of Household International that could have exposed it to $3.6bn in payouts.

The bank said it would take a pre-tax charge of around $585m in the second quarter.

HSBC merged Household International with another unit to create HSBC Finance. The business lent money to people with poor credit histories.

Retail giant Tesco confirmed the sale of its Dobbies Garden Centres chain on Monday, to an investor group led by Midlothian Capital Partners and Hattington Capital.

The FTSE 100 firm said the sale represents the entire share capital of Dobbies, with Tesco receiving £217m in cash to be used for general corporate purposes.

Tesco purchased Dobbies Garden Centres in 2007, and has grown it to become the UK’s second-largest specialist garden centre operator with 35 sites across Scotland, England and Northern Ireland.

In the press

MPs are calling for National Grid, the company that runs Britain’s electricity system, to be broken up in a radical move they say could transform the UK’s energy supply. Members of the cross-party energy select committee have said they believe that National Grid, which is one of Britain’s 20 biggest companies with a market value of £36bn, faces too many conflicts of interest and should be split up. – Financial Times

Barclays has branded accusations of fraud levelled by financier Amanda Staveley against the bank as “fundamentally misconceived”, court documents show. Ms Staveley is suing the bank for £721m in fees she claims her company PCP Capital Partners is owed for work on Barclays’ £5.8bn fundraising in 2008. – Telegraph

Auditors are chasing a £10bn wave of professional services work that is expected to change hands as a result of long-awaited rules to make accountants more independent of their biggest clients. The EU regulations come into force on Friday, five years after they were proposed, forcing large companies to put their audit contract out to tender at least once every decade, and change provider every 20 years. – Telegraph

Britain’s reputation as a nation of shopkeepers may be in peril after the number of convenience stores fell sharply in the past year. Fresh figures from the Local Data Company (LDC) show that 300 of the stores in 228 towns closed last year as a result of structural change in the grocery sector and increased competition. – The Times

A For Sale sign linked to Warren Buffett could soon be appearing in your neighbour’s garden after the real estate division of the famous investor’s company Berkshire Hathaway announced plans to move into UK market. Berkshire Hathaway HomeServices is a national real estate chain that operates solely in the United States using a franchise model that comprises 14,000 agents across 1,200 offices in almost every state in the country. Now the company is setting its sights on the wider world. – The Times

US close

US stocks snapped their five day losing streak on Thursday, with the major indices led higher by telecoms.

The Dow Jones Industrial Average closed up 92.93 points to 17,733.10, with Merck leading the risers and Nike dragging the losers.

Telecoms led nine sectors higher on the S&P 500, which closed up 0.31% at 2,077.99, while the Nasdaq finished up 0.21% at 4,844.91.