The Bank of England will question Royal Bank of Scotland over its capital position in the next two weeks, the Sunday Telegraph reported. The BoE's Prudential Regulatory Authority arm will call in RBS boss Ross McEwan to check on the bank's capital strength in light of his strategy review, due February 27th. The PRA wants to know how McEwan can strengthen RBS's balance sheet after flagging up more than £7bn of writedowns and conduct provisions recently. PRA head Andrew Bailey wants to know how RBS would fare if serious problems were to hit the banking sector.
The unusually warm December will affect profits at British Gas when its parent Centrica posts its results this month, the Sunday Telegraph reported. The company had been expected to announce household supply profits down 2% to £592m for 2013 but they are now more likely to fall 6% to £570m. A fall in British Gas profits could be convenient in the short term amid public controversy about household energy bills, the paper said.
Vodafone is preparing for a big fall in overseas revenues because of problems engulfing emerging economies in Asia and Africa, the Sunday Times said. The mobile phone operator has businesses in India, South Africa an Turkey, three of the countries in the middle of recent market ructions. The rising pound is likely to have caused a 5% fall in revenue for the last three months of 2013 but it is set for bigger problems from the withdrawal of money from emerging markets in the last month.
Lloyds Banking Group is in late-stage talks with regulators about paying its first dividend since 2008, the Mail on Sunday reported. Analysts expect a dividend of up to 1.5p a share when Lloyds announces full-year results on February 13th. Lloyds is keen to make the payout, which could total £350m, but the idea could be abandoned depending on how much it has to set aside to compensate customers for past misspelling scandals.
Ocado, the online food retailer, is to commission a third UK distribution centre after its distribution agreement with Morrisons got off to a good start, the Sunday Telegraph said. Ocado boss Tim Steiner is expected to announce the plan at the company's annual results this week. The new customer fulfilment centre would cost £200m. Ocado will consult Morrisons before deciding where to place the warehouse and the companies are likely to share the costs.
A crisis in China's financial system is posing an increasing risk to international banks, the Sunday Telegraph reported. Charlene Chu, a respected analyst who works for Autonomous Research, told the paper the country's growing reliance on foreign funding left it more vulnerable to swings in investor appetite. Fears are growing that growing foreign borrowing by the Chinese is driving a bigger buildup in risk than there was before the crisis of 2008.
Barclays is the top adviser on initial public offerings in the UK ahead of a predicted surge in flotations, the Sunday Telegraph said. The bank was ahead of Goldman Sachs and other US investment banks in working on seven of the 15 deals of 2013, data company Dealogic said. More than 20 companies could complete IPOs before the summer.
GlaxoSmithKline and AstraZeneca are ready to announce a host of potentially successful drugs, casting off the gloom that has dogged the UK pharmaceutical sector, according to the Sunday Times. GSK is likely to say up to 10 new treatments are soon to enter late-stage clinical trials. AstraZeneca is also likely to be positive about its pipeline of treatments under development. They have been struggling to match the success of treatments developed in the 1980s and 1990s but analysts think research and development has improved.
Banks could pay bonuses worth eight or nine times their salary after finding a loophole to avoid European limits on payouts, the Sunday Times said. Royal Bank of Scotland is considering using the trick and Barclays is already doing so. The European rule says banks cannot pay employees more than 100% of their salary, or twice their salary with special permission, to employees. But PwC, the accountancy firm, said a big majority of banks would pay monthly "allowances" to increase take-home pay.
Fears about currency wars are increasing after emerging market central banks stepped in to try to shore up their currencies, the Sunday Telegraph reported. Turkey depends on short-term funds, so-called "hot money" for 80% of its trade deficit. Argentina has given up trying to support the peso and Russia has promised unlimited action to protect the rouble. Talk of capital controls are increasing and even the World Bank has accepted that it is better to have some influence on capital flows than none.
Ryanair's Chief Executive, Michael O'Leary, will withdraw from his role as the public face of the airline after it released two profit warnings in quick succession last year. The Sunday Telegraph said the company is preparing to report its first third-quarter loss since 2010 and wants to present a more customer-friendly image. Michael Cawley, the departing Deputy Chief Executive, will present Ryanair's quarterly results on February 4th.
B&M Retail is preparing for one of the biggest flotations this year, according to the Sunday Times. The discount retailer, based in Liverpool with 350 stores and 2m customers, is likely to be valued at £2bn when it goes public. The company is regarded as similar to Woolworths because it sells a wide range of goods. It is chaired by former Tesco boss Sir Terry Leahy. B&M stores are mainly in North England but it is expanding southwards fast.
BAE Systems' Chairman Sir Dick Olver is to be paid for another three months after stepping down last week, the Sunday Times said. Honouring his contract, which runs till May 16th, will cost BAE about £215,000. BAE said it was paying him to "enable a seamless succession" to new Chairman Sir Roger Carr.
Gulf Marine Services, Brit Insurance and a fund that specialises in buying Spanish and Irish property are all preparing to float their shares, the Sunday Times said. Gulf Marine Services makes rigs to service oil platforms and erects offshore wind turbines. Its Middle East owner has hired Rothschild to advise on a £600m float. Brit is likely to float for about £900m in the next three months. Californian property giant Kennedy Wilson wants to raise £750m for its fund which snaps up property bargains in Spain and Ireland.
AO.com, formerly Appliances Online, is preparing for a flotation that will value the internet kitchen appliances seller at about £1bn, the Sunday Times reported. The flotation will create a £400m payday for its founder, John Roberts. Pretax profit has risen to £8.1m from £500,000, since 2009, the paper said.