PRESS DIGEST - Financial Times - Nov 29

SAVINGS OFFERS SET TO DISAPPEAR AS BANKS PASS ON INTEREST RATE CUTS

Easy access saving accounts offering rates over six per cent are about to disappear as banks and building societies, including Nationwide, Alliance & Leicester, Royal Bank of Scotland (RBS.L) and NatWest, cut their interest rates. According to Moneyfacts.co.uk, more than half of all savings providers, including Northern Rock NRK.L and HSBC (HSBA.L), have now reduced their rates, while those that have not yet made alterations are probably waiting for an extra 0.5 percent interest rate reduction, predicted to be decided by the Bank of England next week. Yet analysts believe that even if the BoE proceeds to such a move the banks will maintain relatively competitive savings rates in the near future as they are in need of a good level of retail inflow.

MORTGAGE LENDERS TOLD TO BE FAIR OVER ARREARS

The Financial Services Authority has warned mortgage lenders they could face penalties if they do not treat borrowers who go into arrears fairly. The regulator reminded lenders of their obligations and added it expected a reconsideration of their policies, at a time where a sharp increase in arrears is expected due to the economic crisis. Jon Pain, FSA's managing director of retail markets, said: "Where we find that lenders are not complying with our requirements we will make appropriate and properly targeted use of our existing regulatory tools." Figures from the Council of Mortgage Lenders have shown that the number of loans three months or more in arrears increased 8 percent to 168,000 in the three months to September.

LIPSEY RESIGNS AS CHAIRMAN OF CONSUMER FINANCIAL BODY

Lord Lipsey, the chairman of the Financial Services Consumer Panel, has stepped down just six months after taking up his responsibilities after both the 12-member body and the Financial Services Authority did not support his plans to turn FSCP into a group that would not only provide advice to the FSA but would also lobby in favour of consumer interests. FSA chairman Lord Turner said: "We will continue to support fully the Consumer Panel in providing independent advice on the FSA's policies as they are developed, and believe that is where the panel has a very important role to play." Lord Lipsey's post will be taken over by vice-chairman Adam Phillips until a replacement is found.

AMLIN PULLS OUT OF CREDIT INSURANCE MARKET

Insurer Amlin (AML.L) has delivered another blow to the beleaguered credit insurance sector after announcing its complete withdrawal from the market. The company decided not to issue any new policies for businesses offering goods to other businesses on credit, partly due to problems securing reinsurance. Amlin, which holds about four percent of the UK credit insurance market, is believed to be in early-stage talks with other parties to see whether a company will enter to renew existing cover. Chief executive Charles Phillips said: "This is not a big part of our business, and taking a long-term view we think it will be extremely difficult to make a return."

COLLAPSE OF BROKER ECHELON HITS LEGENDARY

On Friday, Legendary Investments (LEGL.L) were forced to suspend trading in their shares on the Alternative Investment Market after they unveiled they may not be able to access the bulk of their cash reserves for many years after the collapse of their broker Echelon Wealth Management earlier in November. KPMG, the liquidator to the broker, told Legendary, Shami Ahmed's investment vehicle, that it has begun an investigation into Echelon's failure and it was pursuing a number of different means of recovering funds for creditors.

WHITEHALL COST-CUTTER TAKES OVER TATE HELM

Sir Peter Gershon has been appointed by Tate & Lyle (TATE.L) as the group's new chairman, as part of a recent boardroom revamp following last year's three profits warnings. Sir Gershon, who in 2000 joined the civil service as founding chief executive of the Office of Government Commerce, will replace Sir David Lees before the end of the next year. He is expected to join the company's board as a non-executive in February. The news comes three weeks after the sugar and sweetener group reported a strong increase in revenue and a jump in interim profits.

INDY GETS COSY WITH DAILY MAIL TO CUT COSTS

In a bid to save about two to three million pounds a year, the Independent newspaper will move its reduced staff into the same office building as the Daily Mail. Analysts believe that this move, along with the axing of 90 staff out of its 424 workforce, will help the Independent titles, which suffer a 10 to 12 million pounds annual loss, to cope with the crisis. Several recent figures have shown that UK newspaper groups face very tough market conditions, revealing declines in operating profit and sales while painting an even bleaker picture for 2009.

BSKYB APPEALS ON ITV STAKE RULING

Pay-TV group British Sky Broadcasting (BSY.L) has lodged an application for permission to appeal a court ruling in a bid to retain its 17.9 percent holding in competitor broadcaster ITV (ITV.L), the company said in a brief statement on Friday morning. Last month, the Competition Appeal Tribunal upheld an original judgment by the Competition Commission that BSkyB broke competition laws by holding the stake. Simon Lapthorne, analyst at Blue Oar Securities, commented on the news: "Put simply, BSkyB does not want to lose hundreds of millions of pounds."

SIR PHILIP SELLS HIS MOSS BROS STAKE

Retail tycoon Sir Philip Green has sold his 28.5 percent stake in Moss Bros, to a trust headed by Simon Berwin, the owner of Leeds-based Berwin and Berwin. Having banked 1.05 million pounds on the deal, Sir Green said on Friday night: "The man had very clear circumstances why he wanted to buy it and I am pleased we found a home for it with someone who wants the best for shareholders, so everyone is happy and I wish him the best of luck." Mr Berwin said he did not plan to bid for the suit hire specialist, claiming that he now holds a 29.99 percent stake, just below the 30 percent figure required to activate an automatic offer. Shares in the group edged up 1.75 pence at 18.75 pence.

FOCUS SEEKS RENT RELIEF FROM LANDLORDS

DIY chain Focus has asked property landlords for concessions in rental terms, including a move from quarterly payments to monthly ones, as well as rent cuts or space surrenders where needed. Chief executive Bill Grimsey said the move was designed to make sure the company, which operates from 180 sites across the UK, was "in shape to weather the financial storm that will hit next year." On Friday, a group of retailers reached a significant agreement with some of the property industry's biggest landlords to allow retailers with three shops or less to pay rent monthly in advance.

Prepared for Reuters by Durrants