Thursday newspaper round-up: RBS, Spain, Renewables, Next

5th Jan 2012 07:06

As many as 10,000 jobs could be culled at the Royal Bank of Scotland as it dramatically downsizes its global banking and markets division. These cuts and an expected £1bn to £2bn of restructuring costs are considered the worst-case scenario by the bank, it was reported in the Financial Times. RBS is asking bidders interested in buying parts of its investment banking arm to submit offers before the end of the month. The US investment bank Lazard has been hired by RBS to run the process, which could see the bank offload businesses such as equities and corporate finance, The Telegraph reports.Thomas Cook's parlous financial position has been laid bare after the holiday company admitted it had asked for permission to defer an £850,000 severance payment to former chief executive Manny Fontenla-Novoa. The company said it had postponed the payout in the wake of a cash crisis that forced it to hand its lenders a 4.9% stake in the business. Thomas Cook said it had agreed a £851,114 payment but added: "Due to [a] deterioration of the company's forecast year-end headroom position after agreement was reached, Mr Fontenla-Novoa agreed to a deferral of the due date for payment until after the seasonal cash low point at the end of December." The agreement is likely to renew fears among shareholders over the group's financial position, The Telegraph says.Spain is to carry out an "imminent" restructuring of its banking industry, its Economy Minister said yesterday. Luis de Guindos said that the reforms would be outlined in the next few weeks. It is thought that the Government might force banks to devalue their property assets by an average of 20%. Spain has a stockpile of about 700,000 unsold empty homes, partly because property is regarded as overpriced. The Bank of Spain estimates that lenders are struggling with "troubled assets" of €176bn (£145bn) linked to the collapse. This is curbing lending and restricting hopes of recovery. The Government is likely to merge small banks and savings banks, which do not have the capital to sustain the devaluation of their property assets, The Times reports.The UK's nuclear industry has 'no fundamental safety weaknesses', according to a report commissioned after Japan's Fukushima nuclear accident. The Office for Nuclear Regulation said there was room for improvement in a number of areas, but identified no serious failings in Britain's nuclear power stations. The conclusions came in stark contrast to the assessment by France's nuclear regulator, which called for urgent safety improvements at its 58 power plants. France's EDF, which runs eight of Britain's ten nuclear power plants, said improvements in its domestic market would cost the company around £8.3bn alone, while the regulator pitched the total cost to the industry at tens of billions of Euros. A spokesman for EDF offered no figure for the UK, but said the company spends some £300m on British nuclear facilities each year, The Daily Mail says.Questions were raised over the funding outlook for the renewable energy industry yesterday after a wave power developer confirmed it was up for sale and a wind turbine maker issued its second profits warning in just three months. Leith-based Pelamis Wave Power said it was looking to be bought by a large engineering company, while shares in Danish turbine specialist Vestas hit a near nine-year low after it revealed profits will be hit by higher research and development costs and delays to orders. The wider industry has been buffeted by a general slowdown in investment in energy infrastructure during the global economic downturn. The sums involved are vast, with Scotland alone having £46 billion-worth of projects in the planning system or being scoped for development. A record £750m was invested in the sector in the year to October, trade body Scottish Renewables said. BAE Systems, Rolls-Royce and Glasgow-based Weir Group have all been touted as possible buyers for Pelamis, which could fetch up to £50m, according to The Scotsman.The fortunes of two of the UK's biggest retailers diverged during the crucial Christmas trading weeks, with Next yesterday reporting "disappointing" sales at its high street stores while John Lewis trumpeted "outstanding" figures after the chain proved a magnet for gift buyers. Next's chief executive, Lord Wolfson, blamed a frenzy of unplanned discounting by rivals and the mild autumn weather for weaker than expected sales at its stores and predicted another tough year as turmoil in the eurozone and high unemployment hit consumer confidence. "December was definitely disappointing, as we didn't see a boost in the weeks that we saw a lot of snow last year," he said, adding that after 2010 disruption perhaps Britons had "learned not to spend so much at Christmas," The Guardian writes.AB