PRESS DIGEST - British business - May 12

The Times

MORTGAGE GIANTS TO UNVEIL FRESH WRITE-DOWNS

HSBC (HSBA.L), Alliance & Leicester ALLL.L and Barclays (BARC.L) will report investment write-downs totalling more than four billion pounds this week. HSBC is expected to write down up to five billion dollars on Monday due to the continuing toll the credit crunch is taking on its American unit. Alliance & Leicester will report on Wednesday with analysts predicting pre-tax write-downs of around 200 million pounds. Barclays will deliver its update on Thursday, with around 1.4 billion pounds of write-downs expected.

DISENCHANTED COMPANIES TURN THEIR BACKS ON ROYAL MAIL

A survey of 1,000 businesses throughout the UK by the British Chambers of Commerce has found most firms do not view Royal Mail [GBPO.UL] as an efficient organisation to work with. Sixty-eight percent of businesses felt the group was not a "professional, efficient organisation to do business with". The results of the survey come as the National Federation of Sub-Postmasters warns that a further 3,000 post offices may be forced to shut if the government withdraws the right for post offices to handle pension and benefits payments through its post office card account.

COUNCILS CONSIDER LEGAL ACTION AGAINST BUILDERS ACCUSED BY OFT

Local councils are considering legal action against building companies accused by the Office of Fair Trading of cover-pricing and bid-rigging. David Greene, the solicitor behind the Northern Rock and Railtrack shareholder action cases, has been approached by councils to discover whether they have a case to bring against the construction companies. The OFT alleged last month that 112 companies had inflated the cost of schools, hospitals and universities by secretly discussing the prices they would submit to do the work.

The Daily Telegraph

BE WILL NOT BE SOLD TO LONE BIDDER

Despite the auction for British Energy BGY.L attracting interest only from EDF (EDF.PA) by last Friday's deadline, the government has ruled out selling the company to a lone bidder. The government, which owns 35.2 percent of BE, is holding firm on its decision that no one body should have full ownership of Britain's nuclear reactors. It is believed the government's preferred option would be to sell six sites to the winning company, leaving an opening for another firm, such as Centrica (CNA.L), to acquire the remaining two.

LLOYD'S OF LONDON CHIEF SAYS TAXES MAY FORCE INSURERS OFFSHORE

Lord Levene, chairman of Lloyd's of London, has warned the government that the UK tax regime will force more insurance companies to move offshore. He said: "This could make a real difference to our business. If their headquarters move to other countries, they might in due course look to do more of their business, currently transacted through London, overseas and we want to avoid that." Amlin and Brit Insurance have recently joined the ranks of companies threatening to leave the UK.

CALL FOR ACTION TO CLOSE PRIVATE EQUITY "LENDING LOOPHOLE"

The London-based Loan Market Association is expected to recommend an overhaul of lending rules this week to avoid conflicts of interest arising from private equity companies buying back their own debt at a discount. The LMA has conducted a review of syndicated lending conditions after some private equity companies bought back debt at a discount from banks keen to boost their balance sheets, and experts have predicted it will move to close these "lending loopholes".

The Independent

BRITISH ECONOMY LIKELY TO BE "WORSE THEN EXPECTED" IN 2009