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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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RBS ‘ready to privatise in a year’

Category : World News

The chairman of Royal Bank of Scotland (RBS) says the bank will be ready to return to the private sector next year, as it reports a return to profit.

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RBS ‘ready to privatise in a year’

Category : Business

The chairman of Royal Bank of Scotland (RBS) says the bank will be ready to return to the private sector next year, as it reports a return to profit.

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Cable wants RBS prosecution decision

Category : Business, World News

Business Secretary Vince Cable writes to the Scottish legal authorities urging a rapid decision on whether to prosecute former directors of RBS.

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RBS faces IT failure investigation

Category : World News

Computer problems that affected RBS customers last summer are to be investigated by the Financial Conduct Authority.

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Ed Miliband is right, Britain lacks local banks – RBS could fill that void | Tony Greenham

Category : Business

Why not convert a large, publicly owned bank into a network of local banks like those that operate successfully in Germany?

Ed Miliband’s speech to the British Chambers of Commerce today marks an important step towards filling a vital gap in our banking system – the place where you live.

The UK banking system, dominated by a handful of national and international banks, is highly unusual internationally. Many of our industrial competitors, including Germany, France, Switzerland, Canada and the US, have a diverse range of successful financial institutions in their economies. Crucially, they all have financial institutions that are wedded to their local area. The Labour leader has now come out in favour of a new UK network of local banks, which would finally give British small businesses and local communities the sort of financial services enjoyed in other countries.

There is plenty of evidence from around the world to suggest that local banks are better at lending to SMEs, improving the stability of the financial system, reducing regional economic inequalities, increasing financial inclusion and providing healthy competition to the giant banking groups.

The UK could clearly benefit from some level of local banking infrastructure, but to grow such a sector organically is, at best, a long-term solution with little chance of capitalising on the current political opportunity for reform.

Enter, then, the Royal Bank of Scotland: a large, publicly owned bank that, for the foreseeable future, will not pay its way by selling it to the private sector. This presents the UK with a genuinely unique opportunity to ask the question: what is the most useful thing you can do with a bank like RBS? With its extensive branch network, a significant share of the retail banking market and large existing customer base, there are numerous possibilities, including converting RBS into a network of local banks, like that seen in Germany.

There are three key elements to success of the 422 German sparkassen, the local authority-owned banks that account for more than a third of the German banking industry and are the primary lenders to SMEs (approximately 75% of German SMEs have a relationship with their local sparkasse).

First, each local bank can only operate within a defined geographical area. This means they are forced to really get to know the local economy and the businesses in it, as they are unable to concentrate on making easier money in wealthier areas of the country.

In addition, local banks generally have a stakeholder governance structure with an executive board made up of banking professionals who have operating responsibility and report to a supervisory board, which is generally composed of a wider group of stakeholders including staff, representatives of local government, customers, trade unions and industry associations. These two factors help ensure that the bank works in the local people’s interest.

Second, the banks aim to maximise value added to the local economy, rather than simply shareholder profits. For the sparkassen, profits are considered a means to financial sustainability rather than an end in itself. As they have an explicit mission to contribute to the success of the local economy, local banks cannot reallocate capital to more profitable but socially useless activities, such as financial speculation or helping global corporations to avoid tax.

Finally, while each individual local bank is autonomous, they collaborate in a network to gain cost efficiencies, serve larger corporate clients and increase financial security. By mutually owning specialist financial companies, pooling liquidity and funding and providing mutual guarantees to one another, they have learned how to combine the best of local banking with the advantages of size.

We mustn’t squander the window of opportunity we have with RBS. So far Vince Cable has shown the greater willingness to think creatively about its future, but fixing the UK’s banking system for the long term is a chance for Miliband to define his leadership and the Labour party.

More than 500 bankers paid £1m-plus

Category : World News

A total of 428 employees at Barclays and 93 at RBS earn more than £1m last year, the banks disclose.

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RBS sorry for disruption to services

Category : Business, World News

Royal Bank of Scotland says all services are back to normal and apologises to RBS and NatWest customers who faced disruption on Wednesday night.

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RBS’s sale is running to a political timetable, not a financial one

Category : Business

On optimistic estimates, reforms might be complete at Hester’s bank before the next election. But no one will know if it will be even worth investing in until weeks before the poll

Roll up, roll up, who wants to buy a share in a loss-making bank that may need more capital and has yet to spin off two subsidiaries?

This opportunity may soon be yours, fellow citizen. Sir Philip Hampton, chairman of Royal Bank of Scotland, said on Thursday he hoped the government would be able to sell part of its 82% stake “as soon as possible” and that it would “be good if we could make that 2014″.

However, meeting that timetable would be going some. There is no iron rule that says RBS has to be a “normal” bank at the point of privatisation. But that has always been the expectation and it is adventurous to think that the goal could be achieved by, say, the autumn of next year. It feels about a year too soon.

Think of the long list of things that still have to happen at RBS. The final stage of restructuring the investment bank has to be undertaken, and more non-core assets have to be shed. Capital levels have to be increased in order to meet the various demands of the Basel and UK regulators – with the latter’s precise thresholds still unclear. The government has to agree to lift the block on dividend payments imposed via the “dividend access share” under the terms of the 2008 bailout. Under orders from the EU, 316 branches have to be sold, probably via flotation as Williams & Glyn’s. And, now that George Osborne is insisting more loudly that RBS be a “British-based bank,” 25% of US subsidiary Citizens has to be floated off.

Those last two actions are probably not essential ahead of privatisation – Williams & Glyn’s, after all, is only 2% of group assets – but the others are.

Negotiations with the government on the access share should be straightforward since both sides clearly want to deal and it’s just a question of price (RBS would have to pay £1bn-£2bn, think analysts). Capital levels at the bank, while still too low, are clearly improving. And chief executive Stephen Hester might complete the rest of financial restructuring within 18 months – after all, on the asset-shedding front, it’s been hard to fault his speed. So, making a few heroic assumptions, the checklist might be completed in 2014.

There’s one final problem. The unveiling of a credible dividend policy – essential to attract retail investors – surely implies that RBS has reached a point where there are some profits to distribute. The earliest RBS is likely to make a clean and meaningful profit is 2014, with the full-year numbers to be announced in February 2015. That, surely, would be the natural moment to start talking seriously about privatisation.

The problem for the government is that it would love to get in ahead of the general election in May 2015. It rather looks as if Thursday’s whetting of appetites is designed to make that politically-dictated timetable seem credible. It’s a risky game to play since a 2014 ambition could be blown off course by events – fresh flames in the eurozone debt crisis, some new banking scandal, and so on.

Common sense suggests the best time to sell shares in RBS would be when the UK economy – the real driver of the value of the bank – is showing some real growth. That is when the state is likely to gain the best return (or smallest loss) on the £45bn invested in RBS.

Osborne, if he wants to hurry things along, should concentrate on addressing Britain’s growth problem. Maybe that dangerous radical, Lord Lawson of Blaby, has him rattled with talk of full nationalisation of RBS.

The European parliament thinks it has fixed the problem of excessive bank bonuses. It hasn’t. It has underestimated banks’ ingenuity and determination to pay top staff life-changing sums.

Placing a cap on bonuses at one times salary (or two times if shareholders approve) will inevitably be met by increases in fixed pay. Indeed, that process is under way already as regulators have demanded that bonuses be paid partly in shares that have to be held for specified periods. The traders wanted to be “compensated” for this change and, by and large, they got their pay rises.

There is, it is true, some pressure in the other direction. Even in banks’ boardrooms, they’ve noticed that the cost of entry to the investment banking casino has gone up. Higher capital thresholds, and lower profits, have led to smaller bonus pools. In their quiet way, shareholders have also demanded a greater share of the spoils for themselves.

But how is the European parliament’s intervention meant to aid this process? It won’t. Instead, banks will introduce higher fixed salaries and convoluted pay schemes. In terms of making banks safer, this measure is most likely to be counter-productive. It’s too blunt.

Barclays claws back £300m in staff bonuses to meet shareholder demands

Category : Business

Bank fined for Libor rate rigging aims to avoid fresh shareholder revolt as chair Sir David Walker examines top pay

Barclays has clawed back up to £300m in bonuses paid to staff, after being fined for Libor-rigging and paying out millions for the mis-selling of payment protection insurance and interest rate swaps.

The bank is expected to reveal in next week’s annual report the extent to which it has reclaimed bonuses paid to its staff in previous years to try to demonstrate to shareholders that it is heeding their calls for pay restraint.

The bank previously insisted it had cut the bonus pool (which still stands at £1.8bn) by the equivalent of the £290m fine for manipulating Libor. The Libor events forced out the chief executive, Bob Diamond, in July 2012.

Sky News calculated that on this basis the loss to staff, due to the penalty for rigging the key benchmark rate, was £450m – the total of the cut to the bonus pool over the £290m fine, plus about half of the £300m being clawed back from staff.

The remainder of the clawback is the result of provisions for PPI, which have in the past two years cost the bank £2.6bn, while the total cost of the mis-selling of interest rates swaps to small businesses has reached £850m.

Even before last year’s Libor-rigging fine, Barclays’ pay policies had infuriated shareholders, who staged a rebellion at last year’s annual meeting when nearly a third of them failed to back the remuneration report.

The bank is keen to avoid a fresh revolt at this annual meeting after its report outlining directors’ pay and the clawback provisions is published next month.

Barclays’ new chairman, Sir David Walker, who replaced Marcus Agius in the wake of the Libor scandal, has already sanctioned a move to provide a break-down of numbers of staff falling within certain pay brackets.

This is expected to show that as many as 600 staff took home more than £1m in 2012, despite the clawbacks and attempts by the bank to show that it was cutting top pay.

Other banks are also expected to be forced to follow the disclosures on pay, including Royal Bank of Scotland which on Thursday is scheduled to publish the extent of its losses for 2012 when it also received a fine, of £390m, for rigging Libor.

Bailed out with £45bn of taxpayer money, RBS has already said its bonus pot has been cut by £300m, the part of its Libor fine that is being paid to the US authorities.

About 1,500 RBS bankers are also seeing their bonuses clawed back due to the Libor fine. The total size of the bonus pot for 2012 is expected to be in the region of £250m to £300m, down on the near £800m handed out the previous year.

Stephen Hester, chief executive of RBS, is expected to insist that the bank is on track to resume dividends in 2014 – for the first time since the banking crisis – despite the torrid performance last year.

Hester is expected to unveil a partial flotation of the bank’s US arm Citizens to enable the bailed-out bank to focus more on its domestic market.

George Osborne, the chancellor, has called on RBS, a bank 82% owned by the taxpayer, to focus on UK small business, corporate and personal banking. He said on Monday that there would be “further progress this week” with regard to this UK-centric approach.