Tuesday newspaper round-up: Bank of England, Barclays, Lloyds

19th May 2009 06:17

The Bank of England revealed yesterday that it had racked up record profits of almost £1bn in the year to February as its fee-earning activities burgeoned amid the global financial and economic turmoil, reports the Times.Lehman Brothers Holdings wants to investigate whether the sale of its US brokerage unit to Barclays Capital was undervalued, resulting in a "windfall" to the British bank of possibly billions of dollars. In a court filing, lawyers for Lehman Brothers Holdings said they have become aware of "apparent material discrepancies" relating to Barclays' obligation to pay employee bonuses and cure amounts, reports the FT.The financial condition of some of Britain's train operating companies is so parlous that the Government needs to make contingency plans for keeping the railways running "in the event of multiple failure", a cross-party committee of MPs warned, reports the Independent.Britain has begun taking soundings with sovereign wealth funds and other investors about selling stakes in its part-nationalised banks. UK Financial Investments, which manages the government's 43.5% stake in Lloyds Banking Group and 70% stake in Royal Bank of Scotland, could start the process of selling tranches in both banks within a year, according to people briefed on the organisation's plans, reports the FT.Millions of private shareholders in Lloyds Banking Group could receive payments averaging £300 because of a quirk in the way the bank is strengthening its balance sheet and repaying government money. Lloyds, the most widely held company in Britain with 2.8m private shareholders, announced plans to raise £4bn to repay preference shares issued to the government at the height of the banking crisis last October, reports the Times.Economists called the end of the credit crunch yesterday as the short-term interest rate that banks charge to borrow from each other fell to a record low on dollar, euro and pound-denominated loans. The continuing decline in the London interbank offered rate (Libor) signalled a return to normality for the credit markets for the first time since May 2007, according to Peter Chatwell, an interest rate strategist at Calyon, the investment banking unit of Crédit Agricole, reports the Times.The US promised to stop short of placing restrictions on executive pay for senior bankers as three of America's largest banks took the first steps on the road to repaying a collective $45bn (£29.3bn) of bail-out funding, reports the Telegraph.BAA accused the Commission of "apparent bias" over its decision to force the sale of Gatwick, Stansted and either Glasgow or Edinburgh airports. In its appeal to the Competition Appeal Tribunal, BAA highlights "links between a member of the Commission panel and an organisation interested in acquiring the airports that BAA is required to sell," reports the Telegraph.A scheme to bail out the motor industry by subsidising sales of new cars was in chaos last night as a row over tax and costs prompted leading manufacturers to refuse to take part. On the day that the "cash for bangers" initiative began, several carmakers, including Ford, Vauxhall and Honda, told dealers not to register new vehicles under the scrappage scheme, reports the Times.