Northern Rock losses grow by more than £500m - papers

Northern Rock is expected to heap further embarrassment on the Government next month when it reports losses for the half in excess of £500m, putting it in breach of even specially relaxed regulatory rules, according to The Telegraph.

The nationalised lender revealed yesterday that its capital base, the key measure of financial strength, “has now reduced to a level below its minimum regulatory requirement”. The breach occurred despite a special waiver from the Financial Services Authority (FSA) that allowed the bank to flatter its reserves levels. 

Analysts calculated that, to be in breach, the bank must have lost more than £500m in the past six months alone. Last year, Northern Rock made a £1.36bn loss after £1.15bn of bad debts. In December, a third of its £67bn mortgage book was in negative equity. Full story…

A government appointed bank boss who was awarded a controversial £10m incentive package yesterday agreed to delay taking some of his bonus for up to two years following pressure from investors and unions enraged by the deal.

The Guardian reports, Stephen Hester, the chief executive of RBS, who is paid a £1.2m base salary, will delay taking shares in the company worth about £3.4m that he could have taken after three years if RBS shares reached 70p.

Investors are likely to cheer the renegotiated pay deal, though unions are expected to continue their campaign for pay restraint by the board while the bank is sacking thousands of workers. Full story…

Standard Chartered is set to appoint John Peace, a boardroom heavyweight known mostly for his retail experience, as its chairman.

According to The Times, the emerging markets bank may make an announcement as early as today. Mr Peace is already on Standard Chartered’s board and has been acting chairman since Lord Davies of Abersoch left the bank in January to join the Government as Trade Minister.

Mr Peace, 60, is also chairman of Burberry, the luxury fashion chain, and Experian, the credit-checking firm that was spun off with Burberry from Great Universal Stores, the conglomerate that he broke up after becoming chief executive in 2000. Full story…