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City Bonuses 'To Rise 21%' Despite Cap Rules

Written By Unknown on Senin, 22 Desember 2014 | 23.34

Bonuses for senior City workers are tipped to rise by 21% in 2015, despite the latest regulatory crackdown in the wake of the financial crisis.

The report by recruitment firm Astbury Marsden found that top staff could expect average awards of £124,000 - up from £102,000 - with a pick-up in activity and profitability raising pressure on employers.

Adam Jackson, director at Astbury Marsden, said: "Business conditions in the City have improved significantly over the last year, which is now translating to rising bonus expectations.

"Despite shareholder and public pressure to limit bonuses - and with the EU bonus cap now set to be introduced at the start of 2015 - City staff clearly feel that their employers are in the position to reward them well."

The cap, which became law in January 2014 to take account of bonuses to be paid in 2015, is aimed at 'risk-takers' - particularly in the banking sector.

The law limits a worker's extra pay to 200% of salary - if shareholders agree.

Banks have moved to sidestep the rules by hiking salaries in some cases, arguing that a failure to reward key personnel in London would drive them away to Asia or the United States.


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Rouble Crisis Sparks Russia Bank Bailout

Russia's central bank has announced a bailout of the troubled Trust Bank - the first such rescue in the country's currency crisis.

The Bank of Russia said it had placed Trust under its supervision and would hand it 30bn roubles (£341m) to avoid bankruptcy.

It did not officially confirm that the problems at the lender, whose products are advertised by Hollywood actor Bruce Willis, were linked to the currency's plunging value.

Trust - a mid-sized lender - had already been under pressure to boost its capital buffer before the currency came under intense pressure this month amid plunging oil prices exacerbated by Western sanctions.

The central bank's Deposit Insurance Agency was to supervise Trust's operations with immediate effect and a major bank was being found to provide additional investment, a statement said.

The decisions were taken at an emergency meeting and were designed to provide Trust with sufficient liquidity to continue operations without any repercussions for clients.

Unable to borrow on Western markets due to US and EU sanctions over Moscow's role in the Ukraine crisis, Russian banks have found themselves pressed by the plunge of the rouble, that has lost nearly half its value in the past year.

Rates on the interbank lending market, a barometer of confidence banks have in one another, have shot up in recent days, reflecting wariness and liquidity problems.

Last week, the central bank announced a number of technical measures to improve access to funds and parliament approved a recapitalisation plan.

The rouble's collapse, which extended to almost 80 roubles to the dollar at one point last week, sparked a boom in the purchase of 'big ticket' items in Russia such as TVs as people rushed to avoid inevitable price rises.

Companies including Audi, Jaguar Land Rover and Apple introduced suspensions on the sale of products over fears they were priced too cheaply.

Moscow confirmed on Monday it was looking to support Russian airlines - also badly hit by the rouble's collapse.

Deputy Prime Minister Arkadi Dvorkovitch said he was considering credit guarantees and subsidies to support their operations.


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UK Election Delays Top Energy Appointment

By Mark Kleinman, City Editor

The energy industry's leading trade association is to wait until after the General Election before appointing a new chief executive amid intense political scrutiny of the sector.

Sky News understands that Energy UK, whose members include each of the 'big six' residential gas and electricity suppliers, has decided to wait until the middle of 2015 before recruiting a permanent successor to Angela Knight, who will step down at the end of the month.

The decision by Energy UK underlines the scale of concern within the industry about the political climate at a time when tens of billions of infrastructure spending is required for modernisation programmes.

Some board members are understood to have pushed for the delay to enable the appointment of a new boss with strong connections to the party that leads the next administration.

"The timing of the election makes it impossible to pick a chief executive and be sure that they are the right person to lead the organisation," said an executive at one of the big utilities.

National Grid recently warned that the UK was at its highest risk of winter blackouts for seven years, while the major energy retailers - British Gas, EDF, EON, Npower, Scottish Power and SSE - have been at the centre of a string of mis-selling scandals and pricing rows.

Ed Miliband, the Labour leader, has pledged to freeze retail prices for 20 months if he becomes Prime Minister, while Ofgem, the industry regulator, has referred the energy suppliers to the Competition and Markets Authority (CMA) for a full investigation.

The CMA intends to publish its provisional findings and possible remedies in May or June next year, and could recommend far-reaching measures including the enforced separation of companies' power generation and supply activities.

Last month, Energy UK confirmed the appointment of Sir David Arculus, a City grandee who previously chaired Severn Trent, as its new chairman.

The trade body also said that Lawrence Slade, its chief operating officer, would become interim chief executive from January 1, although it did not say how long the role would be filled on a temporary basis.

Mr Slade is likely to be a leading candidate for the job, which is an increasingly public-facing post as energy companies acknowledge the need to explain commercial decisions to their customers.

Sir David will take over from Lord Spicer, a former Parliamentary Under-Secretary at the Department of Energy during the premiership of Margaret Thatcher.

Lord Spicer was on the board of the Association of Electricity Producers before it was absorbed into Energy UK as part of efforts by the industry to promote a more co-ordinated approach to key issues.

The new chairman said on his appointment: "This is a time of major change for the industry and for the country as old power stations are closed and cleaner greener electricity generators are built. This vital industry deserves a clear, strong voice.

"I look forward to getting to grips with the key three-fold challenge of balancing energy security with the low carbon agenda and with bills which people and industry can afford."


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Push To Get More Women Into The Cockpit

By Charlotte Lomas, Sky News Reporter

More than four decades after the first British female pilot took to the skies in a commercial airliner, there are still few women choosing flying as a career. But why are there so few female pilots?

Of the 3,500 pilots employed by British Airways, just 200 are women and this is more than any other UK airline.

Globally, 4,000 of the 130,000 airline pilots are female and fewer still are captains - worldwide there are around 450.

Helen Macnamara has been a British Airways pilot for 14 years after enrolling on a sponsorship scheme once she left university.

"I like to see the world and different places and I enjoy the magic of flying itself," she said.

"Once you have the passion for it, then that's it really".

Helen, 38, believes the reason so few women go into flying may stem from a lack of opportunities in the past.

She said: "I think historically there were less women involved in aviation and that has been changing throughout my career.

"I think it's important females see this as an option and that there are role models in our industry."

One such role model is TV presenter and now fully trained pilot, Carol Vorderman.

She is planning to embark on a solo round-the-world flying trip and is supporting a recruitment drive by British Airways to get more women in the cockpit.

Carol said: "I always wanted to be a pilot since I was very young.

"It was the reason I read Engineering at Cambridge, and ideally would have joined the RAF or a commercial airline after graduating, but sadly this was not an option then.

"I think the reason so few women enter the profession can be traced back to schools, home and the media. Girls need to be encouraged more to pursue sciences, maths and technology at school and realise different paths are open to them."

Although many women work in the aviation industry as a whole - piloting is still very much a male-dominated profession.

Jim McAuslan, the general secretary of BALPA, the British Airline Pilots Association, is hoping this will change.

He said: "Women make great pilots, unfortunately only five percent of our members and British pilots are women, and that's disappointing.

"So we're reaching out to women to find why they're not coming forward. Perhaps it's because of their choice of careers at an earlier age. Engineering is a great way to get into flying, so perhaps people should look at their careers early on.

"But our big message would be: have the dream."

Some critics argue that women face prejudice when considering a career in flying.

In 2009 a Virgin Airlines advert featuring glamorous female flight attendants flanking a male pilot received complaints it was sexist.

So too did an Air New Zealand in-flight safety video where women were dressed bikinis.

But Helen says that she has never experienced any negativity. Most passengers are simply surprised to have a female pilot, she said.

"Actually when members of the public come to our flight simulator where we train, it is usually the women who fare better than the men.

"They are softer with the manoeuvres and males can be more heavy handed."

In an industry where fewer than 5% of pilots are women it's hoped more will be landing safely on the tarmac in future.


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North Korea: We Can Prove Hacking Wasn't Us

North Korea: We Can Prove Hacking Wasn't Us

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North Korea says it can prove it had nothing to do with the cyber-attack on Sony and proposes a joint investigation with the US.

The North Korean news agency KCNA warned there would be "grave consequences" if the White House declined the offer.

State media called the FBI's claim that North Korea was behind the attack on the entertainment giant a "slander".

The North's foreign ministry, quoted by KCNA, said: "As the United States is spreading groundless allegations and slandering us, we propose a joint investigation with it into this incident.

"Without resorting to such tortures as were used by the US CIA, we have means to prove that this incident has nothing to do with us."

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  1. Gallery: Kim Jong-Un Seen Amid US Tensions

    North Korean leader Kim Jong-Un smiles as a huge crowd surrounds him while he gives field guidance at the Kim Jong Suk Pyongyang Textile Mill

North Korea stated it can prove it had nothing to do with the recent cyber-attack on Sony and proposed a joint investigation with the US

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The North Korean news agency KCNA warned there would be "grave consequences" if the White House declined the offer. Continue through for more images

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North Korea: We Can Prove Hacking Wasn't Us

We use cookies to give you the best experience. If you do nothing we'll assume that it's ok.

North Korea says it can prove it had nothing to do with the cyber-attack on Sony and proposes a joint investigation with the US.

The North Korean news agency KCNA warned there would be "grave consequences" if the White House declined the offer.

State media called the FBI's claim that North Korea was behind the attack on the entertainment giant a "slander".

The North's foreign ministry, quoted by KCNA, said: "As the United States is spreading groundless allegations and slandering us, we propose a joint investigation with it into this incident.

"Without resorting to such tortures as were used by the US CIA, we have means to prove that this incident has nothing to do with us."

1/8

  1. Gallery: Kim Jong-Un Seen Amid US Tensions

    North Korean leader Kim Jong-Un smiles as a huge crowd surrounds him while he gives field guidance at the Kim Jong Suk Pyongyang Textile Mill

North Korea stated it can prove it had nothing to do with the recent cyber-attack on Sony and proposed a joint investigation with the US

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The North Korean news agency KCNA warned there would be "grave consequences" if the White House declined the offer. Continue through for more images

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ITE Exhibits Move From Sanctions-Hit Russia

By Mark Kleinman, City Editor

A London-listed exhibitions firm will this week announce a £20m takeover that will reduce its reliance on Russia amid the country's currency crisis and the ongoing impact of international sanctions.

Sky News has learnt that ITE Group, which has a market value of more than £350m, is to acquire Breakbulk, a leading provider of shipping and logistics intelligence.

The deal, which is understood to include an additional performance-related payment based on future revenues, is expected to be announced on Monday.

Investors in ITE are expected to view the takeover as a welcome diversification from the company's dependence upon Russia and emerging markets for the majority of its revenues.

Roughly 60% of ITE's sales are generated in Russia, which has seen a plunge in the value of the rouble in recent weeks as evidence of the weakness of the country's economy has mounted.

ITE's chief executive recently acknowledged "currency headwinds and difficult trading conditions in Russia and Ukraine", but managed to beat analysts' profit forecasts despite a decline in sales.

The Russian economy's travails are the main factor behind a near-52% fall in ITE's share price during the last 12 months, prior to which it was in the FTSE-250 index.

Breakbulk runs annual exhibitions - held in Shanghai, the Belgian port of Antwerp and, in alternating years, New Orleans and Houston - for senior executives in logistics roles in sectors such as energy and infrastructure.

Reflecting rapid growth in demand, Breakbulk has also added exhibitions in Brazil, South Africa and Turkey.

The business is part of Axio-Data, which has been owned by Electra Partners, a private equity firm, since last year.

It had previously been under the umbrella of UBM, the much larger media and events group listed on the London Stock Exchange.

Announcing annual results earlier this month, Russell Taylor, ITE chief executive, said it remained "sensitive to the economic climate in Russia but has increasingly good growth prospects in its other markets".

An ITE spokesman declined to comment.


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B&Q China Stake Sale Nets Owner £140m

The owner of B&Q has sold a controlling stake in its loss-making China operation for £140m.

Kingfisher, which owns the DIY chain, said it planned to use the cash to invest in its core European market which includes the B&Q and Screwfix brands in the UK.

The firm said it had reached a binding agreement with fellow retailer Wumei Holdings to hand over a 70% stake in B&Q China, which began operations in 1999 and has since grown to 39 stores employing more than 3,000 staff.

Kingfisher had previously said it was looking for a strategic partner to help develop its Chinese business.

The deal is conditional on Chinese Ministry of Commerce approval and, if approved, is expected to close during the first half of next year.

Veronique Laury, Kingfisher chief executive, said: "I am delighted to have found a strong retail partner who will help us to release the financial value of our business in China.

"This will enable us to focus our financial resources and management talent on the large and attractive European home improvement market."

Wumei's interests include 650 supermarkets and 10 department stores which operate in northern, eastern and western China.

Its experience in the Chinese market is a critical factor behind the deal.

Kingfisher had looked to cash in on the economic boom in the country but, like firms including Tesco, it has found Asia a tough nut to crack with problems including high costs and tough local competition.

The recent slowdown in the Chinese housing market had proved to be a new headwind though annual losses had been stemmed to £6m in B&Q China's last financial year.


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Tesco Crisis: Accounting Probe Launched

By Mark Kleinman, City Editor

The accounting watchdog is to scrutinise the former finance director of Tesco during a probe into the financial statements of Britain's biggest retailer.

Sky News understands that Laurie McIlwee, who left Tesco in April and had no role in the half-year results which triggered its accounting crisis in September, will face questions as part of the Financial Reporting Council's (FRC) investigation.

The FRC confirmed on Monday that it had commenced an inquiry into the "preparation, approval and audit" of Tesco's financial results following the disclosure that its profits had been overstated by £263m.

Members of Tesco's audit team at PricewaterhouseCoopers (PwC) will also be central to the FRC inquiry, which will examine statements dating back to the year ended 25 February 2012, and their impact on "the matters reported in the company's interim results for the 26 weeks ended 23 August 2014".

It is unclear whether Mark Armour, a Tesco director and member of its audit committee who also sits on the FRC board, will form part of the investigation.

The accounting body's inquiry will run alongside that of the Serious Fraud Office (SFO), which said in November that it had launched a criminal probe into the affair.

Mr McIlwee resigned in April and left Tesco's head office almost immediately after being asked not to return by the then chief executive, Philip Clarke.

Sources said that Mr McIlwee had not personally signed off Tesco's 2013-14 accounts.

Tesco's outgoing chairman, Sir Richard Broadbent, was forced to clarify remarks made in September that Mr McIlwee had not been at Tesco for "days and weeks", eventually admitting that he had not been called upon since April.

After his departure, Mr Clarke formed a separate finance committee to oversee the preparation of future financial statements.

According to insiders, members of that committee included Carl Rogberg, the former UK finance director, Mr Clarke himself, and Mike Iddon, who is now chief financial officer at New Look.

The £263m profits overstatement, announced by Mr Clarke's successor, Dave Lewis, triggered the suspension of at least eight executives, including Mr Rogberg, at least four of whom have since left the company.

One, Matt Simister, has been reinstated, while the fate of three others remains unclear.

The overstatement was a result of the way Tesco managers booked income from commercial suppliers, prompting Mr Lewis to announce an overhaul of those relationships.

The FRC has the power to impose unlimited fines and bans on individual members and member firms following formal disciplinary procedures.

Although widely expected, the formal confirmation of its investigation is a further distraction for Mr Lewis, who is attempting to improve Tesco's domestic performance in the wake of another devastating profit warning.

It issued its fourth profits warning in a year earlier this month, saying that full-year earnings would not exceed £1.4bn - well short of City forecasts of around £1.94bn.

Mr Lewis will update the City on Christmas trading and his broader plans to reinvigorate Tesco on January 8.

Tesco and the FRC declined to comment further, while Mr McIlwee could not be reached for comment.


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OPEC's Dominance Of Energy Market 'Is Over'

By Ed Conway, Economics Editor

The era of OPEC domination over the global energy market is over, the former head of the oil cartel has told Sky News.

Abdullah bin Hamad al-Attiyah, the former energy minister of Qatar, said that the group of 12 oil exporters, which dominated the production and price-setting of energy for half a century, had surrendered its power to single-handedly affect prices.

He urged the organisation to collaborate with Russia and reduce global oil production.

Asked whether the era of OPEC dominance was finished, he said: "It's over. OPEC cannot play alone. This is why when OPEC met at the last moment they cannot decide it because if they will cut there is no meaning it will be the others who will benefit and even increase their production."

His comments, in an exclusive Sky News interview, come after the oil price fell sharply, from $115 a barrel earlier this year to below $60 last week.

The collapse in prices has triggered a currency crisis in Russia and threatens to undermine prosperity in the Middle East, where stock markets have fallen sharply. Mr al-Attiyah said that his country, Qatar, was well-placed to weather the downturn, but added that others might struggle more.

He said that he suspected Russia and others were waiting for OPEC to act - but that they might be mistaken.

"We have to learn from our lessons; we have to be careful.

"Sometimes we forget the cycle and just close our eyes thinking that the oil price will never go down. But ... it happened before. And it will happen in the future."

He warned that it was conceivable that the oil price remained depressed for as long as 15 years - as it did from the oil price crash in the mid-1980s.

He said that prices needed to be lifted to $90 or $100 a barrel to keep most producers in business. He also disputed claims that OPEC had not cut its production at a recent meeting because it wanted to undermine the viability of shale oil production in the US.


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Rate-Riggers Face Seven Year Jail Terms

The Chancellor has confirmed that traders who rig foreign exchange (forex) and other key markets will face jail terms of up to seven years.

George Osborne said new rules to criminalise such activities would be in place by April under the Government's plans while the City regulator is also proposing new powers to bolster its own oversight of firms.

The measures were announced a month after world regulators including the Financial Conduct Authority (FCA) fined six banks £2.6bn over the forex rigging investigation.

Barclays was yet to settle but told Sky News last week that it expected to need more than the £500m it had already set aside to handle claims.

The rules proposed by Mr Osborne will extend legislation put in place last year to cover the manipulation of the interbank lending rate, Libor, which has also been the subject of a scandal resulting in billions being paid out in fines.

The seven additional rates to be covered by the law include the dominant global foreign exchange benchmark and key indices for gold, silver and Brent crude oil.

Mr Osborne said today: "The integrity of the City matters to the economy of Britain.

"Ensuring that the key rates that underpin financial markets here and around the world are robust, and that anyone who seeks to manipulate them is subject to the full force of the law, is an important part of our long-term economic plan.

"That's why the Government is determined to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them."

Those who administrate the benchmarks and submit figures used in their calculation will also be subject to proposed new FCA rules with firms facing financial penalties, suspensions or censure for breaking them.

FCA chief executive Martin Wheatley said: "I am determined to ensure that markets work well and preserve the UK's reputation as a centre of excellence for financial services - today's announcement is a vital step in achieving this.

"This builds on our work to strengthen Libor, and drive up standards on benchmarks across the board."


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