UK News

Press Round-up – February 10

RBS pensioners latest victims of cost cutting Pensioners of Royal Bank of Scotland have become the latest victims of the state-backed lender’s push to cut costs after being informed the annual lunch programme for former staff had been cancelled. (Telegraph)

Barclays wins role in Glencore merger Last-minute lobbying by Barclays has secured it a role advising on the mega-merger of trading giant Glencore and miner Xstrata after originally being left off the advisory roster for the £54 billion deal. (Telegraph)

Libor probe discovers Citigroup took big hit Citigroup was forced to write off $50 million after two traders accused of attempting to influence global lending rates left the bank, according to people familiar with a worldwide investigation that is gathering pace. (FT)

Indonesian Bumi investors confident of compromise The Indonesian shareholders in coal miner Bumi are open to a compromise that would see financier Nat Rothschild stand down as co-chairman of the company but remain on its board, according to people familiar with the matter.  (FT)

Rio Tinto chief waives bonus Rio Tinto’s chief executive has decided to waive a bonus of up to 2 million pounds because of a disastrous acquisition that happened on his watch. (Times)

Paris to invest directly in Dexia to salvage deal The French government is to invest directly in the municipal finance unit of Dexia, the stricken Belgian bank, in order to salvage a deal to regularise lending to cash-strapped French local authorities.   (FT)

Lehman estate sues Citi The Lehman Brothers estate has sued another of the defunct investment bank’s former counterparties, this time Citigroup, for $2.5 billion for cash taken in the period leading up to its bankruptcy that it wants returned.  (FT)

Press Round-up – February 9

Trustees emptied pension funds to gamble on property Pension experts were appalled on Wednesday when it was disclosed that a company pension fund had been effectively hijacked by its trustees, who sold its conventional assets, geared up the proceeds with bank debt and bet almost the whole lot on speculative property developments. (Times)

Japan lines up national chip champion Three Japanese semiconductor manufacturers including Panasonic and Fujitsu are in talks to merge their operations to create a national champion chipmaker that would be backed by the government, according to people familiar with the matter. (FT)

U.S. bows to pressure on tax rules The U.S. has eased onerous reporting requirements on overseas financial institutions, which it had sought to impose as part of a global crackdown on tax evasion.  (FT)

UK and Asia probe into rigging of lending rates Almost a dozen traders and brokers in London and Asia have been fired, suspended or put on leave by their employers as a multinational probe into alleged manipulation of crucial global lending rates accelerates.  (FT)

GM restructuring plans threaten UK workers Workers at one of Britain’s largest car plants are facing new concerns about their future as General Motors considers restructuring its loss-making European arm with “everything on the table”. (Telegraph)

Facebook rolls out timeline-linked ads Facebook has found a way to monetise its new Timeline feature less than five months after launching it, repackaging what people “listen” to, “watch,” and “read” into ads and delivering them to their friends. (FT)

Groupon records record loss in results Groupon has disappointed investors with its first quarterly financial results since it went public, reporting a loss that was well below the profits analysts had expected. (FT)

Press Round-up – February 8

RBS boss says restructuring has cost 38 billion pounds Stephen Hester has revealed that the dramatic restructuring of Royal Bank of Scotland has cost 38 billion pounds in a rallying memo to staff days after the embattled chief executive waived a 1 million pound bonus. (FT)

Misys and Temenos agree on merger terms Misys and Temenos have reached agreement on the key terms of a proposed 2 billion pound merger that would create the world’s largest supplier of risk-management computer software to banks.   (FT)

Little Chef set for administration British roadside restaurateur Little Chef will be put through administration after its private equity owner said talks with landlords to leave its unprofitable sites had collapsed. (Times)

Xstrata CEO urged to waive bonus payment Glencore Chief Executive Mick Davis has been put on notice to waive his $17.46 million bonus for the completion of Xstrata’s $86 billion merger with Glencore. (Times)

Osborne pledges battle against ‘anti-business culture’ British finance minister George Osborne says the UK government is determined to fight an anti-business culture as ministers seek to fend off criticism from high-profile financial figures of their handling of bonuses at Royal Bank of Scotland and Network Rail. (Guardian)

US banks snap up mortgage products Banks have been responding to low interest rates by snapping up billions of dollars of bundled mortgage products that resemble the sliced-and-diced debt blamed for the financial crisis.  (FT)

Two bidders left in running for RBS asian units Just two bidders remain in the running to buy Royal Bank of Scotland’s Asian equities, mergers and acquisitions and research businesses, after three potential buyers dropped out of the race. (FT)

Press Round-up – February 7

EU corporate defaults set to rise European corporate defaults are widely expected to climb sharply this year despite the recent improvement in credit market sentiment as bank lending cuts and a deteriorating economic backdrop put many smaller or indebted companies under pressure. (FT)

Prices cut, shops shut: still no cheer on the high street British shoppers reverted to a bunker mentality over the new year, according to gloomy sales figures that quash any hope of consumers pulling the economy clear of a double-dip recession. (Times)

BAE considers reducing price of Typhoon jets BAE Systems, Europe’s largest defence contractor, has signalled its willingness to reduce the price of the Eurofighter Typhoon to win back a $20 billion Indian tender from France’s Dassault. (FT)

China says it will ignore EU carbon charge China has banned its airlines from complying with a European scheme to limit carbon emissions, saying that it would infringe its sovereignty. (Times)

Greece bailout funds could be split European officials are insisting any new Greek bailout programme specifically earmark funds to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets. (FT)

Italy’s Ferragamo sets UK retail rent record A record for the most expensive shop rent in the UK has been set with Italian fashion brand Salvatore Ferragamo agreeing to pay nearly 1,000 pounds a  square foot a year for part of its space on Bond Street in a sign of rising demand for a presence on London’s most prestigious shopping thoroughfare. (FT)

Fund aims to link Hollywood films with China Bruno Wu, the Chinese media entrepreneur, and Harvest Fund Management, an investment group backed by Deutsche Bank and China Credit Trust, have set up a new private equity fund aimed at pouring up to $800 million into Hollywood films. (FT)

Press Round-up – February 6

Tesco Bank delayed until next year Tesco Bank has delayed the launch of its current account until next year. Its much vaunted arrival had been regarded as a symbolically important breakthrough in attempts backed by ministers to break up the dominance of the big five established UK banks. (Times)

RBS looks to defend SME lending record Royal Bank of Scotland is preparing to mount a vigorous defence of its lending record to small and medium-sized businesses in an effort to stave off criticism over its failure to meet certain government-set targets last year. (FT)

Credit Agricole launches new financial model Credit Agricole is launching a new financing model in its corporate and investment bank which will allow France’s third-largest lender by market value to continue project and trade finance, despite upcoming unfavourable capital rules, according to the unit’s chief executive. (FT)

Europe’s banks face capital challenge The European Banking Authority is to challenge a significant proportion of the capital restructuring plans put forward by the continent’s leading banks to meet tough new capital requirements, say three people familiar with the process. (FT)

Vodafone set to abandon Greek merger Vodafone is set to abandon attempts to merge its Greek business with rival Wind Hellas in the face of concerns among regulators about the precedent being set by allowing a duopoly in a European mobile market. (FT)

EC may probe ‘Glenstrata’ deal Xstrata and Glencore could face an unexpected competition hurdle to their proposed 50 billion pound merger, with the EU poised to ignore an earlier ruling that would have avoided an investigation. (Telegraph) Scotland not guaranteed triple A rating status An independent Scotland would not be able to count on receiving triple A status, credit rating agencies have told the Financial Times, potentially leading to higher borrowing costs for it if a referendum on independence was successful. (FT) Facebook to tap mobile ads for revenue Facebook is set to begin showing advertisements to users on mobile devices within weeks in an effort to tap a new source of revenues before it goes public. (FT) Dubai abandons massive debt restructuring Dubai’s government has walked away from the $10 billion debt restructuring of one of its biggest conglomerates, leaving creditors, including the Royal Bank of Scotland <RBS.L>, with exposure to potentially big losses. (Telegraph) Lion Capital in talks about Findus breakup Private equity investor Lion Capital is in advanced talks to break up Findus in a move to avoid breaching the terms of the UK frozen food maker’s 700 million pound debt load. (FT)

Madrid prepares for privatisation spree Madrid’s local government is quietly preparing a multibillion euro privatisation programme that could see chunks of the Spanish capital’s metro and water system sold to ease its spiralling debts. (FT)

Press Round-up – February 3

BT set to launch “ultra-fast” internet “Ultra-fast” broadband using direct fibre-optic connections will become available to most British homes and businesses next year, after a significant technological breakthrough by BT, the UK telecoms group. (FT)

OECD says EU bailout is ‘not enough’ The euro zone’s bailout funds are not big enough, the Organisation for Economic Co-operation and Development (OECD) has warned, amid mounting concerns about a Greek default. (Telegraph) SNB stands firm on Swiss Franc cap The independence of the Swiss National Bank risks being compromised due to political pressure following the departure of Philipp Hildebrand as chairman, the central bank’s acting chairman has warned. (FT)

Deutsche Bank concerned by ECB loans Deutsche Bank has risked a clash with the European Central Bank by indicating it sees a stigma attached to the long-term help offered to banks to try to ease the euro zone’s funding crisis.  (FT)

Brussels finds new black hole in Greece’s finances Pressure on Greece’s recession-stricken economy has intensified after international debt inspectors admitted an additional 15 billion euros would be needed to fill a newly discovered black hole in the country’s finances. (Guardian) Spanish banks told to find billions Spanish banks must find 50 billion euros from profits and capital this year to finance a clean-up of their balance sheets or agree to merge with another bank by May to gain an extra year’s grace, according to Spain’s economy minister Luis de Guindos. (FT)

China to take 25 percent stake in Portugal’s power grid State Grid Corporation of China is to acquire 25 percent of Portugal’s national power grid in the second large-scale Portuguese acquisition by a Chinese energy group in six weeks. (FT)

Graffiti artist set to cash in on Facebook shares A graffiti artist who chose to be paid in Facebook shares for work on a mural at the social network’s headquarters could collect $200 million when it goes public this year. (Times)

Press Round-up – February 2

Jefferies confirms Hoare Govett acquisition Jefferies, the U.S.-based investment bank, on Wednesday confirmed its acquisition of Hoare Govett, the UK broker, from Royal Bank of Scotland. (FT)

Balls critical of UK’s new financial bill The bill to revamp the UK’s financial regulation includes a “gaping hole” that could prevent important warnings from reaching the British finance minister, Ed Balls, shadow finance minister of the UK’s opposition party Labour, has warned. (FT)

Fitness First gym chain axes entire board Almost the entire board of Fitness First has been axed by its owner, BC Partners [BCPRT.UL], in an attempt to stem potential losses of hundreds of millions of pounds on its investment in the world’s biggest fitness club operator. (Times)

Ex-Lloyds Chairman may face knighthood backlash The head of Britain’s civil service has been asked to strip former Lloyds chairman Sir Victor Blank of his knighthood, as concerns grow about a rising “anti-business hysteria”. (Telegraph)

Trinity Mirror under pressure to cut chief’s pay Trinity Mirror is facing renewed pressure to rein in the pay of its chief executive Sly Bailey from some of the biggest shareholders in the media group. (FT)

American Airlines plans to cut about 10,000 jobs As many as 10,000 workers could be laid off by American Airlines <AAMRQ.PK> if negotiations with the unions are resolved successfully. (Times) Duke Street abandons effort to raise fund Buy-out investor Duke Street has abandoned efforts to raise its next fund, in a strong indicator that the long-expected shake-out in the private equity sector has started in earnest. (FT)

EU blocks Deutsche-Boerse tie-up with NYSE The European Commission on Wednesday vetoed the proposed $9 billion tie-up between Deutsche Boerse and NYSE Euronext, scuppering an attempt by the German and U.S. groups to create the world’s largest equity and derivatives exchange. (FT)

Press Round-up – February 1

Former RBS boss stripped of knighthood Sir Fred Goodwin, the former boss of Royal Bank of Scotland, was stripped of his knighthood on Tuesday, in the latest political concession to public anger in Britain over the perceived arrogance of some senior bankers. (FT)

EU to rule on Deutsche Boerse and NYSE merger The NYSE Euronext and Deutsche Borse tie-up on Wednesday faces its day of reckoning in Brussels, as EU commissioners are expected to sign-off a recommendation to block a merger that allegedly stifles competition. (FT)

UK Treasury hit by exodus of top staff The British treasury is grappling with an exodus of personnel as officials fume at low pay levels and high staff turnover, creating real operational difficulties with the budget just seven seeks away. (FT)

Britain misses out on £10bn contract to sell jets to India Britain suffered an embarrassing defeat last night after the Indian Government selected a French company as its first choice to build a £10 billion force of fighter jets. (Times)

London mayor opens arms to French banks fleeing tax Britain should welcome with “open arms” French banks that want to move business from Paris to London to escape the country’s new financial transaction tax, according to the Mayor of London Boris Johnson and Britain’s top bank lobbyist. (Telegraph)

Argos pins revival hopes on internet pioneer Argos, the British retailer owned by Home Retail, is set to announce John Walden as chief executive on Wednesday. (Times)

McGraw-Hill explores sale of education business McGraw-Hill is exploring the possibility of selling its $2.5 billion-plus (1.6 billion pounds) education business, after its previously announced plan to split the division from its Standard & Poor’s financial arm prompted interest from private equity groups, three people familiar with the situation said. (FT)

Press Round-up – January 31

Below is a round-up of today’s notable stories in Britain’s business press. Click each headline to read the story in full.

Business tells ministers to “back off bonuses” Confederation of British Industry president Sir Roger Carr has accused politicians of harming the international reputation of the London’s financial services district by resorting to terms of populist abuse in the row over bankers’ bonuses. (Times)

Russia’s Putin stands by state capitalism Vladimir Putin has set out an economic vision for Russia based on state capitalism and strong, paternalistic government as he seeks to return to the presidency in the face of unprecedented protests against his rule. (FT)

Portuguese storm gathers as EU leaders fight over Greece Surging borrowing costs in Portugal have raised the spectre of a second full-fledged contagion crisis in the euro zone, eclipsing the latest efforts by EU leaders in Brussels to agree on Europe’s bailout machinery and a strategy for Greece. (Telegraph)

RBS rejected Chinese offer for aviation unit Royal Bank of Scotland rejected a higher offer from a Chinese bank for its aviation arm over concerns about the ability of the state-owned institution to successfully close on the deal, people familiar with the transaction said. (FT)

European banks may request more funds from ECB European banks are preparing to tap the European Central Bank’s emergency funding scheme for up to twice as much as the ECB supplied in its debut 489 billion euros (409 billion pounds) auction last month, providing further evidence of the sector’s liquidity squeeze.  (FT)

Press Round-up – January 30

Lloyd’s chief plans management changes The chief executive of Lloyds Banking Group Antonio Horta-Osorio is set to unveil plans to simplify the bank’s management structure and hand more power to top executives, as he attempts to convince investors he can avoid a relapse of the exhaustion he suffered last year. (FT) Mining chiefs in secret meeting to halt tax rises The heads of the world’s biggest mining companies met in secret in Davos last week to discuss ways in which to halt the growing threat of resource nationalism. (Times)

  Europe’s carmakers hit out at India trade deal Europe’s carmakers are crying foul over a proposed trade agreement between the European Union and India, which they say would restrict access to one of their most important but highly protected markets. (FT)

Nervous bankers braced for job losses Nervous investment bankers in Britain are contacting headhunters in anticipation of a new wave of redundancies this year, while those already laid off are increasingly willing to accept temporary roles or positions overseas, according to senior figures in London’s recruitment industry. (FT) RBS to pay out investment bankers Royal Bank of Scotland, the lender at the centre of a storm over its chief executive’s bonus, is to pay out as much as 1.5 billion pounds to UK bankers as it counts the cost of its disastrous foray into investment banking. (Telegraph) Deutsche Bank targets problem assets Deutsche Bank  is preparing to launch a fund to snap up investors’ illiquid or damaged holdings in hedge funds that have failed to recover since the financial crisis. (FT)

RBS on verge of Hoare Govett sale Royal Bank of Scotland is on the verge of clinching a deal to sell Hoare Govett, its corporate broking business and one of the most venerable names in the City of London, to fast-growing U.S. investment bank Jefferies. (FT)

New battle for Torm amid tanker slump Danish shipping company Torm A/S is struggling to find either a significant new source of finance or agree a wholesale restructuring of its obligations to its banks as it seeks to withstand the sector’s prolonged slump. (FT)

TNT Post prepares for direct challenge TNT Post, Royal Mail’s largest private sector rival, plans to go head-to-head with the state-owned postal operator by launching its own delivery service for bulk and direct mail. (FT)

Cinven ends interest in struggling Mothercare The private equity firm Cinven has ended its interest in a potential bid for Mothercare, the struggling maternity product retailer. (Independent)