Sunday newspaper round-up: Bank ringfencing, UK deflation, Ryanair, Aveva

17th May 2015 16:17

Government plans to "ring fence" bank's high street business from their more risky investment banks could be watered down in an attempt to keep the likes of HSBC in the UK, according to the Sunday Times. The Treasury and the Bank of England have begun talks with senior City bankers on potential reform of the proposals, with HSBC's pre-election threat about moving its headquarters out of Britain having an effect and adding urgency to the talks. The government is desperate to avert the exit of the world's third largest bank by assets as it would raze receipts from the bank levy, but is reluctant to backtrack on the ring-fence proposals.Official data released in the coming week will confirm whether the UK has slipped into deflation due to the continuing supermarket price war, lower air fares and cheaper water bills. Inflation has remained at zero since February, and, noted the Sunday Telegraph, economists are divided over whether the figure will fall further in April. The Bank of England believes the consumer prices index fell by 0.1% in April, and Goldman Sachs, Capital Economics, BNP Paribas, Commerzbank and Citi echo this view, while economists at RBS, Credit Agricole and Nomura believe inflation rose to 0.1%.Top investors are flying to Frankfurt on Monday to lambast Deutsche Bank management over its handling of the interest rate rigging scandal, ahead of a potential revolt at its annual shareholder meeting on Thursday, according to the Sunday Times. They are expected to question the future of London-based co-chief executive Anshu Jain, who is under pressure over his plans for restructuring the investment banking business. ISS, the influential adviser to institutional shareholders on pay and governance, has told clients not to support Jain and his fellow CEO Jürgen Fitschen after the bank failed to co-operate with regulatory investigations into Libor, leading to larger penalties and lower returns for investors.Ryanair chief executive Michael O'Leary has told the competition watchdog that if it does not reverse its ruling on the company's stake in Aer Lingus then he will sue for damages. The Competition and Markets Authority (CMA) last month rejected Ryanair's attempts to block its decision to force the airline to cut its interest in Aer Lingus from 29.8% to just 5%. Speaking in an interview with the Sunday Telegraph, O'Leary said: "If they don't reverse the decision we're going after them in court."Poultry group Bernard Matthews is seeking further funding, less than two years after its private equity saviours Rutland Partners rescued it from near-collapse following the 2007 avian flu outbreak. The maker of the once-popular Turkey Twizzler is now seeking another £10m, the Sunday Telegraph reported.Talking of brands you thought had departed forever, retailer HMV is set to launch its new website as the music specialist enters the next stage of its transformation, according to the Sunday Telegraph. The high street chain, which was rescued by restructuring specialist Hilco three months after its 2013 collapse, has since returned to the black and has plans to open 16 new stores across Ireland and the UK.Matches Fashion, the designer clothing retailer, has hired Morgan Stanley to look at strategic options, which could include a flotation, according to City sources reported by the Sunday Times. The company, which has shops in London and sells online, is three-quarters-owned by founders Tom and Ruth Chapman. The other investor is Scottish Equity Partners, but the paper's source was not sure which parties were looking to sell out.Online gambling group 888 Holdings has joined the battle to buy its FTSE 250 rival Bwin.Party, the Sunday Times reported. Bwin informed the market last week that talks, which had been assumed to have died a death after several potential bidders pulled out in February, were continuing. AIM-listed competitor GVC Holdings, which is worth around a third of Bwin, also admitted on Friday that it was plotting an audacious bid.Bidders are also circling for another FTSE 250 digital players, engineering software designer Aveva, said the Sunday Times. Shares in Aveva, which reports annual results on Tuesday, have been lifted by takeover rumours in recent weeks. The paper reported rumours that Schneider Electric, the French energy giant, has held talks with bankers about a bid in order to combine it with Invensys, another oil and gas software company, which it bought in 2013. New York-based Emerson has held internal talks about a deal, City sources added, and is hoping for Aveva's latest trading update to knock the shares back.David Cameron's new business secretary, Sajid Javid, faces an unwanted reminder of his investment banking past when an offshore tax avoidance scheme is brought to court later this year, said the Sunday Times. A mazy tax scheme used in 2003 by Deutsche Bank, where Javid was a senior executive at the time, has progressed to the Supreme Court after a challenge by HM Revenue & Customs. The "carefully planned tax avoidance scheme" was designed to enable Deutsche to provide substantial bonuses to employees "in a way that would escape liability to both income tax and national insurance contributions", according to early tribunal hearings. But Javid's spokesman told the paper that the now-MP "did not personally receive any tax advantage whatsoever".