Credit Suisse defends its bankers’ mid-year bonus

The bank consulted with the Financial Services Authority (FSA) over the September bonuses, although it is not clear if the Government was warned in advance.
Credit Suisse was at pains to point out that the payments are compliant with the FSA’s latest rules and include tough conditions including deferred payment and claw-back provisions.
Even so, the extra payouts, particularly at a time of concerns over a double-dip recession, are likely to reignite the row over City pay.
Politicians and regulators, who have vowed to crack-down on lavish payments by banks in the wake of the financial crisis, will be concerned that the unusual move is a prelude to another controversial bonus season.
Banks, including Credit Suisse, have largely returned to strength on the back of higher trading volumes and an increase in deals.
Last year, 26 London-based financial institutions were forced to comply with a new pay code set out by the FSA. In addition, banks were subjected to a one-off 50pc bonus tax which was introduced by Alistair Darling, the then-Chancellor.
Credit Suisse slashed its reward pool by 5pc and cut UK managing directors’ incentive awards by a further 30pc. The bank said it contributed Sfr447m (£286m) to an overall Treasury windfall of £2bn. In 2008, it paid bonuses with shares in a toxic asset fund.
The response was one of the toughest in the City – most rival banks spread the burden of the tax across the global bonus pool whereas Credit Suisse ensured that only those employees based in London were affected. Although the bank gained plaudits from politicians, the move angered its staff.
Insiders denied that the September bonus round had been planned all along in a bid to avoid paying extra taxes. However they said that key performers have sought relocation out of London while others have demanded proof that they will not be subjected to special measures this year.
The senior management decided the risk of a mass exodus to rivals was worth incurring the anger of politicians.
In a statement the bank said: “Credit Suisse is committed to remaining competitive in the United Kingdom. We are recognising the commitment of our UK leadership team with a discretionary leadership award. The award is long term in nature, deferred over three years, tied to the performance of the Bank and is subject to clawback provisions.”
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Sky under fire over from Ofcom over movie channels

After a three-year investigation, Ofcom decided to refer the case to the Competition Commission, which could take a further two years to reach a decision.
Sky could be made to reduce its prices and allow rival operators to broadcast its Sky Movies channels. In March, Ofcom forced Rupert Murdoch-controlled broadcaster to cut the wholesale price it charges Virgin Media, BT and Top Up TV to broadcast Sky Sports 1 and 2.
Ofcom said it had “reasonable grounds” to suspect that Sky’s distribution deals with all the major Hollywood studios restricts and distorts competition. Sky Movies has the rights to the first broadcast of all movies from Hollywood’s six big studios.
“Ofcom is concerned in particular that the way in which these movies are sold and distributed creates a situation in which Sky has the incentive and ability to distort competition,” the regulator said.
“We are concerned that Sky will maintain and exploit its market power by restricting the distribution of its movies channels and exploitation of subscription video on demand.
“The end result for consumers is less choice, less innovation and higher prices.”
Sky, which has almost hit its target of signing up 10m households, said Ofcom was interfering in a sector that worked.
A Sky spokesman said: “Ofcom is yet again seeking to intervene in a sector in which consumers are being well served. There have never been so many ways to access movies with innovation stretching across a wide variety of channels and platforms, including multiple ways to access Sky Movies.
“Further prolonging this unnecessary investigation will only create uncertainty and serve to undermine incentives to invest and innovate, which is bad news for consumers.”
Sky’s rivals welcomed the decision.
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Morgan Stanley is in better shape than its rivals

By
Daily Mail Reporter
Last updated at 4:02 PM on 22nd July 2010

Morgan Stanley showed
Wall Street rivals a clean
pair of heels after
navigating through the
recent market upheavals
with minimal damage. Underlying profits
dropped by 22pc to
$1.437bn (£950m) between
April and June, compared
with the previous quarter. The figures topped
forecasts and were
significantly stronger than
its peers.

Ahead: Morgan Stanley weathers the recent market upheavals better than rivals

Goldman Sachs
stunned Wall Street this
week with an 82pc profits
plunge after getting
wrong-footed by the
turmoil triggered by the
eurozone debt crisis.
Bank of America, Citigroup
and JP Morgan all recently
reported profit falls of
between 44pc and 71pc at
their investment banking
and markets business over
the second quarter.

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Alistair Darling sure failed to change bankers - just look at the bonus tax

The bonus tax was a messy political solution to the then looming problem of
bonus payouts at state-owned Royal Bank of Scotland (as I have argued
before).

Unable to simply bar RBS from paying bonuses – which would have put the bank
at a huge disadvantage to rivals – the Government embarked on a rather
cack-handed attempt to level the playing field. The New Labour logic was
simple: a 50pc bonus tax would ensure that no one would pay a bonus.

But the banks, including RBS, pushed ahead, swallowed the tax bill and paid
their star bankers the usual multi-million pound bonuses.

Read more

‘How I saved £1,700 in two years shopping online’

My top tip to anyone looking to save money is to sign up to a cashback
website. These sites pay you a percentage of their commission for referring
you to online shops – so it really is like free money. Good sites to join
are Quidco (www.quidco.com)
and topcashback (www.topcashback.com)

Quidco will take the first £5 you earn every year, but this is usually
cancelled out by the fact that its deals are better than many of its rivals.
And if you don’t make any money you won’t be charged, so you won’t lose out.

Furnish your house for free

Read more

Falkland Oil & Gas tumbles as well comes in dry

The warning from Falkland Oil & Gas came as the latest Aim-listed vehicle
looking to exploit the Falkland oil rush announced plans to float. Argos
Resources is understood to be looking to raise £70m. A spokesman for the
company refused to answer questions.

Unlike rivals – including Rockhopper Exploration and Desire Petroleum –
Falkland Oil & Gas was drilling to the south of the Falkland Islands.

Falkland Oil and Gas, the biggest shareholder in the unsuccessful Toroa well
with a 49pc stake, attempted to put a positive gloss on the well results.

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European MPs vote for tough restrictions on bankers’ bonuses

The rules do not limit the size of bonuses, just how much must be in cash and
shares, and when.

Starting next January, senior bankers will have to defer at least half their
bonus for a minimum of three years, while the cash element will be limited
to 30pc of the total and 20pc for “particularly large” bonuses.

Individual governments will be able to determine what “particularly large”
means.

The reforms pull into line all banks in the 27 countries that make up the
European Union. It puts lenders in the UK, Germany and France on a level
playing field with rivals outside the G20.

Read more

Questor share-tip: BT is a buy

After a three-year investigation Ofcom, the regulator, finally ruled that
BSkyB must wholesale its flagship Sky Sports 1 and 2 to rivals, including BT
and Virgin Media.

While Virgin, which recently agreed a more extensive deal with BSkyB, has not
changed its prices, BT has sent all its strikers forward to tackle Sky’s
defences.

BT will charge its BT Vision customers just £16.99 a month for access to Sky
Sports 1 and 2, compared to BSkyB’s minimum, and difficult to obtain, £26 a
month offer.

Read more

US debt sale underlies dilemma facing Lloyds as funding costs grow

“We estimate that Lloyds has the highest level of term debt requiring
refinancing of any quoted bank in Europe [about €80bn] and its funding costs
are definitely at the higher end of the spectrum,” said Simon Samuels,
a banks analyst at Barclays Capital.

“The debt market is differentiating between bank issuers in a way it
never did before the crisis. Banks like HSBC are now funding well inside of
Lloyds,” he added.

A spokesman for Lloyds said comparing the two bond issues was unfair and that
their different structures meant no comparison could be drawn.

Read more

Sky Sports broadcast costs rise

BT customers can sign up in time for the start of the Premier League season

Sky is putting up the price of its Sky Sports channels, raising the cost to BT and Virgin of broadcasting live events such as Premier League football.
BT announced on Thursday it will charge customers £16.99 a month for both Sky Sports 1 and Sky Sports 2, or £11.99 for just one of the channels.
But the wholesale cost of the channels to BT will rise to £19.07 in September.
This is because the wholesale cost is directly linked to the price that Sky charges its customers.
Higher costs Sky is increasing the retail price of its sports channels from £35 to £38 in September. For customers who want just Sky Sports 1 or Sky Sports 2, the cost will rise from £26 to £29.
Sky told the BBC that it tended to review its prices in September each year, and would introduce the £3 increase to cover the costs of a new three-year deal to broadcast live Premier League football.

Continue reading the main story
It’s surprising that Sky are raising prices for their customers just when we’re about to enter the market
BT

Read more

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