Wednesday newspaper round-up: Banks, Inflation, Tesco...

19th Jan 2011 06:34

Sir John Vickers will use a speech on Saturday to make clear that big banks are mistaken if they believe his government-appointed Commission on Banking will leave them intact.In a sign that he is determined to tackle the "too big to fail" agenda, Sir John is expected to outline a range of ways in which the operations of the big "universal banks" - which combine high-street banking and riskier investment banking under one roof - could be overhauled and forced to ring fence, or "subsidiarise", their component parts, the FT reports.Goldman Sachs will reveal a new round of bumper bonus payouts this morning that is expected to average at around $450,000 (£280,000) per person, demonstrating that another year of public fury at bankers' pay has failed to change behaviour on Wall Street and in the City of London. The bank is likely to confirm that its latest annual bill for pay, perks and end-of-year bonuses is around £10bn, the Independent reports.Britain's banks were accused of running an "oligopoly" by the chief executive of Virgin Money, as she said the market for retail banking could benefit from the break-up of the country's largest lenders. Jayne-Anne Gadhia, chief executive of Virgin Money, told a meeting of the Treasury Select Committee that the UK's five biggest lenders had an "effective oligopoly" and said more needed to be done to improve competition, the Telegraph reports.Apple reported a record $6bn in quarterly profit and voiced confidence in its strategy a day after announcing that its iconic chief executive, Steve Jobs, was taking an open-ended leave of absence for undisclosed medical reasons, the FT reports.Rocketing food and fuel prices could send the inflation rate to 5% by the autumn, economists warned after a shock report yesterday threatened to trigger a rise in interest rates. Record monthly leaps in food and transport costs pushed the consumer prices index (CPI) to 3.7%in December, the Office for National Statistics said. City traders are now anticipating as many as three separate quarter-point interest rate increases by the Bank of England this year alone, the Times reports.Citigroup was forced to defend its bond traders on Tuesday as a drop in fixed-income revenue overshadowed the bank's first annual profit since the financial crisis almost destroyed it. America's third-biggest bank saw fixed-income revenues drop 58pc to $1.48bn in the final three months of the year, a period that saw bond prices drop sharply. Citi's revenues from trading equities, a much smaller part of their business, were also down, 43pc to $596m, the Telegraph reports.Credit insurers have added to the woes of HMV, the struggling entertainment and book retailer, by scaling back cover for some of its suppliers. Two music and entertainment companies have said they can no longer get credit insurance to supply products to the retailer, which issued a profits warning this month after dreadful Christmas trading, the Independent reports.Four senior Russian officials from the British-based European Bank for Reconstruction and Development are at the centre of a corruption investigation by the City of London police. The bank, which invests in development projects in 29 countries across Central Europe and the former Soviet Union, said in a brief statement yesterday that it had waived the diplomatic immunity of the four Russians to facilitate an investigation by British police, the Times reports.In its latest departure from the "pile-'em-high, sell-'em-cheap" philosophy of its founder Sir Jack Cohen, Tesco is opening its first beauty parlour, following hard on the heels of the manicures and threading treatments being offered to customers on a trial basis at two of its larger stores. The move comes amid a wider push to take on the department stores and the likes of Boots in selling a wider range of upmarket cosmetics and is the latest in a long line of forays beyond its traditional activity of selling groceries, the Times reports.Vodafone has issued a complaint over Essar Group's plans to restructure its telecoms business, saying it will affect their joint venture Vodafone Essar. Essar, the Indian energy to steel group, plans to reverse one third of its telecoms arm into its quoted financial business India Securities Ltd (ISL). However, Vodafone said ISL was a highly illiquid vehicle with more than 95% of the shares under the control of Essar Group and two other shareholders. Essar, which holds 33% of Vodafone Essar, is trying to combine 11% of the total venture with ISL, the Telegraph reports.