The urge to merge

September 12: Hi. Chris Hughes here today instead of Charlie. The urge to merge that has gripped European banks has now pushed Portman, the UK’s number three building society, into the arms of Nationwide, the number one. The deal creates a mutual goliath with £150bn of assets. It looks like an attempt to strengthen Nationwide’s status as a serious customer-owned competitor to the UK’s big four banks. Mortgages are a commodity product, so the resulting scale economies should help Nationwide - as the combined group will be called - keep up with the pack. Portman may lose its name, but it has secured generous financial terms and nabs five seats on the board. That may tempt the UK’s other building societies to ask whether now is a good time to sell up.

Peter Burdon is to step down as chief executive of Thorntons, the chocolate maker said on Tuesday, as it also reported a 36 per cent fall in pre-tax profit for the full year. No reason has been given for Mr Burdon’s move. It follows the appointment of turnaround specialist John von Spreckelsen as chairman in June.

French Connection fell into its first loss in 14 years after profit margins plunged when the fashion chain was forced to resort to discounting to clear excess inventory. The loss comes after a string of profit warnings for the company, which this year ditched its FCUK logo after a backlash against the brash branding campaign. A new television ad featuring two women fighting and kissing failed to win back customers and prompted the company to drop its advertising agency.

Two significant companies floating soon have announced their pricing today. Aer Lingus plans to list in Dublin and London at €2.10-€2.70 a share. Hogg Robinson, the travel agent, has set a wider range of 140p-220p a share.

The rest of our newslist so far is dominated by results. Drax, which owns Europe’s largest coal-fired power station, said its first half earnings more than tripled thanks to rising electricity prices and plans to return more than £300m to shareholders. Charter benefited from strong European and North American sales. Evolution’s first half profits are up 10 per cent. Cobham also saw profits rise, as did Redrow and Computacenter.

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