Friday newspaper round-up: Royal Bank of Scotland, Barclays, Twitter

7th Aug 2009 06:14

The Government made a £1bn paper profit on its 70% stake in Royal Bank of Scotland yesterday on growing optimism that the lender will follow Lloyds today in predicting that the worst is over for the economy. But RBS, the UK's biggest bank in balance-sheet terms, is likely to adopt a more cautious tone than Lloyds. It will probably say that it has broken even for the six months to June 30, with strong profits in its investment banking business wiped out by losses in the retail and corporate bank, the Times reports.Energy companies have been called on by Ofgem, the regulator, to explain why their retail prices have not fallen further, given the steep drop in wholesale gas and electricity prices over the past year. Ofgem on Thursday published a letter from Alistair Buchanan, its chief executive, to the heads of the 'big six' energy suppliers, including British Gas, Eon and EDF, warning them that 'in a strong competitive market, we would expect prices to respond to such falls,' the FT reports.Barclays may consider sweetening its controversial decision to close its final salary pension scheme to almost 18,000 existing members. Marcus Agius, chairman, said he recognised that the bank's proposal to close its pension fund to future contributions was "disappointing" for employees. The UK's second-largest bank has said that it believes the action is necessary because the current scheme is "untenable" after its £200m surplus ballooned into a £2.2bn deficit in the space of a year, the FT reports.The social networking sites Twitter and Facebook came under a "denial of service" attack yesterday, locking out millions of users. Under such attacks, sites are deluged with traffic in an attempt to bring them down. It was the first time that Twitter had been attacked and the site was out of action for two hours in the afternoon. The motive remains unclear as does the identity of those responsible. Facebook users reported problems all day, the Times reports.The most senior British executive at TNK-BP, the British oil group's Russian joint venture, is set to leave this autumn for personal reasons, the company announced yesterday. Timothy Summers, TNK-BP's chief operating officer and a former employee of BP, will step down in mid-October. He will be replaced at the joint venture by Bill Schrader, president of BP Azerbaijan, the Times reports.Unilever's chief executive warned branded-goods makers will have to work harder to get consumers to pay for their products rather than choose supermarket own-label for at least the next five years, as the recession makes shoppers reassess spending patterns. "The consumer is increasingly value-conscious and I don't think that is going to change," said Paul Polman, chief executive. "Consumption is going to change - I don't expect the next five years to be easy," the Telegraph reports. Assets invested globally in exchange traded funds have reached a record high of $862bn on the back of the partial recovery in stock markets and the continuing strong demand for passive investment, according to data from Barclays Global Investors. Global exchange-traded funds (ETF)The value of global ETFs plunged from $805bn in April 2008 to $711bn at the end of last year as the global recession hit stock, fixed income and commodity markets, the FT reports. Having more women in the boardroom can hurt the financial performance of well-governed companies, according to research that is likely to be seized upon by opponents of diversity initiatives. The study, published this week in the Journal of Financial Economics, appears to contradict research into the effect of female directors in finding that, on average, companies with proportionally more women on their boards were less profitable and had a lower market value, the FT reports. Ladbrokes became the latest bookmaker to join the offshore exodus as it posted a one-quarter fall in underlying half-year operating profits. The bookie followed rival William Hill this week in saying it would relocate its online betting activities to low-tax Gibraltar in a move expected to save a net £7m-plus a year. Chris Bell, chief executive, said the combination of 15% gross profits tax, 15pc VAT and the requirement to contribute 10% of profits to the horseracing levy had proved too much against foreign rivals, the Telegraph reports. Hank Greenberg, the former chairman of American International Group, on Thursday agreed to pay $15m to settle the US Securities and Exchange Commission's investigation into his role in accounting fraud at the company from 2000 to 2005. The settlement focuses on Mr Greenberg's alleged involvement in "numerous improper accounting transactions" that inflated AIG's results, the FT reports.