PRESS DIGEST – British business – Jan 30

The Times

AVIVA AND STANDARD LIFE TO REVEAL DECLINES

The reporting season for UK insurance companies begins next
week, with Aviva (AV.L: ) and Standard Life (SL.L: ) announcing
their full-year results. A sample of 11 City analysts by Aviva
indicates the company will record a fall in global life and
pensions sales of 13.7 percent to 31.3 billion pounds for 2009.
A similar survey of 13 analysts by Standard Life concluded that
it would disclose a 25 percent drop in new sales to 1.83 billion
pounds over the course of the year.

CONNAUGHT SHARES SLIP AS CHIEF RESIGNS

The repairer of UK social housing Connaught (CNT.L: ) has lost
its chief executive. Mark Davies unexpectedly resigned from the
company with immediate effect, giving “new challenges” as the
reason for his departure. His position will be filled by the
executive chairman Mark Tinckell from next Monday. The surprise
exit of Davies sent Connaught’s share price tumbling 11 percent
to 320.2 pence in yesterday’s trading, making the company the
biggest faller in the FTSE 250.

BRITISH AIRWAYS HEADS FOR ONE BILLION POUND LOSS DURING
RECESSION

It is anticipated that the release of British Airways’
(BAY.L: ) results for the three months to the end of December 2009
will expose more grievous losses at the airline. BA is expected
to reveal a loss of 151 million pounds for the third quarter of
the financial year, which would bring total losses up to the end
of March to 602 million. Such a figure would exceed the 401
million pound loss recorded for 2008, itself a record. The
threat of strikes prior to Christmas and very bad weather are
two factors that have exacerbated the company’s already poor
situation.

BP TURNS TO FORMER BHP BILLITON CHIEF EXECUTIVE

The oil group BP (BP.L: ) has appointed Paul Anderson, a
former chief executive of the mining company BHP Billiton
(BLT.L: ), as a non-executive director. Anderson joins the board
to fill the vacancy created by the departure of Sir Tom McKillop
last March, who left after BP shareholders complained that he
was a liability to the company, citing his record in his
previous role as chairman of the now part nationalised Royal
Bank of Scotland (RBS.L: ). Anderson’s appointment is likely to be
the start of significant boardroom changes led by both the new
BP chairman, Carl-Henric Svenberg, and chief executive Tony
Hayward, with three other non-executive directors set to retire
either this year or early in 2011.

The Independent

WARBURG PINCUS PAYS 280 MILLION POUNDS FOR SURVITEC

The U.S. private equity firm Warburg Pincus [WP.UL] has
completed the purchase of Belfast-based survival equipment maker
Survitec for 280 million pounds. Survitec was aquired by
Montague private equity for 146 million pounds in 2004, in which
time the company has earned more than twice Montague’s initial
investment. The deal is the third-largest British buy-out deal
announced in the past three days following Advent
International’s purchase of the pensions consultancy Xafinity
and KKR’s purchase of the retailer Pets at Home.

The Guardian

EU CALL SPARKS INTEREST IN SALE OF 318 RBS BRANCHES

Part-nationalised UK banking group Royal Bank of Scotland
(RBS.L: ) has received several expressions of interest from
potential bidders for the 318 retail branches that it is being
required to sell off by the EU as part of a penalty for having
received state aid. The initial deadline for potential bidders
to request information about the sale was Friday but sales may
not be completed for a year. RBS has said it is making progress
in reducing the size of its balance sheet and that it is working
in the interests of customers and shareholders.

The Daily Telegraph

BARCLAYS CLAIMS IT IS STILL OWED THREE BILLION DOLLARS.

Barclays (BARC.L: ) says it is still owed three billion
dollars in securities assets held by investment bank Lehman
Brothers. The claim relates to a September 2008 deal in which
Barclays agreed to buy the bulk of the assets of Lehman
Brothers’ U.S. brokerage business. Lehman’s estate has
previously said Barclays should return an alleged five billion
pound “secret” profit on the deal. A New York bankruptcy court
trial is set for April 26, with a judge expected to rule on what
is owed to each institution.

LLOYDS SELLS FIRST U.S. BOND SINCE CRISIS

The successful placing of 2.5 billion pounds of mortgages
with investors by Lloyds Banking Group (LLOY.L: ) has raised hopes
that securitisation markets are reopening for banks. A four
billion pound issue last September by Lloyds represented the
first attempt by a bank to tap the securitisation markets since
the onset of the credit crisis, but Friday’s issue was the first
to find interest among U.S. investors for prime residential
mortgage securities. The issue price of 115 basis points over
Libor compares to September’s issue at 170 points above Libor.

FSA TO ENFORCE FIVE-YEAR TENANCIES IN THE
“SALE-AND-RENT-BACK”

New Financial Services Authority guidelines for the
“sale-and-rent-back” sector rule that companies offering to buy
a property from the owner and rent it back to them must
guarantee tenancies for five years. The FSA also said
affordability checks must be carried out on customers, who will
be given a 14-day cooling off period in which to consider
whether to pursue a deal. The use of emotive phrases such as
“mortgage rescue” and “cash quickly” will be prohibited in
advertising. The regulation will come into effect on June 30.

Stock Market Report

Prepared for Reuters by Durrants

PRESS DIGEST – British business – Jan 30