Monday newspaper round-up: Greece, Bank lending, FTT

The Greek prime minister has failed to secure a bondholder agreement despite appealing for help from the bosses of the International Monetary Fund (IMF) and the European Central Bank (ECB) to help break the dangerous deadlock. Sources close to the private creditors told The Daily Telegraph that an agreement was still "some way off". Although the banks have in principle agreed to take a 50% loss on their bonds and an artificially low coupon on new Greek debt, the process is complicated by the demands of international officials on the country's budget. Those same sources said the "focus" of the talks remained stuck on troika demands that include a 25% reduction in the minimum wage and tougher public sector spending and job cuts, The Telegraph reports. Bank lending is set to fall for the first time in three years hitting businesses and consumers, according to research by Ernst & Young. (...) In a further worrying development for the financial services industry, Ernst & Young's ITEM Club has warned that the UK could bear the brunt of an EU financial transaction tax (FTT) even if the Government opts out of it. On lending capacity Neil Blake, senior economic adviser to the Ernst & Young ITEM Club said: "We have been warning about the impact bank deleveraging could have on the economy for some time, but this is the first time there will be an annual contraction in total loans since 2009, when the UK economy was still ¬suffering from the immediate effects of the global financial crisis." E&Y said it expects total bank loans to contract by 2.2% in 2012, with just 0.9% growth forecast in 2013. The falls come after an estimated 4.3% rise in 2011, according to The Telegraph. Vodafone has walked away from talks to merge its Greek network with Wind Hellas after discussions broke down over the past weeks. The companies opened talks in August last year about a potential 50:50 merger to overtake the market leader Cosmote, but the deal was mired in complications related to competition between the two networks. The structure of the deal was also in question, with Vodafone seeking to take a majority share after it participated in an auction for spectrum, the frequencies used to carry mobile phone signals, at a cost of €150m (£125m). It also wrote off the value of its Greek network by €450m the last time it reported results. An agreement could not be struck over a potential 60:40 merger split and Vodafone will announce today that it has pulled out of talks. The company had expected to close in on a deal in the run-up to its third-quarter results due on Friday, The Times reports.Tesco has delayed the launch of its current account until next year. Its much-vaunted arrival had been regarded as a symbolically important breakthrough in attempts backed by ministers to break up the dominance of the big five established banks. Tesco Bank had intended to introduce the current account this year. It is regarded as an "anchor product" by Tesco and a crucial step towards selling other banking and insurance products. The delay will enable Tesco to take advantage of new rules making it easier for current account customers to defect from the dominant high street banks, it said. With 6.5 million customers and the scope to promote the account to the Tesco's 16 million active Clubcard holders, the current account plans have the potential to create a serious new challenger, The Times says. Thousands of workers at beleaguered retailer Peacocks have been given renewed hope that their jobs might be saved after it emerged a Pakistani billionaire is working on a rescue bid for the chain. Alshair Fiyaz has teamed up with Danish investment fund Solstra Capital to table a second-round bid, expected tomorrow, for the group, which is in administration. The business tycoon, who made his fortune in the textile industry and whose family wealth is estimated at £3bn, is understood to be working with Peacocks' senior management team, including managing director Tim Bettley. Mr Fiyaz's main interests are in shipping and financial services. But three years ago, he bought Magasin Du Nord, known as Denmark's Harrods, subsequently leasing the chain to Debenhams department store, The Telegraph writes.Britain´s financial services firms could pay up to 60% of the proposed European transaction tax even if the UK opts out, a report will warn today. The Ernst & Young Item Club has calculated that the UK would be liable to pay 75% of the revenues from the European Commission's Financial Transactions Tax (FTT) because of the size and scale of Britain's financial services sector relative to the rest of Europe. But even if the UK opts out, the country's financial sector would still have to contribute about 60% of total revenues if a "reverse charge mechanism" was applied. Neil Blake, the Item Club's senior economic adviser, said: "(...) However, even if the UK were to opt out of the FTT, if a reverse charge mechanism was applied, we expect the UK financial sector would still contribute around 60% of total revenues. These revenues would flow directly to governments in the Eurozone rather than to the UK Exchequer," The Scotsman reports.Barclays is poised to report profits of nearly £700,000 an hour in a crucial week for some of Britain's biggest companies. The bank is expected to announce annual profits of £6bn on Friday - broadly similar to the previous year and an incredible £16.4m a day or £685,000 an hour. The bumper haul at Bob Diamond's Barclays - likely to be accompanied by a furious row over bonuses after Royal Bank of Scotland chief Stephen Hester was forced to waive his payout of nearly £1m - will follow closely-watched updates from a raft of blue-chip companies. Investors will be hoping for strong figures from the likes of BP, GlaxoSmith-Kline and Rolls-Royce as they look to build on an impressive start to the year for the stock market. Profits at engine maker Rolls are tipped to smash through the £1bn barrier for the first time in a major boost to British industry and the economy, according to The Daily Mail.