Friday newspaper round-up: Royal Bank of Scotland, BBC, Google

26th Feb 2010 06:37

Royal Bank of Scotland paid 100 investment bankers more than £1m each - yet has still warned that hundreds will defect this year over pay restrictions, costing the state-backed lender £1bn in profit. Speaking after RBS unveiled a £3.6bn loss last year , chief executive Stephen Hester claimed a thousand top bankers quit in 2009 for better pay elsewhere, adding: "This year will look a lot like the last... The people who left us last year would have increased our profits by up to £1bn... [This year] we will lose uncomfortable amounts of staff," the Telegraph reports.The BBC will close two radio stations, shut half its website and cut spending heavily on imported American programmes in an overhaul of services to be announced next month. Mark Thompson, the Director-General, will admit that the corporation, which is funded by the £3.6bn annual licence fee, has become too large and must shrink to give its commercial rivals room to operate, the Times reports.Google yesterday set out a further defence of its system for ranking search results, as the internet company attempted to defuse questions from Europe's top antitrust regulator. In a new blog posting, Amit Singhal, a Google employee responsible for the ranking system, claimed that the company's algorithms produced better quality and more relevant results than a system which involved human intervention, though he admitted that the system was far from perfect, the FT reports.Britain's economy faces another critical moment today, when figures reveal whether the country really has finally recovered from recession. Statistics published last month suggested that Gross Domestic Product had grown by the most slender of margins during the final quarter of 2009, technically marking an end to the longest recession since the 1930s, the Times reports.GlaxoSmithKline chief executive Andrew Witty took home more than £8 million in pay and share awards last year. Mr Witty's first full year as chief executive of GlaxoSmithKline was marked by a 76% pay rise to £3.128m, plus £5m worth of shares in GSK ? a package that could revive the controversy surrounding the pay of JP Garnier, his predecessor, the Times reports. Global investors still have sufficient faith in UK leadership to keep buying gilts even if there is a hung Parliament or when the Bank of England starts to unload its £200bn holdings of bonds, according the curator of Britain's public debt. Robert Stheeman, head of the UK Debt Management Office, said the political elites are rising to the challenge, greatly reducing the chances of a gilts strike, the Telegraph reports.Talks have collapsed between Britain, the Netherlands and Iceland about repayment of £3.4bn (€3.8bn) lost by depositors in the failed online bank Icesave, raising fears that the country will default on its obligations. Iceland yesterday rejected an offer to soften repayment terms, British officials said. It dismissed a proposed reduction in interest rates as insufficient and failed to win support for a counter-offer that one negotiator described as "fanciful", the FT reports.The US central bank is looking into Goldman Sachs's role in arranging contentious derivatives trades for Greece, which helped the country to massage its public finances, Ben Bernanke, chairman of the Federal Reserve, revealed on Thursday. "We are looking into a number of questions relating to Goldman Sachs and other companies and their derivatives arrangements with Greece," Mr Bernanke said, apparently referring to Greek currency transactions structured by Goldman, the FT reports.Meanwhile, the crisis of confidence in Greece's ability to tame its budget deficit deepened yesterday as Greek government sources confirmed that European Union inspectors now in Athens expect the country to miss its targets for deficit reduction. Surrounded by more mass protests against the Papandreou government's austerity programme, EU officials believe that Greece's contracting economy and rising debt costs will make it difficult for Greece to meet its obligations, according to Greek sources. It must roll over €25bn (£22bn) of debt in April and May,the Independent reports.Virgin Media yesterday outlined plans to bring superfast broadband speeds of 100Mb to 12.6m UK homes by the end of next year. The move was backed by both Labour and the Conservatives in what has become a hotly contested political issue in the run-up to the general election, the Independent reports.