PRESS DIGEST - Financial Times - April 9

Financial Times

IMF PUTS COST OF CREDIT CRISIS AT 1,000 BILLION DOLLARS

The International Monetary Fund said on Tuesday the financial sector faces potential losses of almost 1,000 billion dollars as a result of the credit crisis. It also warned of further losses and write-downs on prime mortgages, commercial real estate, leveraged loans and consumer finance. The IMF believes banks have already taken most of the write-downs needed on U.S. subprime loans but believes the "deterioration in credit has moved up and across the credit spectrum". Jaime Caruana, head of monetary affairs and capital markets at the IMF, told reporters the rescue of Bear Stearns "helped to reduce the possibility of a tail event in the financial system" -- in other words, it made a truly catastrophic outcome less likely.

HSBC TO MATCH EXISTING MORTGAGES

The UK's biggest bank HSBC (HSBA.L) is preparing to make an audacious offer to match homeowners' existing mortgage deals. The bank, which has just three percent of the market, is to target the 1.4 million customers who come off cheap fixed-rate mortgage deals this year and who face a sharp rise in mortgage costs. HSBC will offer rates as low as 4.45 percent and is gearing up to cope with three times its current level of business as it prepares to launch the offer to non-HSBC customers for a five-week period.

PRICES ARE NOW LOWER THAN A YEAR AGO, SAYS HALIFAX

In a report released on Tuesday, Halifax said house prices are now lower on average than they were a year ago. The UK's biggest mortgage lender said house prices fell 2.5 percent in March, taking the quarterly drop in prices to one percent and the quarterly year-on-year growth rate to 1.1 percent, the lowest in 12 years. The average house price last month was 191,556 pounds, compared to 194,094 pounds in March 2007. This is the first year-on-year fall since the start of 1996. The data has fuelled calls from the CBI and other industry groups for policymakers to cut interest rates this week.

SOARING CRIME RATE COSTS BUSINESS 12.6 BILLION POUNDS

A survey conducted by the British Chambers of Commerce has found the annual cost of crimes against business has risen 20 percent over the past four years, and that businesses in the UK lack confidence in the police in dealing with crime. The survey of more than 3,900 companies shows the cost of business crime has reached 12.6 billion pounds. This is about a sixth of the total cost of crime in the UK. The BCC has called on the government to make cutting crimes against business a priority. Fifty-eight percent of businesses have been hit by at least one crime in the last year and the sectors hardest hit are hotels, restaurants, construction, engineering and retail/wholesale.

LIVINGSTON IS NEW BT CHIEF

BT (BT.L) announced on Tuesday the current head of its retail division, Ian Livingston, will replace Ben Verwaayen as chief executive on June 1. Livingston signalled he will pursue the same strategy developed by Verwaayen but that he will also consider investing in WiMax, a mobile technology which is capable of providing wireless connections to the Internet. Some analysts say Livingston's reputation as a cost cutter will enable BT's investors to warm to him.

888 PLANS MOVE INTO PAYMENT SERVICES

Online gambling company 888 Holdings is planning to set up a separate company to process payments for non-gambling businesses and help them to identify fraudulent transactions. Chief executive Gigi Levy said 888's service would be aimed at highly rated companies. Preliminary results from 888 reveal trading remains strong with 2008 heading for growth of 20 percent as the company rebuilds from the U.S. crackdown on online gambling in 2006. Pre-tax profit increased in the year to December to 38 million dollars from 13.4 million dollars and net gaming revenue was up 36 percent to 213.4 million dollars. 888 is paying a five pence final dividend, making the total for the year of 6.8 pence.

WHITBREAD EXPANDS LONDON HOTEL CHAIN

Whitbread (WTB.L) is to commit 100 million pounds to the development of six new London hotels in its Premier Inn brand, creating 1,200 rooms. The company is to also add 400 rooms to its London portfolio after a 18.5 million purchase of three hotels from the Real Hotel Company. Whitbread is competing with Travelodge for the London budget hotel market, which is expected to grow significantly over the next 20 years. The two companies were in talks over a possible merger but this ended last month in some acrimony as each side sought to claim that the first approach had been made by the other party.

BIDDERS EYE UNILEVER'S U.S. ARM