Wednesday newspaper round-up: Pensions, Lloyds Banking

5th Aug 2009 06:33

The shortfall in FTSE 100 blue chip final-salary pension schemes more than doubled in the past year to a record £96 billion, according to a new survey. The slide in equity markets and the fallout from the collapse of Lehman Brothers, the former Wall Street banking group, were blamed. The figures, collated in mid-July, were revealed in the latest annual survey by Lane, Clarke & Peacock (LCP), the consultant, and came despite an eleven-day rally in equity markets, The Times reports.Lloyds Banking Group is set to unveil a pre-tax loss of up to £5 billion today, damaged further by the sickly state of corporate loans it took on when rescuing HBOS almost a year ago. One senior banker said that if Lloyds, 43% owned by the taxpayer, racked up a loss of more than £1bn that was attributable to shareholders, "the market will have a fit". Lloyds' acquisition of HBOS caused the bank's shares to plummet and provoked outrage among investors, the Times writes.General Electric agreed to pay $50m on Tuesday to settle civil accounting fraud charges by US regulators, calling into question the conglomerate's legendary ability to deliver consistent earnings growth. The settlement with the Securities and Exchange Commission - which accused GE of bending the "accounting rules beyond breaking point" - involves a relatively small payment. But it is a blow for Jeffrey Immelt, chief executive, and Keith Sherin, chief financial officer, the FT reports.The Serious Fraud Office is gathering extensive intelligence on the Icelandic banks in the aftermath of last autumn's crash that left thousands of UK institutions nursing millions of pounds of losses. The SFO's team has intensified its inquiries following the leak of Kaupthing's loan book on to an internet site, Wikileaks.org, over the weekend, according to sources. A team is understood to be examining the document connected to the failed Icelandic bank, which had a large UK client base, the Telegraph reports.Focus DIY will outline details today of a vital restructuring deal to secure its future and urge landlords to back its proposals in a vote later this month. Focus wants to enter a company voluntary agreement (CVA) with landlords, under which it will dump cash-draining closed stores. Landlords of its closed stores would receive two lump-sum dividends in return for losing rent, the Times writes.Off-plan buyers have returned to the London housing market and are putting down deposits of thousands of pounds for homes that will not be completed for at least a year, amid a shortage of property for sale in the capital. Barratt, the housebuilder, said that it has received reservations worth 10% of the full asking price for almost half the flats at its 10 Rochester Row development in Westminster, six months before the launch and a year before the scheme is due for completion, the Times reports.The value of UK pension savings is threatened with a sharp cut of 10-20 per cent under the European Union's new capital rules for insurers unless they are changed, according to Legal & General, one of the UK's biggest annuity suppliers. Tim Breedon, chief executive, said that if the Solvency II rules, which were voted into law by the European parliament in April, were introduced in their current form it would represent a "betrayal of savers", the FT reports.The pound surged to a nine-month high against the dollar at £1.7050 on the sunnier outlook but later fell back to end the day down 0.24 cents at $1.6904. Traders reacted to disappointing data about the money supply, which may prompt the Bank of England to extend its policy of quantitative easing, the Telegraph reports.Northern Rock yesterday revealed the dark side of British banking, unveiling losses of £725m and an increase of taxpayer funding to £10.9bn. The bank admitted that admitted that four out of 10 of its borrowers were now in negative equity - representing 218,400 households, the Independent reports.