Sunday newspaper round-up: UK banks, National Express, William Hill

2nd Aug 2009 10:43

Treasury minister Lord Myners' radical plans for changes to financial regulation are "dangerous" and could result in a further loss of confidence in the market, according to the Association of British Insurers (ABI), the Sunday Telegraph reports.Lord Myners' idea for a two-tier shareholder register with different rights for long and short-term investors could lead to companies surrounding themselves with a club of supportive, non-critical investors while others lose out through their inability to trade freely.Barclays' high-rolling investment bankers are set for bonus and salary packages worth an average of £250,000 a head for six months' work. A bumper performance from Barclays Capital is likely to see the bank set aside a remuneration pot of up to £5bn for the first half of the year. The investment-banking arm is expected to help Barclays report a profit of about £3 billion, despite large provisions for bad debts. This week all the big British banks will report half-year figures. While most are back in the black ? including a possible £5bn profit at Lloyds ? Royal Bank of Scotland (RBS) will surprise investors by saying it has only broken even, the Sunday Times reports. The Observer adds that the High Street banks are this week forecast to write off a combined £32bn as the recession bites, exacerbating the difficulties facing businesses and households in making loan repayments on time. The biggest writedown - of up to £11bn - is forecast to come from Lloyds Banking Group, largely as a result of problems inside its HBOS businesses. But the bank, 43% owned by the taxpayer, is expected to reveal that it believes the worst is over, even though bad debts could remain high for some time.AstraZeneca, the drugs giant, has received approval in America for Onglyza, a new pill for adult diabetes sufferers that could become its next big seller. The treatment, developed in partnership with rival pharmaceutical group Bristol-Myers Squibb, could eventually achieve annual sales of more than $1bn, say analysts. Onglyza will compete with a best-selling treatment produced by Germany's Merck called Januvia, the Sunday Times reports.The bitter row at troubled sports retailer JJB took a dramatic twist this weekend as it was revealed that former chief executive Chris Ronnie planned to hand a dossier to the Financial Services Authority and call for an investigation. Ronnie's departure in March sparked a feud with former colleagues. He said he was fighting back after being made the scapegoat for the company's decline.Ronnie, who is advised by Manchester law firm Pannone, said that he believed it would merit a full investigation by the Financial Services Authority, reports the Mail on Sunday.Britain's last fighter aircraft factory faces closure within five years after the government's decision last week to curtail its purchases of the Eurofighter Typhoon. The industry, founded on the Sopwith Camel in the first world war, is expected to come to an end when the last of the Typhoons rolls off the production line in 2014. The BAE Systems aircraft manufacturing plant at Warton, Lancashire, would close with the possible loss of 20,000 jobs at the site and in support trades, the Sunday Times reports.National Express is weighing up a £350m rights issue after getting the green light for a plan to remain independent.The rail and bus group is making the cash call with the support of some of its biggest shareholders. The fundraising is being worked on by the investment banks Merrill Lynch and Morgan Stanley. The move is a setback for Spain's Cosmen family ? the largest National Express shareholder ? and the private- equity firm CVC, which are planning a takeover bid for the business, the Sunday Times reports. William Hill, the bookmaker, will announce this week that it is transferring its internet betting operations to Gibraltar in a move that will save it millions of pounds in tax. Ralph Topping, the bookie's chief executive, has made no secret of his frustration with the government's attitude on gambling duty, the Sunday Times reports.Two of Britain's biggest insurers are poised to slash dividends this week, potentially derailing the stockmarket's blockbuster summer rally. Aviva is expected to unveil a 40% cut in its first-half payment and warn of further potential reductions. Legal & General (L&G), which has been facing persistent questions over its capital strength in recent months, is likely to reduce its dividend by up to half. Aviva is expected to post operating profits of about £1.2bn, while L&G is forecast to show operating profits of about £470m, the Sunday Times reports.The Guardian Media Group (GMG) is considering closing The Observer, the world's oldest Sunday newspaper, as part of a cost-cutting drive triggered by a drastic plunge in the group's finances. Members of the Scott Trust, the charitable foundation that owns GMG, discussed the plan on July 6. They were shown trial copies of an Observer-branded news magazine that would replace the paper and be published on a Thursday, the Sunday Times reports.The Financial Services Authority has gone into debt for the first time and has been told by directors to review its cashflow. The regulator has drawn on a £100m credit agreement with Lloyds Banking Group and has concluded a further borrowing facility of £100m with HSBC. The FSA spent £347m in the past year, but raised only £324m from fees and other revenues, reports the Sunday Independent.Workers with generous final salary pensions must give up at least 10% of their benefits if Britain is to avoid sleepwalking into a two-tier pension scheme with growing numbers of people living in poverty in old age, the president of the institute of actuaries said yesterday. According to Ronnie Bowie, one of the pension industry's most senior experts, there needs to be a shift in thinking about pensions, away from short-term cost savings to a broader review of the support offered by employers to all staff, reports the Observer.Rules governing the controversial practice of pre-pack company administrations are being abused and need overhauling, the Association of British Insurers (ABI) has said in a letter sent to the Insolvency Service last week, the Observer reports. Use of pre-packing - a practice that allows companies to quickly enter into administration, wipe out debts and be sold on, often to the company's original management - has soared during 2009, with 1,250 companies using the procedure, writes the Sunday Independent.