Royal Mail Staff Reject Pay And Bonus Offer

An offer by Royal Mail of a three-year pay deal to around 125,000 employees has been rejected, amid warnings of industrial conflict.

The company said the proposed deal would increase base rates by 8.6%, with a lump sum of £300 in December 2013 and new incentive arrangements including a minimum £100 bonus in future years.

The Royal Mail said it also wanted a "new model" for the company to work together with the Communication Workers Union (CWU).

A statement said terms and conditions in the proposed agreement would not be affected by any change in ownership of the company as the Government presses ahead with controversial plans to privatise the Royal Mail.

But the union rejected the proposal, branding it "misleading and unacceptable", saying workers had recently voted by 99% for a pay rise without any strings attached, which the company had "ignored."

Deputy general secretary Dave Ward said: "Postal workers want more security; what's on offer is less. With privatisation looming, the protections Royal Mail have put on offer are not worth the paper they're written on.

"Our members clearly voted - by a huge 99% - for a pay rise without strings attached, yet the company ignores them."

Mr Ward said the Government and Royal Mail chief executive Moya Greene had promised a year ago that postal workers' pensions were safe, adding: "Now they have reneged on their promise and postal workers' pensions are again under attack.

"For the company to present this as some kind of benefit linked to a pay offer is scandalous.

"This is daylight robbery of a further £2bn of pension scheme assets being used to subsidise privatisation.

"CWU is seeking a parliamentary inquiry and a review of the European state aid settlement.

"The pay rise is only there as a sweetener to swallow some very bitter pills on damaging changes to pensions, and a raft of workplace uncertainty.

"The deal that they've spun in their press release is not the real deal. Postal workers will know that."

"If we can't get the assurance we want over our members' future, then industrial conflict is inevitable."

Ms Greene said: "Co-operation is central to the future success of the company. This offer represents Royal Mail's commitment to a long-term engagement strategy with the CWU and with our people.

"We have already built a stronger Royal Mail together through closer co-operation and trust in recent years. We are now offering a new long-term agreement with the CWU and our employees.

"This is a good deal - good for Royal Mail and good for our people. We are asking the CWU and our people to accept this new agreement. There will be further discussions this week with the CWU about the proposed agreement."

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China's ICBC Bank Now Bigger Than US Giants

A Chinese bank has been ranked as the world's largest, overtaking two American finance giants.

Industrial and Commercial Bank of China (ICBC) leapfrogged the US banks to top the global ranking of banks with the most capital.

The shock ranking has highlighted the growing size and importance of Chinese lenders.

ICBC topped The Banker magazine's annual list of the top 1,000 banks for the first time.

The magazine relegated the Bank of America to third from first, while JPMorgan Chase remained in second slot.

China's ICBC was ranked third last year by the magazine, which is owned by the Financial Times.

The rankings are based on Tier 1 capital as a measure of a bank's ability to lend on a large scale and endure shocks.

ICBC has for some time ranked as the top bank by market value.

Britain's HSBC, which gains much of its earnings from Asia, was fourth in The Banker's list, with China Construction Bank (CCB) ranked fifth.

China had four banks in the top 10 and 96 in the Top 1,000.

Its top four lenders - ICBC, CCB, Bank of China and Agricultural Bank of China - filled the top positions for profit in 2012.

ICBC's $49bn (£32bn) profit put it top of the profit table for a third successive year.

Total profit for the biggest 1,000 banks is now back close to levels achieved before the 2007/09 financial crisis, but the regional share has shifted significantly,

The Banker said that in 2006 European banks accounted for 46% of global profits and 58% of assets, but last year that had dropped to less than 2% of profits and 43% of assets.

Asia's banks have lifted their share of profits to 56% from 19% in the same time and increased their share of assets to 35% from 22%.

Spain's Bankia posted the biggest loss last year at £21bn , with six of the 10 biggest losses coming from Spain, the magazine estimated.

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Vatican Bank Director Resigns Amid Scandal

The director of the Vatican bank and his deputy have resigned over a financial scandal that has already seen one monsignor jailed.

In a statement, the Vatican said Paolo Cipriani and his deputy Massimo Tulli stepped down "in the best interest of the institute and the Holy See".

Mr Cipriani, along with the bank's then-president, was placed under investigation by Rome prosecutors in 2010 for alleged violations of Italy's anti-money laundering rules after financial police seized €23m (£19.7m) from a Vatican account at a Rome bank.

Neither has been charged and the money was eventually ordered to be released.

Ernst von Freyberg will serve as interim director of the IOR

But the bank, known as the Institute for Religious Works (IOR), has remained under the spotlight amid concerns it has been used as an offshore tax haven.

Last week, a Vatican accountant was arrested as part of the broadening investigation into IOR.

Monsignor Nunzio Scarano is accused of corruption and slander in connection with a plot to smuggle €20m (£17.1m) into Italy from Switzerland without reporting it to customs officials.

Scarano, dubbed "Don 500" by the Italian media because of his alleged favourite euro banknote, admitted under questioning on Monday that his behaviour was wrong, but insisted that he was only trying to help out friends.

According to wiretapped phone conversations, Scarano was in regular contact with both Mr Cipriani and Mr Tulli to get the required bank approval to move large amounts of cash into and out of his IOR accounts.

Current IOR president, Ernst von Freyberg, will serve as interim director, a Vatican statement said.

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RBS Plots £500m Debt Collector Float

By Mark Kleinman, City Editor

One of Britain's biggest debt collectors is targeting a £500m stock market flotation that would loosen its ownership by the state-backed Royal Bank of Scotland (RBS).

Sky News has learnt that Arrow Global, which is based in Manchester and has nearly four million customer accounts, is being groomed for a public listing that could take place as early as this year.

Arrow Group chairman Sir George Mathewson

Investment banks including Goldman Sachs, Canaccord Genuity and Lazard are understood to have been lined up to work on a flotation, although people close to RBS's Special Opportunities Fund, which is the owner of Arrow Global, said no final decision had been taken about the move.

Last year, RBS held detailed talks about a merger of Arrow Global with Lowell, another debt collection agency, but the discussions faltered over the owners' valuations of the two companies.

The RBS Special Opportunities Fund is a private equity vehicle managed by the bank but in which it has only a minority stake. People close to RBS have suggested that a sale of Arrow Global would be "reputationally helpful" given the controversy that stalks debt collection businesses.

News of RBS's plans to float the company emerged on the same day that another contentious segment of the financial services sector, the payday lending industry, came under fire at a Government-organised summit.

Arrow Group, which negotiated a new £110m debt facility last year, claims to be "committed to facilitating positive outcomes, and strongly believes that what is good for the customer is also good for business".

The company is run by Tom Drury, former chief executive of Shanks, the waste management group.

Its chairman is Sir George Mathewson, the former chief executive and chairman of RBS, who has been a prominent figure in the debate about the reshaping of Britain's banks.

Arrow Global's asset portfolio consists of consumer and commercial credit including credit card, personal loan, retail, motor, mortgage, telecommunication and utility receivables. More than 80 per cent of Arrow Global's assets are in the UK with the remainder in continental Europe.

The business buys outstanding consumer debt at a discount from lenders who have written it off, then collects it. The average individual debt under its management is £3,000.

Arrow Global made £19m in profit in the first quarter of the year and now has more than £8.5bn under management.

RBS declined to comment on its plans.

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Winklevoss Twins Launch Bitcoin-Tracking Stock

The Winklevoss twins, who famously alleged that Facebook founder Mark Zuckerberg stole their website idea, have revealed plans for a share offering to give investors exposure to the value of Bitcoins.

Winklevoss Bitcoin Trust, which is designed to operate like an exchange-traded fund, will initially sell $20m (£13m) worth of shares in the Initial Public Offering (IPO), with each share worth a fraction of the virtual currency.

The filing, with the US Securities and Exchange Commission, said the shares were aimed at investors "seeking a cost-effective and convenient means to gain exposure to Bitcoins with minimal credit risk".

But the prospectus also warned that: "As the sponsor and its management have no history of operating an investment vehicle like the Trust, their experience may be inadequate or unsuitable to manage the Trust."

Bitcoins - a form of electronic money that is not managed by a single company or government - are "mined" by software running a set of algorithms and their release is tightly controlled, mimicking a central banking system's control over the minting of money.

They are seen by some as the future of money but critics point to extreme volatility in value - rising from $13 in January to a peak of $266 in April and back down to around $100 last week.

The US is studying the potential risk from online payment mechanisms, like Bitcoin and others, fearing virtual currency could be used by criminals or terrorists - possibly even vulnerable to hackers.

Regulators launched a money laundering probe last month against digital currency operator Liberty Reserve - based in Costa Rica.

But officials in the US have been at pains to point out that far from being unregulated, virtual currencies are under the close eye of financial watchdogs.

Cameron and Tyler Winklevoss reportedly hold approximately $11m (£7.2m) of Bitcoins.

It was their feud with Zuckerberg, portrayed in the fictional 2010 film The Social Network, which shot them to international prominence.

The identical twins settled their lawsuit with Facebook in 2008 for cash and stock, then valued at $65m.

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Business Confidence 'Back At 2007 Level'

British business confidence has hit its highest level since 2007, in fresh evidence that the economy is recovering from the financial crisis.

The finding, in the British Chambers of Commerce's quarterly economic survey, was backed by a pick-up in exports and a strong rise in firms' domestic and overseas sales over the past three months, boding well for official data due later this month.

Other surveys have shown a similar pattern.

Markit's June manufacturing Purchasing Managers' Index (PMI) was the highest in more than two years, as was last week's GfK consumer confidence barometer.

"The UK economy is slowly strengthening," said David Kern, the BCC's chief economist.

"If recent progress can be sustained, there are realistic hopes that growth forecasts will be revised up further," he added.

Britain's recovery since the 2007-08 financial crisis has been the slowest since modern records began, and weaker than in any Group of Seven economy apart from Italy.

At the end of May the BCC forecast that the economy would grow 0.9% this year, but based in part on Tuesday's data, it now expects growth of 0.6% in the second quarter alone.

This compares to 0.3% growth in the first three months of the year.

The BCC survey showed that in the service sector, domestic sales and orders were growing at the fastest pace since the fourth quarter of 2007, while export sales had grown at the fastest rate since the survey began in 1989.

For manufacturers, domestic sales growth was the strongest in two years and export order growth the best in a year.

The data is seen as easing immediate pressure on new Bank of England governor Mark Carney to restart asset purchases through the bank's quantitative easing programme.

Separate data released on Tuesday backed that assessment as activity in the construction sector was found to have grown for the second month in a row.

The PMI for June was at its highest level since May 2012.

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App-Controlled Budget Hotel Concept To Launch

The owner of the Premier Inn chain is to launch a compact city version of its hotels, with rooms less than the area of three table tennis tables and controlled by an online app.

Whitbread says they will be known as "hubs" and initially be in London from summer 2014 and then Edinburgh.

The company said the new rooms - just 11 square metres in size - offered "good value for money and appeal to customers who value price, location and design over space".

Whitbread says most 'hub' rooms will have windows

Prices were expected to be up to 30% cheaper than the current cost of a Premier Inn room in central London.

Features of the new concept room included a desk that folds into a pocket-sprung bed, an en suite bathroom with power shower, free wifi and a 40-inch smart screen TV.

An app can control meal orders and even the temperature of your room

Whitbread said the "hub" would be the UK's first hotel with its own app, letting customers control their hotel experience.

It means guests can book and check in online, as well as pre-select room temperature and light settings.

They can also choose which TV or radio channel they want playing in their room when they arrive and stream content from their phone or tablet direct to their TV, the company said.

Meals or drinks can also be ordered via the app.

Patrick Dempsey, the managing director of Whitbread Hotels and Restaurants, said: "Hub will work in tandem with Premier Inn, appealing to more price-sensitive customers seeking quality accommodation in the heart of a city."

Whitbread has secured five sites - representing around 1,000 rooms - to open in the next three years.

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Top City Rainmaker 'Forfeited £30m Bonuses'

By Mark Kleinman, City Editor

A top investment banker was forced to relinquish up to £30m in bonuses from the Wall Street firm JP Morgan after being accused by City watchdogs of improperly supplying inside information about a major oil deal.

Sky News has learnt that Ian Hannam, who was given the soubriquet "the king of mining mergers and acquisitions" because of his track record putting together multibillion pound takeovers, gave up the previously undisclosed sum when he left JP Morgan last year.

His departure followed a £450,000 fine and censure imposed by the Financial Services Authority (since renamed the Financial Conduct Authority) for market abuse, allegations that Mr Hannam is disputing at a tribunal which got underway on Tuesday morning.

The £30m figure is not expected to be made public at Mr Hannam's tribunal, although a statement released by him on Tuesday referred to him foregoing "substantial sums in the form of bonuses for 2008/9 as part of the arrangements for terminating his employment with JP Morgan".

Senior sources at JP Morgan said the £30m number was "at the top of a range" of potential payouts to Mr Hannam based on subsequent calculations of his and JP Morgan Cazenove's performance.

It comprised approximately half of his deferred bonuses accrued over a three-year period, part of his bonus for 2009, when the regulator's investigation into him got underway, and a multimillion pound payment relating to the full takeover of JP Morgan Cazenove, the investment banking joint venture that Mr Hannam helped to establish, by the Wall Street giant.

Mr Hannam is disputing the FCA's case on the grounds that the information he disclosed to Kurdistan's oil minister about his client, Heritage Oil, did not constitute market abuse both because it was not "inside information" under the legal definition of the phrase and because there was no evidence of any trading based on its disclosure.

His legal team is also arguing that Mr Hannam's subsequent move to act as a whistleblower when he became aware of potentially improper trading in Heritage Oil shares demonstrated his properiety.

The FCA has not alleged that Mr Hannam, who floated a string of FTSE-100 companies on the London Stock Exchange, acted without integrity and has accepted that he did so with honesty.

In his statement, Mr Hannam, who has become involved in a string of business ventures since leaving JP Morgan - with the blessing of the City regulator - said: "I do not believe that I broke the rules on inside information. On the contrary, I was acting in the proper course of my employment as a corporate financier, pursuing a transaction on behalf of my client, Heritage Oil & Gas.  But that is ultimately for the Tribunal to decide.

"The case raises questions about the definition, and treatment of, inside information on the corporate finance side of the 'Chinese Wall' and clarification by the Upper Tribunal is important for London as a global financial centre."

Since his fine was announced last year, many City lawyers and analysts have expressed bewilderment about the regulator's stance and argued that its decision to pursue Mr Hannam while accepting that he acted honestly has triggered uncertainty about the disclosure of privileged information.

Mr Hannam will pay his own legal fees - expected to run to roughly £1m - regardless of the outcome of the tribunal, insiders said.

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Bebo Founders Plot Relaunch After $1m Buyback

The people who sold the social networking site Bebo for $850m (£570m) have now bought it back for $1m (£660,000) and are planning a relaunch.

Founders Michael and Xochi Birch had racked up 40 million users when they sold Bebo to AOL in 2008 but it failed to innovate amid fierce competition from the likes of Facebook and Twitter.

AOL revealed in April 2010 it planned to either sell or close down the business, saying then: "Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space."

The site - once the most-visited social network in the UK - fell behind after Facebook opened up its services to users beyond college networks.

When AOL sold Bebo on to Criterion Capital Partners for $10m, disagreements on a revamp combined with the falling membership and it was put up for auction following a chapter 11 bankruptcy filing.

While no details have been released about the pending relaunch, the Birches have confirmed it will be led by their so-called ideas lab, Monkey Inferno.

The team of 21 people, including engineers and designers, have been tasked with breathing new life into the site.

In a statement, Monkey Inferno CEO Shaan Puri said while they aren't announcing their plans for Bebo just yet, they do have a message for its users: "We're excited about the ambitious challenge of bringing Bebo back, and couldn't be happier to announce that the product will be back in the hands of the founders.

"We know the odds are stacked against us, but we love challenges and the Bebo users deserve better than what they have received the past few years."

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Lebedev Found Guilty Over TV Chat Show Brawl

Media magnate Alexander Lebedev has been found guilty of battery over a brawl on a TV chat show in his native Russia.

The financial backer of Britain's Independent and Evening Standard newspapers was sentenced by a court in Moscow to 150 hours of community service, avoiding a prison term.

He had claimed the case against him was politically motivated, depicting the trial as President Vladimir Putin's revenge on him for criticising the government.

Last week, the opposition surprisingly dropped the main charge against Lebedev, of "hooliganism motivated by political hatred", which carried the threat of several years in prison.

Instead, they asked for his movements to be restricted for 21 months and for him to be banned from large public gatherings.

Alexander Lebedev has been convicted of assault over the TV punch up

Speaking after sentencing, Lebedev's lawyer, Genry Reznik, said his client was "ashamed" of the verdict, which his team would appeal.

Lebedev, a former London-based KGB agent, punched property tycoon Sergei Polonsky on a Russian political chat show in September 2011, knocking him to the floor.

He claimed he was protecting himself and that the subsequent charge of hooliganism was disproportionate. 

Last week, Mr Polonsky called for Lebedev - who is estimated to be worth more than £700m - to be forgiven.

Lebedev is rare among oligarchs in speaking out against the Kremlin since the imprisonment of oil tycoon Mikhail Khodorkovsky, who was arrested in 2003 after falling out with Mr Putin. Khodorkovsky's Yukos oil company was broken up and sold off, mainly into state hands.

Lebedev, who co-owns a campaigning Russian newspaper critical of Putin, also portrayed the case as part of a broader crackdown on the opposition since the former KGB spy returned to the presidency in May 2011 following protests.

Mr Polonsky spent three months in jail in Cambodia this year for allegedly attacking the crew of a boat after a dispute erupted during a New Year's Eve outing.

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