Lloyds Steps Towards Female Executive Target

By Mark Kleinman, City Editor

The state-backed Lloyds Banking Group has taken a step towards meeting a self-imposed gender target for senior managers with the appointment of another top female executive.

Sky News understands that Lloyds issued an internal announcement on Wednesday which named Mary Hall as the lender's new group audit director, one of its most senior positions.

Ms Hall, who joins from KPMG, will report to Nick Luff, the departing finance director of Centrica who chairs Lloyds' audit committee.

She will become the second-most senior woman at the bank after Alison Brittain, who runs its retail banking operations.

Ms Hall's arrival comes nearly four months after Lloyds said that it wanted 40% of its top 5,000 posts to be filled by women by 2020.

That ambition will entail the appointment of an additional 600 women to senior jobs at Lloyds within six years, with roughly 28% of its top 5,000 jobs currently held by women.

One of Ms Hall's priorities will be to launch an exercise to tender Lloyds' audit contract, one of the most lucrative in British business.

PricewaterhouseCoopers, the incumbent, is expected to compete to retain the mandate from 1 January 2016, which will be subject to shareholder approval at next year's annual meeting.

Lloyds' pledge this year to bolster the number of top women at the bank came amid mixed results from a concerted push to improve boardroom diversity.

The Government has thrown its weight behind a voluntary campaign to ensure that 25% of the directorships of FTSE-100 companies are held by women by the end of next year and has threatened to impose formal quotas if the objective is not met.

Glencore, the miner and commodities trader, is now the only company in Britain's blue-chip share index which has an all-male board, a situation it has promised to rectify by the end of the year.

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Centrica Confirms Exit Of Weston To Aggreko

The top boss at British Gas is to leave the company, amid a management shake-up at the UK's biggest energy supplier.

Centrica issued a statement saying Chris Weston, managing director of its international downstream business, had tendered his resignation in order to become CEO of Aggreko.

He is expected to join the temporary power group next year, once he has fulfilled his commitments at Centrica.

Details of the energy supplier shake-up were first revealed by Sky News City Editor Mark Kleinman.

Meanwhile, speculation has been mounting about the future of Sam Laidlaw, Centrica's long-serving chief executive.

Centrica said at its annual meeting earlier this month it was beginning the process of exploring options for management succession, with a replacement also due to be found for Nick Luff, its finance director.

The intense row about energy prices is said to have been a factor in recent deliberations of both Mr Laidlaw and Mr Weston, who has only held the British Gas role for 15 months, over their futures.

Kleinman said: "I understand Mr Weston was uncomfortable at the amount of scrutiny the role attracted as the boss of British Gas, especially as he had only been in the role for a short time.

"He was under intense pressure to hand back or give up the £281,000 bonus he received earlier in the year. He didn't do that.

"I think for him, this is an easy way out of the maelstrom that surrounds British Gas and the other big energy companies."

Britain's energy sector is facing a full competition inquiry, turning the heat up even further for the so-called big six suppliers.

Centrica is now expected to try and fill the roles of three top executive positions, including that of its finance director.

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Help To Buy: 80% Go To First Time Buyers

A total of 80% of the Help To Buy mortgage scheme loans granted in its first six months were given to first time buyers.

The Treasury said a total of 7,313 loans were issued, with a total value of £1bn.

The average value of each loan taken out under the controversial scheme was £136,742.

The figure shows that only about 1% of all mortgages taken out in the period were helped by the scheme, undermining critics of the programme who have said it is prompting a house price bubble.

Most mortgage completions through the scheme were completed on properties outside London and the South East, in regions where prices are lower.

A high proportion of homes supported by the scheme were in the North West and the East of England.

The mean value of a property purchased or remortgaged through the scheme is £151,597, compared to a national average house price of  £252,000.

More follows...

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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AstraZeneca 'Must Link Pay To New Targets'

By Mark Kleinman, City Editor

AstraZeneca should link future executive pay to the price that its board signalled it would be willing to sell the company for, a leading shareholder has told it in a move which intensifies the pressure on it to justify the rejection of a string of takeover bids.

Sky News has learnt that in a letter sent to the British pharmaceuticals group last week, Legal & General Investment Management (LGIM) said long-term share awards should pay out in full only if AstraZeneca's share price reaches £58.85.

That was the level at which the company has said it would be willing to discuss a takeover by Pfizer, its US rival.

Last weekend, Pfizer offered £55-a-share for AstraZeneca, valuing it at £69bn, which was rejected by its prospective merger partner.

It emerged on Wednesday that LGIM was among AstraZeneca shareholders which were disappointed by the decision to spurn Pfizer's offer, which is expected to lapse on Monday when a deadline expires for it to lodge a formal bid.

Sources said that LGIM, which owns approximately 3.5% of AstraZeneca and is its sixth-largest investor, had also called for executives' pay to be linked to a $45bn (£26.7bn) revenue forecast which was outlined by the drugs-maker's chief executive, Pascal Soriot, as part of its defence against Pfizer's approach.

LGIM's demand goes further than those of other AstraZeneca shareholders, a number of which have called for pay to be partly-determined by the shares hitting £55, the level of the most recent Pfizer offer.

"If the remuneration committee of AstraZeneca – and, indeed, any company rejecting an offer in favour of long-term independence – was to recalibrate any current and future incentives to vest only at the level of the spurned takeover, it would provide comfort to shareholders that if things do not play out as the management envisage, the executives have shared in the pain felt by shareholders at the lost opportunity," Richard Buxton, head of UK equities at Old Mutual Global Investors, wrote in a letter to the Financial Times.

AstraZeneca investors are divided about the board's handling of the bid, with its shares closing on Friday at £43.28.

Last week, Schroders issued a statement criticising the actions of both companies, while Sky News revealed that BlackRock, AstraZeneca's biggest shareholder, wants it to invite Pfizer to reopen merger talks.

Those which have backed the board's stance that AstraZeneca would be stronger as a standalone business include Fidelity Investments, M&G Investments and Woodford Investment Management.

Under rules supervised by the City takeover watchdog, Pfizer will be prohibited from making a further offer for AstraZeneca for six months if it abandons its interest. It has said it will not make a hostile bid by going directly to AstraZeneca's shareholders.

However, the British group, which will set out further details of its cancer drug pipeline at a key industry conference in the US this week, could approach Pfizer to enter talks in three months' time.

Pfizer's interest in AstraZeneca has sparked a row in Westminster about the US company's track record in research and development.

LGIM, AstraZeneca and Pfizer all declined to comment.

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with an unconnected problem that affected some Lloyds, Halifax and Bank of Scotland online users.

In a statement given to Sky News, a spokesperson for RBS Group said: "Some customers may have had trouble getting into mobile banking today between 8.40am and 2.30pm.

"All services are back up and running as normal.  We apologise for any inconvenience this caused."

A spokesman for Lloyds Banking Group said there was a temporary issue on Friday morning that affected mobile and online services for a small number of customers who were trying to set up payments at Lloyds, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

A Lloyds spokesman said: "We are aware that a small number of customers experienced issues accessing payments this morning.

"The issue has now been rectified and we are working with those customers who were affected."

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with an unconnected problem that affected some Lloyds, Halifax and Bank of Scotland online users.

In a statement given to Sky News, a spokesperson for RBS Group said: "Some customers may have had trouble getting into mobile banking today between 8.40am and 2.30pm.

"All services are back up and running as normal.  We apologise for any inconvenience this caused."

A spokesman for Lloyds Banking Group said there was a temporary issue on Friday morning that affected mobile and online services for a small number of customers who were trying to set up payments at Lloyds, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

A Lloyds spokesman said: "We are aware that a small number of customers experienced issues accessing payments this morning.

"The issue has now been rectified and we are working with those customers who were affected."

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

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