Recruitment firm JCA Group have been commissioned by Lloyds Banking Group (LLOY.L) chairman Sir Win Bischoff to draw up a report on potential successors to chief executive Eric Daniels. Lloyds' shareholders remain angry about Daniels' acquisition of troubled bank HBOS in 2008, which has destroyed billions of pounds of value and forced the bank into requiring a taxpayer-funded rescue. Lloyds said they have no plans to replace Daniels, claiming the report is just "a contingency planning exercise as part of good governance."
Details buried in Barclays' (BARC.L) annual accounts show the bank raided the pension benefits of 17,000 front-line staff to offset tax on the bonuses of its high-earning investment bankers. Barclays profited by 371 million pounds from closing its final salary scheme to existing members last year, with a "voluntary" top up of 150 million pounds reducing the net figure to 221 million pounds. The figure is almost the equivalent to the 225 million pounds Barclays paid in tax on the 2.2 billion pounds it awarded Barclays Capital staff. Barclays said changes to the pension scheme were made before any decisions on the bonus tax were made.
RBS BACKDATES BENEFITS TO BOOST PAY AFTER BONUSES REDUCED
The decision to backdate an increase in "benefits" to January 2009 has resulted in middle managers at Royal Bank of Scotland (RBS.L) receiving a bonus equivalent to five percent of their salary. Thousand of RBS staff have received the addition to their "value account", which is used to buy benefits such as a company car, with unused sums paid in cash at the end of the tax year. The payment will cost the bank between 30 and 40 million pounds a year and will even see staff made redundant over the past year benefiting.
NEW CODE PROPOSED TO BETTER ALIGN BONUSES WITH PERFORMANCE
The Future of Banking Commission, which brings together politicians and financial experts, is considering a new pay code for bankers that would exclude leverage from bonus calculations. The idea has been championed since last May by Andrew Haldane, director of financial stability at the Bank of England. Haldane said: "Since 2000, rising leverage fully accounts for movements in UK banks' returns. Good luck and good management need to be better distinguished." The proposals have also gained backing from activist asset manager Knight Vinke.
Diageo (DGE.L), the brewer behind the Guinness brand, is to sell Windhoek, Namibia's number one beer, in UK supermarkets and bars from next month. The company said that the beer will initially be targeted at South African expats living in London, who are already familiar with the brand. Windhoek is brewed by Namibian Breweries, a family firm in which Diageo has a 15 per cent stake. The move marks the first time that the beer has been sold outside of Africa.
It is expected that four employees of the mining giant Rio Tinto (RIO.L) will on Monday be sentenced to between five and 15 years in prison in China. The four men, including Stern Hu, Rio's head of iron ore operations in China, admitted last week to taking bribes allegedly paid on the understanding that Rio's iron ore would be funnelled towards private Chinese steel mills. One man faces a further four to seven years after confessing to stealing commercial secrets. Experts in Chinese law said that a decision to exclude Australian consuls from part of the trial violated Chinese law.
Engineering services group Babcock international (BAB.L) will on Tuesday deliver a trading update for the year to the end of March. The company is expected to announce that earnings for the year will rise at a similar pace to that seen in the six months to the end of September, when pre-tax profit rose 30 per cent to 66.1 million pounds. Babcock last week signed a 15-year deal ensuring its position as the main support services provider to the Royal Navy.
British Gas BG.L will this year install one million smart meters in residential homes as part of a programme which will create 2,500 jobs and cut household energy bills by at least one billion pounds over the next decade. The meters provide real-time information on energy use to producers and consumers, giving households encouragement to switch off power-hungry appliances when not in use. Ian Peters, chief operating officer of British Gas, said: "We want to take a leadership role. this will transform our relationship with our customers. Instead of merely sending them a bill, we will be able to advise them on energy efficiency methods and how to cut their usage".
THOUSANDS MORE JOBS ON THE LINE AS FINANCE CHIEFS WIELD THE AXE
A new report by the business lobbying group The Confederation of British Industry has predicted that around 17,000 people working in the financial services industry will lose their jobs during the first half of 2010. The CBI's latest survey of financial services companies, conducted in conjunction with accountancy firm PricewaterhouseCoopers, showed that financial firms had aggressively cut staff during the first quarter of this year, and that further cuts are likely. Ian McCafferty, CBI chief economic adviser, said that 10,000 jobs are already likely to have been lost, and that a further 7,000 are likely to be cut in the current quarter. The findings were published as fears grow of an economy-wide rise in unemployment.
PENSION FUNDS SAY "RETIRE LATER AND GIVE UP YOUR BUS PASS"
The National Association of Pension Funds will on Monday urge the government to consider raising both the retirement age and employees' national insurance contributions in order to fund a higher basic state pension. Under the NAPF's proposals, a reformed state pension would pay an initial retirement income of 8,000 pounds per year, equivalent to a rise of 25 pounds per week over current levels. To pay for the plan, the body has called for an increase in the retirement age to 70 by 2046 and a hike in employee contributions, as well as the scrapping of some fringe benefits currently given to pensioners, such as free bus travel and non-means tested winter fuel payments.
The House of Lords communications committee has criticised the government's lack of readiness for the national switchover to digital radio in 2015. The committee stated that more needs to be done to inform the public about the change, particularly as large numbers of analogue radios, which will only be able to receive local radio after the switch, are still being sold by manufacturers. Financial assistance to people on low incomes, who would otherwise be unable to buy a digital set, has also been proposed by the committee.
UK Music, the group representing British record labels, artists and managers, has claimed in its "Liberating Creativity" manifesto that the UK has the opportunity to overtake the USA as the biggest producer of music during the next 10 years, if government assistance is provided in the form of a "creative industries cabinet committee". The lobby is asking for greater support for the British music industry through such means as easier access to finance, the extension of EU legislation of copyright from 50 to 70 years, and the relaxation of venue licensing to allow grass-roots artists to perform in more pubs and small clubs.
The pension consultant and administrator Punter Southall is to release its annual report on Monday. The study, which looked at 330 British employers with workplace pension provision between December and January, will indicate that around 25 percent of British workers have responded to cuts or freezes in pay by reducing or stopping their pension contributions during the financial crisis and recession. Most employers were unimpressed with the pensions policies of all three main political parties.