Monday newspaper round-up: Lloyds Banking, Royal Bank of Scotland, Xstrata

Date: Monday 22 Feb 2010

The chief executive of Lloyds Banking Group was under intense pressure yesterday to give up his bonus after the head of rival Royal Bank of Scotland (RBS) rejected a £1.6m reward.

Eric Daniels is entitled to a maximum bonus of £2.25m for 2009. However, accepting any sum would put the Lloyds banker in an uncomfortable position after Stephen Hester, RBS’s chief executive, became the third major banking figure in six days to forgo lucrative awards, the Times reports.

Britain's big two zombie banks are expected to report another year of huge losses when they reveal their full-year results this week, igniting a fresh storm over bonuses. Analysts expect Royal Bank of Scotland (RBS) – which reports on Thursday – to unveil pre-tax losses of £5.1bn for 2009, against £8.3bn the previous year. Lloyds will report a small profit, largely thanks to accounting quirks. However, its "underlying" loss could come in at as much as £13bn. Lloyds said the question of Mr Daniels' bonus was "a matter for our remuneration committee,” adds the Independent.

Glencore, the Swiss commodities trader, is sounding out potential partners as it prepares to buy back the $2.5bn Prodeco coalmine owned by Xstrata, The Times has learnt. The Swiss trading group is understood to be discussing a possible deal with Vale, the Brazilian miner, and GIC, the Singaporean sovereign wealth fund. It is also believed to have held talks with First Reserve, a US-based investment fund, and Alpha Natural Resources, an American coal producer.

EMI, the struggling record label and music publisher, will not sell its world-famous Abbey Road studios but is instead in talks with third-party investors to help it finance a "revitalisation" of the North London complex. EMI said on Sunday that it is in discussions with potential parties "with a view to them financing these plans and maintaining this unique venue", the Telegraph reports.

Alistair Darling will today move to reassure international businesses that Britain under Labour will not impose surprise tax changes on them. The Chancellor will publish a draft document entitled Tax Framework for Multinationals, which promises to consult large corporations on new business levies and pledges to ensure that tax legislation does not place firms at a competitive disadvantage or trigger vast amounts of red tape, the Times reports.

US analysts believe they have identified the Chinese author of the critical programming code used in the alleged state-sponsored hacking attacks on Google and other western companies, making it far harder for the Chinese government to deny involvement. Their discovery came after another team of investigators tracked the launch of the spyware to computers inside two educational institutions in China, one of them with close ties to the military, the FT reports.

A last-minute rush to accelerate the payment of bonuses ahead of April’s introduction of the 50p tax rate for high earners is under way, amid mounting anger by top executives over the squeeze on their take-home pay. Advisers said there had been a surge in interest since new year from businesses wanting to shift the timing of payments or introduce tax-efficient plans to avoid the new top tax rate, the FT reports.

Canary Wharf’s hopes of taking the crown as London’s main financial centre have suffered a new blow as it emerged that JP Morgan is scouting for office locations back in the City. The US investment bank is considering backing out of its £1.5 billion European headquarters development in Canary Wharf and is understood to be looking at other development sites and existing office buildings, as it reviews its plans for its HQ, the Times reports.

SR Technics, the maintenance company that oversees the easyJet fleet, is to close operations at Stansted airport, throwing 345 aviation engineers out of work. The company, which is controlled by Mubadala Development, the investment arm of the Abu Dhabi Government, has told workers that it is selling the lease at the airport and moving the operation to its Zurich headquarters, the Times reports.

Diageo, the world's biggest spirits maker, is focusing its marketing efforts on wooing British drinkers to spend their money in supermarkets rather than at the pub, as the recession continues to squeeze discretionary spending. As the downturn has accelerated the trend for drinking at home, the company is strengthening its relationships with the UK's biggest retailers to try and increase its share of a market where growth is sluggish, the Telegraph reports.

Several private-equity firms have made first-round bids for Cath Kidston, the floral clothing and homewares retailer, that is up for sale for at least £75m. Silverfleet Capital, Inflexion, Barclays Private Equity, Darwin and ISIS are among those that submitted first-round offers on 29 January and are expected to press ahead with second-round bids for the 35-store retailer in the next fortnight, the Independent reports.

More than £1bn of shopping centres will change hands in the next few weeks as investment activity in the commercial property sector has accelerated following the sudden influx of money into institutional and retail funds. In the largest deal, Meyer Bergman, the private equity real estate fund manager, will this week agree to buy a half-share in the Bentall shopping centre in Kingston, Surrey, from Aviva, for about £130m, the FT reports.

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