PRESS DIGEST - Financial Times - Feb 5

The Financial Times

BANKERS' BONUSES SET TO HALVE

European investment bankers may see their annual bonuses cut by at least 50 percent as the backlash against government bail-outs adds pressure on banks to make cuts. Deutsche Bank (DBKGn.DE) will be the first major European bank to post its annual results on Friday and will inform its employees on their expected bonuses next week. Early indications reveal bonuses for its investment bankers could be cut by 60 percent as European banks aim to follow their U.S rivals who reduced bonus payouts by an average of 44 percent last year. Brady Dougan, Credit Suisse (CSGN.VX) chief executive, said it was aiming for a "significant reduction" in costs, while UBS (UBSN.VX) said it would cut bonuses by 80 percent.

THREAT TO AVIVA POLICYHOLDERS' WINDFALL

The insurer Aviva (AV.L) warned its policyholders could miss out on a large windfall as it confirmed it will cut a promised one billion pound pay-out for more than a million policyholders. Aviva said since the value of surplus had fallen, the deal struck last year was no longer fair to share or policyholders. Chief executive Andrew Moss said the insurer was trying to free surplus capital in two life funds in a restructuring deal that would have paid out an average of a thousand pounds to each policyholder.

JD SPORTS STEALS LEAD AS TEENS SHRUG OFF THE DOWNTURN

Sportswear chain JD Sports Fashion (JD.L) issued a surprise statement saying sales growth had been maintained during January after it had previously predicted that sales would drop after the Christmas and New Year period. JD said pre-tax profit for the year till the end of January would exceed market predictions, though only marginally. Executive chairman Peter Cowgill said many of its customers were teenagers who were largely unaffected by the credit crunch and were still determined to buy the latest sports gear.

BHP READY TO MAKE ACQUISITIONS

BHP Billiton (BLT.L) said cash flows of nine billion pounds in the first half had reduced gearing to less than 10 percent. The chief executive of the world's biggest mining group, Marius Kloppers, said its balance sheet put the group in a privileged position to buy international mining assets "as others falter". BHP has previously revealed an interest in buying joint-venture projects it runs with Rio Tinto (RIO.L), which it failed to buy in 2008. Alex Vanselow, chief financial officer of BHP, said one of Rio Tinto's most attractive assets was its 30 percent stake in the Escondida copper mine in Chile of which BHP owns 57.5 percent. Vanselow said: "This is a tier one asset we know well and (buying out Rio) is something we would clearly consider."

BP REINS IN D1 ALTERNATIVE ENERGY PLANS

BP (BP.L) and D1 Oils (DOO.L) have cut back their plans for expansion and are now looking for new investors in their joint biofuels venture which began in 2007. BP has recently ended its wind power business outside the United States as well as pulling the plug on two projects for power stations that could capture and store their carbon dioxide emissions. D1 said it planned to "tighten the business' geographic focus, reduce the overhead base and contain short-term cash requirements". BP's chief executive Tony Hayward said: "The mantra at BP today is, 'Every dollar counts'."

STERLING'S PLUNGE ADDS TO DEBT BURDEN AT SAGE

Software group Sage (SGE.L) said its debt levels rose in the last three months because of the weakness of the pound. Net debt rose from 541 million pounds to 649 million pounds as a direct result of currency translation. However, the Newcastle-based company said it was comfortable with the amount of debt and looked towards the strength of its subscription services business in offsetting any impact of a subdued market for software and related services.

LENDERS TO TAKE OVER AT ESPORTA

According to sources close to the situation, Societe Generale is in the process of a debt-for-equity swap to buy the Esporta fitness club operator. Esporta, which was bought by property entrepreneur Simon Halabi for 476 million pounds in 2006 in a deal backed by SG, has been beset with difficulties ever since. Both its finance director and chief executive left shortly after the acquisition, membership is reportedly down and its parent companies were placed in administration in 2007.

WOLFSON SUFFERS SHARP SALES FALL