Sunday newspaper round-up: Royal Bank of Scotland, Bank bonuses, Xstrata...

9th Jan 2011 10:00

Stephen Hester, the chief executive of the Royal Bank of Scotland, is to be paid almost £7m just two-and-a-half years after the state-controlled bank was bailed out by taxpayers.Mr Hester, parachuted in to rescue RBS at the height of the 2008 financial crisis, will take home an estimated £6.8m in bonuses, salary and other payments this year. The announcement is expected to cause controversy at a time of government austerity measures, particularly as there have been signs that ministers are unlikely to take fresh action to curb bonuses, the Sunday Telegraph reports.The Sunday Telegraph adds that the Government is to demand that Britain's five biggest high street banks sign up to a detailed commitment to increase lending and disclose compensation levels in return for being allowed the £7bn bonus round expected to sweep across the Square Mile in the coming weeks.Britain's best-paid banking boss, the Barclays chief executive Bob Diamond, will face intense pressure from MPs to waive his multimillion-pound bonus this week in recognition of the austere economic conditions and public intolerance of outsized City pay cheques. An appearance by Diamond in front of the Treasury select committee on Tuesday is set to become a key clash between Westminster and the City as the coalition's efforts to tame bankers' pay falter, the Observer reports.Goldman Sachs is poised to stoke the row over banker bonuses by revealing that it has paid its staff more than $13bn (£8.4bn). The investment bank will reveal the payments in 10 days, alongside full-year figures that are expected to show a 40% drop in profits. Although the bank's bonus pool has been cut by 20% compared with last year, the pay deals are still worth an average of about $370,000 a head for its 35,000 employees around the world, the Sunday Times reports.Bonus payments at HSBC have been delayed by a month following a decision by the bank not to reward its staff before its financial results have been approved and published. Investment bankers at HSBC, who are usually paid in mid-February, have been told that this year they must wait until after the results are published on February 27, the Sunday Telegraph reports.British American Tobacco, owner of the Dunhill, Rothmans and Benson & Hedges brands, is in talks to acquire a Colombian firm for more than £270m. BAT is understood to be putting together a bid for Protabaco, which has eight brands including Mustang and Premier, and is the second-biggest cigarette maker in the country. A spokesman said BAT, which already operates in Colombia, was keen to acquire the business, which employs more than 1,200 staff, after US cigarette group Philip Morris International pulled out of a bid, the Mail on Sunday reports.The spectre of trucks blockading streets in protest at record fuel prices - on top of student and public-sector worker demonstrations - will be raised tomorrow when the haulage industry unveils a campaign to force government to halt rises in petrol duty. The plans, backed by the Freight Transport Association and others, come amid warnings from the AA that recent tax rises, on top of soaring oil prices, are driving motorists off the road and damaging the wider economy, the Observer reports.New data has revealed that employees are suffering painful real-term pay cuts as salary increases fail to keep up with the rate at which prices are rising, according to the take home pay indices to be published by the payments processor VocaLink. Both public and private wage growth nose-dived in the three months to December to an annual rate of 1.1%, figures to be published this week show, the Sunday Telegraph reports.Xstrata is poised to swoop on Colombia's second-biggest coal miner as the FTSE 100 mining giant scrambles to cash in on the global commodities boom. Coal prices have jumped 10% in the past month alone as cold weather in Europe and America and floods in Australia, one of the world's biggest producers, have hit supplies. Drummond, a family-owned business based in Alabama, put its $8bn (£5bn) Colombian arm up for sale last year to cash in on the boom. Rio Tinto and Vale, the Brazilian giant, were among those circling, but Xstrata was the only suitor to table a fully financed offer by last month's deadline, the Sunday Times writes.Ocado's first Christmas trading update, due tomorrow, will reveal the impact last month's snow had on the firm's operations. The business is expected to fall short of its target for 30% sales growth in December. Ocado is likely to say, however, that things would have been worse had it not decided to fit its 700 delivery vehicles with snow tyres. Only six vans had to be dragged out of the snow last month compared with 200 during the previous December's heavy snowfall, the Sunday Times reports.A small team at Brevan Howard, Europe's largest hedge fund, has shared more than £200m in a pay bonanza that dwarfs the bonus rounds at most investment banks.Brevan Howard's 38 top partners, including its secretive co-founder Alan Howard, shared £204m last year, the company's most recent accounts show. Fee income from its hedge funds was £736.3m, according to figures for the year to March 2010, from which the firm made a profit of £687.9m. Its flagship Master fund generated a 19% return in 2009 as big bets on bonds and currencies paid off, the Sunday Times reports.Economists at Société Générale and BNP Paribas have both revised their interest rate forecasts upwards in the past few days. Both banks had previously expected Bank rate to remain unchanged until 2012. BNP Paribas now believes a rise will come as early as May, in line with previous forecasts from Deutsche Bank. Société Générale believes that there will be two half-point rises, leaving Bank rate at 1.5% by the end of the year, the Sunday Times reports.A monumental legal battle over the liquidation of the business empire of alleged fraudster Sir Allen Stanford will come to a head in the Caribbean courts this month. Liquidators at Grant Thornton, PricewaterhouseCoopers and Zolfo Cooper have been lined up to replace UK-based insolvency firm FRP Advisory to unravel the remaining assets of Stanford International Bank. This was the Antigua-based bank that is at the centre of an alleged Ponzi-style fraud scheme that could have lost investors up to $7bn, the Sunday Independent reports.The EU is to spend more than £1bn on helping Britain capture and get rid of carbon dioxide - a move which could extend the productive life of North Sea oilfields to 50 years and raise £60bn in tax revenues. A new study by Durham University academics estimates that the extra tax revenues will be raised by the UK Treasury if carbon capture is adopted by North Sea oil companies, the Sunday Independent reports.Guy Hands, the private equity tycoon, could surrender the keys of EMI to its lender Citigroup within weeks, paving the way for a sale of the British music group to US buyers for about £1.5bn. A well-placed City source said: "The endgame is fast approaching. Guy's backers don't want to put any more money into EMI, which means he has to cede control and admit defeat," the Observer reports.