Barclays is preparing to cut its investment bank by a fifth to appease the Bank of England (BoE), the Sunday Times reported. Chief Executive Antony Jenkins will announce the plan to sell £150bn of assets and slash annual costs by £1.7bn with the bank's full-year results on February 11t.h. The investment bank's profitability has shrunk because the BoE has required it to hold far more capital against its activities. Barclays will also revive the furore over bankers' pay by increasing its total bonus payout by 10% to £2.4bn.
Barclays has suffered an unprecedented security breach in which up to 27,000 confidential customer files were stolen and sold to sellers of scam investments, the Mail on Sunday reported. The stolen data, including customer earnings, savings, passport details and national insurance numbers, was revealed by an anonymous whistleblower who had worked at a rogue broker. Barclays has launched an investigation and promised to cooperate with police.
RSA investors have given Stephen Hester the nod to launch a £500m rights issue to plug a hole in the insurer's finances, the Sunday Times reported. Hester, the former Royal Bank of Scotland Chief Executive, was announced as RSA's new boss last week. His first job is to shore up RSA's balance sheet after extreme weather claims and an accounting scandal in Ireland left the group short of capital. An investor told the paper Hester's arrival lent credibility to any call on shareholder cash to boost capital. Hester is also likely to scrap the final dividend.
Vodafone has made a formal £5.8bn offer for Ono, a Spanish cable company, the Sunday Times said. Ono's board will discuss the bid on February 11th. The UK company has been talking to Ono's private equity backers for several weeks in its latest move to boost its European business. Ono is also considering floating on the Spanish stock market.
Miners Rio Tinto and Anglo American are likely to write off billions of pounds of assets in a bid to move on from a period of waste and bad decisions. The Sunday Times said Chief Executive Sam Walsh at Rio is expected to reveal up to £3bn of fresh writedowns on assets including its Australian mining business. Analysts expect Anglo American to make more than £1bn of writedowns including at least £600m on Brazilian nickel operations.
EeasyJet's founder, Sir Stelios Haji-Ioannou, plans to vote against £6.4m pay for the airline's Chief Executive, Carolyn McCall, the Sunday Telegraph said. The billionaire is likely to oppose easyJet's remuneration report at its annual meeting on October 13th. McCall's pay is up 74% from a year ago, boosted by long-term incentive payments.
Punch Taverns' lenders plan to block a restructuring plan for the pub company that they say benefits shareholders over other interests, the Sunday Telegraph said. The plan would cut Punch's net debt to £1.8bn from £2.3bn. Its Chairman Stephen Billingham has said rejecting the plan would lead to default and further uncertainty for the troubled group. But influential bondholders are working on an alternative plan and believe there is no need for a default.
AstraZeneca plans to combat heart disease in Africa by supplying large stocks of cheap beta-blocker drugs. The pharma giant is in talks with potential partners to make treatments available for a few pence a day, the Sunday Times said. The potential move is part of Chief Executive Pascal Soriot's efforts to restore AstraZeneca's fortunes.
Homeowners are locking in cheap borrowing costs because they are worried the Bank of England will increase interest rates, the Financial Times reported. The activity has pushed up the cost of five-year fixed mortgages, bringing an end to a period of ultra-low mortgage rates. RBS, Santander, Nationwide, Clydesdale and the Yorkshire Building Society all increased their rates last week after customer demand and wholesale funding costs rose.
Bank of England (BoE) Governor Mark Carney is battling to maintain his credibility with City investors as he gets ready to reveal changes to his forward guidance policy, the Sunday Times said. The BoE will on February 12th add a range of indicators to its previous threshold for raising interest rates of 7% unemployment. Carney has been accused of changing his criteria for tightening monetary policy to suit his goal of keeping rates on hold.
National Australia Bank is considering a potential £2bn flotation of its Yorkshire and Clydesdale banks in the UK, the Sunday Times said. The banks have been a drag on NAB and the bank is thinking of using a pickup in the UK economy to join a succession of banks expected to float in the next two years. NAB could sell shares
in the two banks by the end of this year but a sale to a rival such as Santander is also an option.
Banks in the Eurozone face a new capital shortfall of up to €50bn, one of Britain's most respected financial analysts told the Sunday Telegraph. Davide Serra, Chief Executive of Algebris and an adviser to the UK government, said stress tests on Europe's banks would reveal fresh problems, particularly in Germany. Banks in Portugal and Greece would probably need more capital and three or four regional banks in Germany are likely to be wound up.