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Wednesday newspaper round-up: HSBC, Ryanair, Scottish & Southern Energy

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Date: Wednesday 09 Apr 2008

LONDON (ShareCast) - HSBC is preparing to exploit rivals’ weakness in the mortgage market with an audacious offer to match homeowners’ existing deals.

The UK’s biggest bank, which has only 3 per cent of the market, is targeting the 1.4m customers who come off cheap fixed-rate deals this year to face a sharp rise in mortgage costs, reports the FT.

Alistair Darling will today suffer humiliation as the world's leading economic institution slashes its UK growth forecasts and warns that Britain faces the weakest two years of growth since the last recession a decade and a half ago. The International Monetary Fund (IMF) will predict economic expansion of a mere 1.6% both this year and in 2009 in its World Economic Outlook. As well as coming in significantly below the Treasury's projections, this is the weakest growth since the early 1990s, reports the Telegraph.

Meanwhile, losses from the credit crisis by financial institutions worldwide are expected to balloon to almost $1 trillion (£507bn), threatening to trigger severe economic fallout, the International Monetary Fund said yesterday. In a grim assessment of the deepening crisis delivered days before ministers from the Group of Seven leading economies meet in Washington, the IMF warns governments, central banks and regulators that they face a crucial test to stem the turmoil, reports the Times.

Citigroup is close to selling $12bn (£6.1bn) of its leveraged loans to a trio of private equity houses in its latest attempt to draw an end to its own credit crisis. The deal – which, it is understood, is being negotiated personally by Citi chief executive Vikram Pandit – involves Blackstone, TPG and Apollo Management buying the loans at a discount of approximately 90 cents in the dollar, writes the Telegraph.

Boeing is expected to announce today that its 787 Dreamliner has been delayed by 18 months, a setback that will cost the company billions of dollars in compensation to airlines. Sources close to Boeing said the American aerospace giant will admit that the revolutionary aircraft is unlikely to enter service until the end of 2009, reports the Times.

Citigroup is close to selling $12bn (£6.1bn) of its leveraged loans to a trio of private equity houses in its latest attempt to draw an end to its own credit crisis. The deal – which, it is understood, is being negotiated personally by Citi chief executive Vikram Pandit – involves Blackstone, TPG and Apollo Management buying the loans at a discount of approximately 90 cents in the dollar. FT

Two of Britain’s biggest energy companies could face fines totalling as much as £2.57bn after Ofgem, the energy regulator, launched an investigation into alleged abuses of their dominant market position in Scotland. The allegations are linked to an incident last September and October when Scottish Power and SSE took a number of power stations in Scotland offline for maintenance, reports the Times.

Ryanair is facing prosecution and a substantial fine for repeatedly misleading passengers about the availability of its cheapest fares. The airline has breached the Advertising Code seven times in the past two years and has failed to heed warnings by the Advertising Standards Authority. The authority is publishing today its decision to refer Ryanair to the Office of Fair Trading, says the Times.

Shares in GW Pharmaceuticals lost more than a quarter of their value yesterday after the announcement that a trial of its cannabis-based drug Sativex had failed its final phase of testing, reports the Independent.