Lloyds Stake Sale Raises £3.2bn For Taxpayer

The initial sale of taxpayer-owned shares in Lloyds Banking Group has raised £3.21bn for the Treasury - representing a small profit.

UK Financial Investments (UKFI), the body which oversees the public's stakes in Lloyds and RBS following their bailouts, said 6% of Lloyds Banking Group was sold to institutional investors at a placing price of 75p per share.

It means the taxpayer stake in Lloyds - rescued after its disastrous acquisition of Halifax Bank of Scotland at the height of the financial crisis - has been reduced from 38.7% to 32.7%.

The sale price represents a £61m cash profit on the 73.6p average price paid by the Labour Government in 2008 but it will register as a paper profit of £586m on the Treasury's books because its stake in Lloyds is recorded in the public finances as 61p per share.

George Osborne says the money raised will help reduce national debt

The reduced cost took into account the fact that the Treasury had already received £2.5bn for insurance fees from Lloyds under the now-disbanded Asset Protection Scheme.

UKFI confirmed that no further sale of the taxpayer's remaining 32.7% stake would take place for a further 90 days.

The public is expected to be given a chance to buy Lloyds stock in future sales.

Chancellor George Osborne kicked off the initial share sale on Monday night, five years after Lloyds was left needing a £20bn bailout.

He said: "Five years ago the previous government forced British taxpayers to put a huge sum of money into bailing out the banks.

"That was a big ask of the British public. I have been determined ever since I became Chancellor to get that money back for taxpayers.

"I can confirm that we have sold 6% of Lloyds Bank at 75p a share. That is a profit for taxpayers, and rightly so. The money will be used to reduce the national debt by over half a billion pounds.

Lloyds shares are trading below pre-crash levels (price correct at 8.14am)

"This is another step in the long journey in putting right what went so badly wrong in the British economy; it's another step in repairing the banks; it's another step in getting the money back for the taxpayer; and it's another step in reducing our national debt.

"All of those things together are good news.

"If you look at what has happened over the last 12 hours with Lloyds, you have investors from around the world  investing in a British bank. That is a sign the British economy is turning a corner."

Lloyds shares were more than 3.2% down in late trading on the FTSE 100 on Tuesday - still changing hands at more than 60% below their pre-financial crisis peak.

Nevertheless, the start of the re-privatisation marks a milestone for Lloyds, which hailed its recovery earlier this summer after swinging out of the red with half-year profits of more than £2bn.

Last week the bank re-launched TSB with a spin-off of more than 600 branches, which it was obliged to dispose of under European laws on state aid. This is expected to result in a flotation next year.

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Barclays Battles Watchdog Over £50m Deal Fine

By Mark Kleinman, City Editor

Barclays has confirmed that it is facing a £50m fine from the City watchdog over the £11.8bn capital-raisings that allowed it to remain out of Government ownership five years ago.

The bank confirmed a Sky News report that it had been told by the Financial Conduct Authority (FCA) that it was seeking the penalty over the disclosures it made to the stock market in 2008.

In the prospectus accompanying its £5.8bn rights issue, which was published on Monday afternoon, Barclays said it was continuing to contest the FCA verdict, which threatens to heap fresh shame on the embattled bank.

The regulator filed warning notices against Barclays late last week in which it accused the lender of failing to disclose £322m in advisory fees payable to Qatari interests which had agreed to take a multibillion pound stake in Barclays, according to the prospectus.

"While the Warning Notices consider that Barclays and Barclays Bank believed at the time that there should be at least some unspecified and undetermined value to be derived from the agreements, they state that the primary purpose of the agreements was not to obtain advisory services but to make additional payments, which would not be disclosed, for the Qatari participation in the capital raisings," Barclays said.

"The Warning Notices conclude that Barclays and Barclays Bank were in breach of certain disclosure-related Listing Rules and Barclays was also in breach of Listing Principle 3 (the requirement to act with integrity towards holders and potential holders of the Company's shares). In this regard, the FCA considers that Barclays and Barclays Bank acted recklessly. The financial penalty in the Warning Notices against the Group is £50m. However, Barclays and Barclays Bank continue to contest the findings."

Antony Jenkins is trying to repair the bank's image

Although the alleged breaches of market rules took place well before he took over the helm of Barclays, the findings put renewed pressure on Antony Jenkins, the bank's chief executive, who has embarked on a public crusade to overhaul its culture and standards.

Assuming the discussions with the FCA do result in Barclays paying a financial penalty, it would add to the mounting cost of the bank's recent transgressions, which have included a £291m fine for its role in the manipulation of the interbank borrowing rate Libor.

The bank has also set aside billions of pounds to compensate customers who were mis-sold payment protection insurance and interest rate swaps, and been hit with a contested fine for rigging US energy markets.

Other authorities in the UK and the US are also examining the Qatari capital-raising issue, and Barclays said on Monday that their investigations continued.

"The Serious Fraud Office is investigating the same agreements. Its investigation is at an earlier stage and the Group has received and continues to respond to requests for further information," the bank said.

"The DOJ and the SEC are undertaking an investigation into whether the Group's relationships with third parties who assist Barclays to win or retain business are compliant with the United States Foreign Corrupt Practices Act. They are also investigating the agreements referred to above including the two advisory services agreements.

"The US Federal Reserve has requested to be kept informed of these matters. It is not possible to estimate the full impact on the Group if the final conclusion of these matters is adverse," the bank added, implying that it could face far heftier financial penalties than the £50m proposed by the FCA.

The rights issue documentation was published as part of Barclays' efforts to raise almost £8bn from investors through a combination of new shares and bonds, following pressure from the Bank of England's regulatory arm to strengthen its balance sheet.

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Ryanair: Stansted Deal 'To Create 7,000 Jobs'

Ryanair says a ten-year deal with the owners of Stansted Airport may result in up to 7,000 new jobs being created.

The no-frills carrier said the agreement, which will see Ryanair grow its traffic at Stansted by over 50% from 13.2 million passengers in 2012 to over 20 million each year, was in return for a package of lower costs and more efficient facilities at the Essex airport.

Ryanair's job creation figures were based, it said, on research which found that up to 1,000 "on-site" jobs are sustained at international airports for every one million passengers.

The airline announced the move seven months after Manchester Airports Group (MAG) bought Stansted from Heathrow's owner - then-known as BAA.

Ryanair's chief executive, Michael O'Leary, said the deal "proves how UK airports can flourish when released from the dead hand of the BAA monopoly and is the first dramatic initiative by MAG to reverse 7 years of decline, during which Stansted's traffic fell from 23.8 million to 17.5 million".

He added: "As Stansted's biggest airline, Ryanair looks forward to a decade of growing traffic, routes and jobs at Stansted.

"We are also pleased to release our Stansted summer 2014 schedule with 120 routes, including four new routes to Bordeaux, Dortmund, Lisbon and Rabat."

MAG's chief commercial officer Ken O'Toole added: "The new long-term agreement between Ryanair and MAG at Stansted shows that competition really does work, and it represents great news for both passengers and UK businesses.

"The deal secures a new and exciting era for both Ryanair and Stansted, and we're delighted to be supporting the airline's growth over the next ten years.

"Today's announcement, coupled with our £80m investment in the terminal, confirms that Ryanair shares our confidence, and shows how we are succeeding in transforming Stansted under new ownership.

"Stansted has a really bright future in providing international connectivity for the UK."

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Barclays To Pay Out £100m Over Loan Error

Barclays could have to pay out up to £100m to around 300,000 of its personal loan customers after making mistakes on their paperwork.

The customers could be in line for a few hundred pounds each from the issue, which dates back to October 2008.

A spokesman described the problem, which relates to arrears notices and statements, as "technical documentary errors".

It was revealed in a 185-page bank document in which Barclays stated it has "identified certain issues with the information contained in historic statements and arrears notices relating to consumer loan accounts".

The document added it was "therefore implementing a plan to return interest incorrectly charged to customers".

A Barclays spokesman said: "Barclays has proactively reviewed information it has historically sent to its customers relating to interest charges where we have found technical documentary errors.

"As a result Barclays has identified certain issues with the information contained in some statements and arrears notices relating to consumer loan accounts.

"Due to these notification errors, interest was not due on certain accounts during the period that Barclays made this mistake, and whilst no one has been mis-sold to, customers are entitled to have their interest payments returned.

"No customer will pay more than they were ever contractually expected to."

The bank added that it would contact all customers affected.

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Iran Restores Block On Facebook And Twitter

Iran has restored blocks on Facebook and Twitter after a "technical glitch" briefly removed filters from the social networks overnight.

Iranians gained direct access to the sites for the first time in four years because of a fault, an official said, denying suggestions the government had lifted a ban in place since anti-government protests in 2009, some of which were organised on social media.

Newly elected President Hassan Rouhani has pledged greater engagement with the West and a new openness in Iran.

It has been suggested the "glitch" could point to internal power struggles between groups seeking to reopen Facebook and other social networking sites and hard-liners in the establishment, who remain in control of Internet access.

But Abdolsamad Khoramabadi, secretary of a state committee tasked with monitoring and filtering sites, said problems with some Iranian Internet service providers (ISPs) had allowed the access, and the government was investigating.

"The lack of a filter on Facebook last night (Monday) was apparently due to technical problems and the technological committee is investigating this issue," Mr Khoramabadi was quoted by Mehr news agency as saying.

"We are investigating to see which of these companies has done this."

Thaw: Iran's Foreign Minister Javad Zarif has set up a Twitter profile

Since Mr Rouhani took office last month, there has been a muted thaw in the restrictions around social media.

Officials, including Foreign Minister Javad Zarif, have created Facebook and Twitter profiles, raising hopes among some Iranians that the sites would soon be unblocked for them.

Now, many use proxy servers to trick the system into believing they live elsewhere to access their social media accounts.

Arash Tajik, an IT administrator in Tehran, said he thought the blip, which meant he could access Facebook without a proxy server at his office on Monday evening but not from his home on Tuesday, might be a test.

He said: "They are testing what will happen if they remove the filter, and whether they can control the situation or not."

Mr Rouhani has pledged to relax political and social restrictions in Iran, which were ramped up after the disputed election in 2009 sparked protests that were often organised via social media.

Several dissidents and activists have been put in jail or forced to leave Iran since.

However, any move to ease control will first have to be approved by the ruling establishment of conservative clerics and security officials, including Supreme Leader Ayatollah Ali Khamenei.

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Record Property Prices Fuel Bubble Debate

An annual surge of almost 10% in London's house prices has cast more fears about a bubble and highlighted a growing divide in the UK market.

The Office for National Statistics recorded a 9.7% increase in the capital over the year to July, helping to push the value of homes across England to a new high of £255,000 on average.

Prices in London and the wider South East were both found to have raced past their 2008 peaks and stood at an average of £438,000 and £303,000 respectively.

Property prices in the East of England and the South West also edged close to their previous highs but while a 3.7% year-on-year increase was measured in England as a whole, prices dropped by 2% in Scotland and 0.7% in Wales.

Prices in Northern Ireland were up by 1.8% year-on-year.

North East and North West England both recorded falls of 1.3% and 0.7% respectively - highlighting a growing north-south divide, though the ONS said the annual pace of house price inflation picked up across the UK in July to its fastest rate recorded in 2013 so far at 3.3%, taking values to £245,000 on average.

The price rises have prompted concerns that Government initiatives to kick-start the housing market such as Funding for Lending and Help to Buy are in danger of creating a property bubble, with borrowers over-stretching themselves as access to low-deposit deals returns.

In an interview with Sky News, the Business Secretary Vince Cable said the second phase of Help To Buy might have to be reconsidered while the Royal Institution of Chartered Surveyors (RICS) suggested that a 5% cap should be placed on annual house price growth to stop any future bubble.

Matthew Pointon, property economist at consultancy Capital Economics, described London today as a "special case", with prime central London in particular seen as a safe haven for overseas buyers to place their cash.

He said some areas were seeing "bold behaviour" from buyers and predicted that in the short term, a shortage of homes on the market in London is likely to spell further price gains in the capital.

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Inflation 'Ruining Power Of Savings Accounts'

A report highlighting deteriorating consumer saving power claims £10,000 invested five years ago in the average savings account would only be worth £8,844 today.

The website moneyfacts.co.uk issued the findings - charting the effects of taxes and inflation on savers - as official figures credited slowing fuel cost rises and summer discounting of autumn clothing for easing inflation.

The Office for National Statistics said the Consumer Price Index (CPI) measure slowed from an annual rate of 2.8% in July to 2.7% in August - also spurred by a lower rise in air fares compared to the same period last year.

The fall in the CPI rate was credited to clothing and footwear inflation coming at 2% compared to 2.8% 12 months previously, at a time of year when retailers were introducing new full-price autumn ranges.

Meanwhile, petrol prices rose 2p per litre compared to a rise of 3.5p per litre in August 2012, mirroring movements in oil prices.

Air fare increases were smaller than those in August 2012

Air fares were up 9.4% compared to 10.2% a year ago, with the main downward effect coming from domestic routes.

The ONS said the most notable upward contribution to inflation came from furniture, household equipment and maintenance where prices rose for a variety of furniture items and household appliances.

After the figures were released, moneyfacts suggested only three of the 840 ISA and non-ISA accounts on the market now negated the effects of tax and inflation on savers.

It calculated that to beat inflation, a basic rate taxpayer at 20% needed to find a savings account paying 3.38% per annum, while a higher-rate taxpayer at 40% needed an account paying at least 4.5%.

Moneyfacts has questioned the concept of savings accounts

The effect of inflation on savings, it said, meant that £10,000 invested five years ago, allowing for average interest and tax at 20%, would have the spending power of just £8,844.00 today.

Moneyfacts editor Sylvia Waycot said: "Inflation may have fallen but it is still high enough to ruin the spending power of any feeble interest paid on today's savings accounts, which leaves the elderly reliant on savings income and the young saving for a house deposit high and dry.

"It is time to start calling savings accounts by a different name as 'savings' suggests growth and the reality is one of stagnation."

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London's 'Gotham City' Goes To Planners

The ever-changing skyline of London's Square Mile is set to be further transformed if plans to build a £390m collection of skyscrapers are approved.

Designs for the new 910,000sq ft development on Leadenhall Street - nicknamed 'Gotham City' - were unveiled by Henderson Global Investors, which owns the site.

At 170m (557ft) high, with office blocks between seven and 34 storeys tall, developers hope the complex will rival City skyscrapers such as the Gherkin, the Cheesegrater and Walkie Talkie in terms of height.

However, the buildings' designer, architectural firm Make, has confirmed that the protected view of St Paul's Cathedral from Fleet Street will not be obscured by the towers.

In addition to offices, the development will also feature 20,000sq ft of shops and restaurants at ground level.

Its design is said to be inspired by American 20th century architecture, such as New York's Rockefeller Centre, which influenced Tim Burton's movie depiction of Gotham City in the Batman films.

Henderson Global Investors has submitted a pre-planning application to the City of London Corporation for the new office blocks.

If the project gets past the planning process, it is estimated that nearly 400 construction jobs will be created.

Geoff Harris, director of property development at Henderson Global Investors, said: "The building is also a vote of confidence in the City of London and a major boost to investment, growth and employment in the economy."

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Grand Theft Auto V Launch: 'Sickies' Expected

Grand Theft Auto 'Cut Above Rest'

Updated: 8:42am UK, Tuesday 17 September 2013

By Niall Paterson, Media and Technology Correspondent

First things first, this is just a video game - even if it is a particularly violent one.

So set aside the inevitable hysteria that surrounds the release of any title that invites moral individuals to make immoral decisions, and what is most striking about Grand Theft Auto V is just how cinematic it feels.

From its gloriously detailed cityscapes, to the villains straight out of central casting, to the non-linear freedom to roam that this sandbox game offers, GTA V comes the closest yet to making players feel like they are in a movie.

The game's creators, Rockstar North, have done more than their homework - they have created an entirely believable world, although admittedly filled with some fairly unbelievable characters and events.

Usually when playing a game you are fully aware that what is happening is a fiction.

Yet here, the artifice is almost unnoticeable, the usual barrier between player and completely immersive experience so slight as to barely register.

Yes, you still direct your character with a handheld controller. But you feel with your head, and your heart.

Mark my words, this game will sell by the blood-filled bucketload.

Estimates vary, but 25 million copies are expected to shift in the first 12 months.

Revenues could exceed $1bn the end of the year, and come close to £1bn not long after that.

GTA V is but the latest evidence that video games pose a real challenge to cinema's cultural dominance.

Last year the video games industry was valued at a little over £42bn. By 2014 it is estimated it will be worth almost £52bn.

Pity the residents of Sunset Boulevard. Global box office takings in 2012 amounted to just £22bn.

GTA V had a budget in excess of most Hollywood blockbusters and was five years in development. It shows.

Rockstar North have aped the style and the substance of the hugely profitable gangster genre.

As the midnight queues at games retailers up and down the country have proved, the British-based company clearly has more than a few wise guys in their ranks.

This is no niche industry. Wii-loving grannies; computer-literate toddlers; nostalgic '80s gamers returning to their youthful pursuits; and those who have never put down the joystick - never before have so many enjoyed the simple pleasures video gaming provides.

Except, clearly, the games are no longer simple. Far from it.

An incredible level of sophistication now permeates and characterises these strange new worlds.

Some will argue that the silver screen is dimming. Others, that we are simply demanding more engagement from our entertainment.

So much of GTA V's DNA comes from films that it would be obtuse to suggest that cinema is a dying genre.

But the experience video games provide will only become more immersive.

So perhaps, one day, the credits will no longer roll. End scene, cut, print.

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F1 Owner Courts Gulf Funds For $2bn IMG Bid

By Mark Kleinman, City Editor

The biggest investor in Formula One (F1) motor racing is teaming up with one of the biggest shareholders in the McLaren sports car group to form a $2bn offer for IMG, the sports rights agency.

Sky News has learnt that CVC Capital, which owns roughly one-third of F1's parent company, has joined forces with Mumtalakat of Bahrain to bid for IMG.

Initial bids for IMG, which counts the men's world tennis number one, Novak Djokovic, among its biggest clients, are due within days.

Under CVC's plans, it would form a consortium in which it would hold a 60% stake in IMG, while Mumtalakat and the Abu Dhabi Investment Authority (ADIA) - both of which are sovereign-backed groups - would own interests of about 20% each, according to a person close to the auction.

The Middle East-based entities are investors in the circuits which stage the two countries' respective Grands Prix, which have become annual fixtures on the F1 calendar.

CVC's consortium is expected to be in a powerful position in the auction of IMG, which has been owned by Forstmann Little, a US buyout firm, since 2004.

Its decision to sell is sparking interest from potential bidders around the world, including a joint offer from KKR and New Mountain Capital, which was established by a former IMG executive.

Set up in 1960 by the late Mark McCormack, who wanted a vehicle to represent the golfing legend Arnold Palmer, IMG has gone on to become one of the biggest names in global sport.

Earlier this year, it signed a deal to act as stadium consultant to the organisers of the 2022 FIFA World Cup in Qatar. It also counts Wembley and the Maracana in Rio de Janeiro among its other stadium clients.

The agency has also diversified in recent years into the worlds of fashion and entertainment, now employing 3500 people around the world and striking joint ventures with big media companies in key emerging markets such as Brazil, China and India.

In 2010, IMG made $78m (£51.3m), while this year it is expected to make more than double that amount, with its emerging markets exposure providing a platform for future growth.

The entry of hundreds of millions of people into the world's middle classes in Africa, Asia and Latin America over the next two decades will further expand demand for access to live sport, agencies such as IMG believe.

CVC would be a logical buyer of IMG. Since gaining control of F1's shares in 2005, it has grown the sport's profits significantly, to the extent that it has been planning a stock market listing in Singapore that could value F1 at $12bn (£7.9bn).

It also previously owned Dorna Sports, the organisation behind the Moto GP racing series, and bought All Sport Management, the company which has the rights to advertise at F1 circuits around the world.

The private equity group this year abandoned a bid for Betfair, the betting exchange, but owns other leisure assets in the UK, including a big stake in Virgin Active, the health and fitness chain.

CVC faces tough competition to secure control of IMG, which is arguably the most coveted sports rights asset to come up for sale for several years.

Among others considering bids are Colony Capital, which had a £1.3bn offer rejected earlier this year.

Rival talent managers such as Creative Artists Agency are also expected to bid, as may IMG partners including Reliance Industries in India.

CVC declined to comment.

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