Friday Papers: Stress tests point to Goldman weakness

Top stories

• Financial Times: Goldman Sachs would suffer a $20 billion loss in a severe financial crisis, according to a Federal Reserve stress test that marks out the renowned Wall Street institution as one of the weakest in the industry and limits its ability to pay dividends.
• Financial Times: Top pension funds are reconsidering the size of their investments in the insurance sector after Aviva shocked the City on Thursday by slashing its dividend 44%.
• The Guardian: The insurance firm Aviva will pay no executive bonuses this year and is freezing pay for senior management after crashing into the red with a £3.1 billion loss after tax.
• Financial Times: The European Central Bank declared that it would maintain an easy monetary policy stance “as long as needed” while the eurozone battles record unemployment and shrinking economic activity.
• The Daily Telegraph: Barclays chief executive Antony Jenkins has suggested that up to 40,000 jobs could be cut at the bank as customers switch to automated banking, according to reports.
• Financial Times: Stephen Elop, the chief executive of Nokia, received €4.3 million in cash and stock options last year, down from €7.9 million in 2011, according to a regulatory filing on Thursday.
• The Guardian: The Royal Bank of Scotland chief, Stephen Hester, is due to be handed a bonus worth £700,000 as the bailed-out bank grapples with a new outbreak of computer problems that have left customers demanding compensation.
• Financial Times: The cost of BP’s court settlement with businesses and individuals affected by its 2010 Gulf of Mexico oil spill will be “significantly higher” than $7.7 billion, the company warned, as payments being made under the deal come in higher than expected.
• Financial Times: HSBC’s $1.9 billion settlement with US authorities over money-laundering violations has come under attack from lawmakers, following an admission by America’s top prosecutor that the size of big banks impedes attempts to bring criminal prosecutions.
• Financial Times: Paul Milsom, 45, a former equities sales trader at the investment arm of Legal & General, has been jailed for two years in the first sentence to come out of the Financial Services Authority’s biggest insider dealing investigation to date.
• Financial Times: Carl Icahn has taken a sizeable stake in Dell and is pushing the PC maker to abandon its $24.4 billion buyout plan in favour of a leveraged recapitalisation and special dividend, according to a letter from the billionaire activist investor to the company.
• Daily Mail: Tesco Mobile has accused its competitors, including O2, which powers its network, of making £217 million out of mid-contract price rises.
• Financial Times: Ten executives have resigned from Indonesian coal miner Bumi Resources in a possible step toward separating the Bakrie family-linked company from London-listed parent Bumi.
• The Independent: Daw Mill Colliery, one of the UK's last remaining coal mines, is to shut with the loss of up to 650 jobs.

Business and economics

• The Guardian: The Bank of England resisted pressure to inject billions of pounds into the economy on Thursday, amid mounting speculation that its remit could be changed to encourage policymakers to focus on growth rather than inflation.
• The Daily Telegraph: The pound’s recent slide could be the start of “a new sterling crisis” sparked by concerns about the state of the public finances, according to the Euro Group’s new president Jeroen Dijsselbloem.
• Daily Mail: Real wages of British workers dropped by 4.5% between 2007 and 2011 – fastest among the workforce in a developed economy.
• The Daily Telegraph: France's Finance Minister Pierre Moscovici has cautioned that continuing along a path of strict austerity would only "nourish a social crisis that leads to populism".
• Financial Times: Nearly nine months after Cyprus became the fifth country in the eurozone to request an international bailout, eurozone leaders were this week back in talks over a rescue deal.
• Financial Times: Dividends paid by European-listed companies fell 0.8% in 2012, the first time aggregate payouts have fallen since 2009, according to data from Thomson Reuters IBES.
• The Independent: RBS Banking Group faces fresh compensation claims from millions of customers who were unable to withdraw cash, pay for goods and services, or carry out telephone or online banking on Wednesday night.
• The Guardian: The John Lewis retail chain has handed its 84,700 staff an annual bonus worth 17% of their salary – the equivalent of nine weeks' pay – as the employee-owned company continues to outperform its rivals.
• Daily Mail: Standard Life will return £302 million to shareholders after it delivered £286 million in UK pre-tax operating profits, up from £156 million the previous year.
• Financial Times: ITV and other UK broadcasters have received the legal backing to block TV Catchup, a popular streaming website, from retransmitting their free-to-air content to its users.
• The Guardian: The US's top aviation safety investigator is to hold hearings on the safety of lithium-ion batteries similar to those used in Boeing's now grounded 787 Dreamliner jets.
• Financial Times: Trading in Gap shares was halted briefly on Thursday after the retailer’s latest sales data were accidentally released several hours early, the latest case of an unplanned data leak roiling companies and markets.
• The Daily Telegraph: Gaming company Sportech, owner of the Football Pools, is expecting to recoup £80 million from HM Revenue and Customs after winning a claim that it was incorrectly charged VAT on a game called Spot the Ball.
• Financial Times: Kate Richdale, who headed Morgan Stanley’s investment banking operations in Asia, excluding China and Japan, will become the head of Goldman’s client-focused investment banking services in Asia Pacific, ex-Japan, according to an internal memo seen by the Financial Times.
• Financial Times: Facebook unveiled a redesign of its most popular user feature on Thursday that emphasises visual content and gives users more choices over what they see on their homepage.
• The Daily Telegraph: Cineworld, which has 80 cinemas, reported a 15.3% rise in pre-tax profits to £38.5 million for 2012, fuelled by a 5% rise in the average price of a ticket to £5.26.

Share tips, comment and bids

• The Guardian: Sports group Adidas has been forced to write off €265 million at its troubled Reebok business during a year, which pushed the German-based business into the red by €239 million over the last three months.
• The Guardian (Comment): David Cameron and Vince Cable are both wrong. Infrastructure isn't the answer and nor is QE – money in pockets is.
• The Guardian (Comment): Time Inc and Time Warner: you know the show's over when their parent company has lost interest in four of the greatest US magazine titles ever.
• The Daily Telegraph (Comment): How come the stock market is going up, when the economy keeps tanking?
• The Daily Telegraph (Comment): For investors at least, Aviva has become a high-risk liability.
• Financial Times (Lex): Aviva: UK insurer has sold businesses in the US and Netherlands, improved its solvency and cut costs but its real challenge now is to generate growth.
• Financial Times (Lex): Time Warner: magazine business is shrinking not collapsing, but new spun-off company will want to control costs, with a merger one possible option.
• Financial Times (Lex): Fox Sports: News Corp’s new sports network is a counterpunch to Disney’s ESPN but times are tough, with the rights to screen live events both expensive and scarce.
• Financial Times (Lex): Carrefour: asset sales help to treble profits and free up funds for capital expenditure but investors will want to see more sustainable improvements by retailer.