TOP NEWS SUMMARY: Lloyds Considers Cash Return As PPI Claims Continue

LONDON (Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Lloyds Banking Group declared its second dividend since the financial crisis as it reported higher profit in the first half, raised its guidance for 2015, and said it will consider returning surplus capital to shareholders in future. The results were not free of bad news. Lloyds took a "disappointing" GBP1.4 billion provision for the payment-protection insurance scandal in the half, bringing the bank's total provision to GBP13.4 billion, as PPI complaint volumes were above expectations in the half, Lloyds said, with claims management companies blamed for the continuing claims. The bank also counted the GBP117 million cost of a fine imposed by regulators for its handling of PPI complaints and a GBP318 million provision for other conduct, including a GBP175 million charge for complaints about packaged bank accounts. The bank said it will pay an interim dividend of 0.75 pence per share.
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The UK government is set to launch its first sale of shares in The Royal Bank of Scotland Group since the lender was bailed out by the taxpayers nearly seven years ago, The Times reports. The Times said banks have been sounding out investors in the past week about a sale of RBS stock, which could happen in the next few days. The newspaper said the aim is to sell around GBP2.5 billion, or 6%, of the bank's shares in the initial sale, with taxpayers set to make a loss.
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International Consolidated Airlines Group maintained its targets for the current financial year as its operating profit surged in the first half. The airline, which owns British Airways and Iberia and which is in the process of acquiring Irish flag carrier Aer Lingus Group, said its operating profit excluding exceptional items in the first half to the end of June was up to EUR555 million, sharply higher than the EUR230 million it posted a year earlier. Total revenue for IAG rose to EUR10.36 billion from EUR9.29 billion, as its passenger revenue in the half increased to EUR9.12 billion from EUR8.18 billion. At constant currencies, however, revenue was down by 2%, as the reported figure was flattered by the weak euro.
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BG Group reported a slump in revenue in the second quarter leading to an almost halving of earnings by one measure, as a large rise in production was not enough to offset the fall in oil and gas prices. The multi-commodity company reported earnings before interest, tax, depreciation and amortisation of USD1.37 billion in the second quarter of 2015, down from USD2.64 billion a year earlier as revenue slumped to USD3.97 billion from USD5.50 billion. A 19% rise in E&P production volumes and a 17% lift in LNG delivered volumes was not enough to offset the fall in oil and gas prices compared to a year earlier. BG Group maintained its interim dividend of 14.38 cents per share as expected.
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Miner Antofagasta said it has entered into a definitive agreement with Barrick Gold which will lead to the company acquiring a 50% stake in the Zaldivar copper mine in Chile. Antofagasta will acquire the stake in the holding company, Compañia Minera Zaldívar, from Barrick Gold for a total consideration of USD1.00 billion in cash, of which USD980 million will be paid once the deal has been closed, followed by five annual payments of USD5 million starting in 2016. The transaction will be funded with cash from Antofagasta's balance sheet, and is expected to be immediately accretive to Antofagasta's earnings and cash flow per share, it said.
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Telecommunications and cable group Liberty Global said it has increased its stake in broadcaster ITV to 9.9%. Liberty has acquired a further 138.7 million shares in ITV, increasing its total holding to 398.5 million. At the same time it has entered into a hedging transaction in respect the new shares it has acquired and has obtained further financing from its hedge counterparty.
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InterContinental Hotels Group late Thursday said it is not in talks with US hotel group Starwood Hotels & Resorts Worldwide Inc about a merger. IHG said in a statement after the market close that it was responding to recent market speculation. "The board of directors of IHG states that it is not in talks with Starwood with a view to a combination of the businesses," the statement read. The two companies have been the subject of frequent rumours in recent months, with IHG thought to be facing investor pressure to consider a tie-up.
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Construction and support services company Balfour Beatty said its joint venture with engineering company NG Bailey has been appointed preferred bidder on the GBP460 million Hinkley Point C power station electrical package, awarded by French energy company EDF Energy. Meanwhile outsourcer G4S said it has won a GBP80 million, ten-year deal with EDF to provide security services for the construction of the nuclear power plant.
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Martin Lewis, the founder and editor-in-chief of MoneySavingExpert.com, has sold a 1.6% stake in price comparison website Moneysupermarket.com Group for GBP25.2 million. Credit Suisse said it sold 9.0 million shares on behalf of Lewis, who sold MoneySavingExpert.com to Moneysupermarket in 2012, leaving him with a 1.5% stake in the company. Lewis, who still holds 8.4 million shares in the company, will be unable to sell further shares for 180 days on completion of the placing. Another 4.3 million shares were placed with investors on behalf of the Charities Aid Foundation, which cut its holding to 0.1% from 0.9% as a result.
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Retailer JD Sports Fashion said it anticipates beating market expectations for the full year, after the group said trading remained strong in its business in the first half of the year. JD said like-for-like sales in the half year to August 1 have been ahead of its expectations, though the group has seen its margins squeezed by the weakness of the euro. But, assuming its current performance continues, JD Sports said it expects its headline pretax profit for the full year will be around 10% ahead of the current market consensus of GBP110 million.
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Molten metal flow engineering company Vesuvius said its pretax profit fell in the first half of 2015 due to a fall in global steel production and inventory volumes which pulled down its revenue in the half. The group said its pretax profit in the first half fell to GBP37.9 million, down from GBP40.4 million a year earlier, as the decline in global steel production pulled down revenue to GBP702.6 million from GBP729.8 million a year earlier. The group said it will pay an interim dividend of 5.15 pence per share, up 3% from the 5 pence it paid a year earlier.
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Plastic and fibre products company Essentra said its pretax profit fell in the first half of 2015 thanks to exceptional costs it booked in the period, but revenue surged on the back of the acquisition of Clondalkin Specialist Packaging. Pretax profit for the company fell to GBP45 million from GBP49 million a year earlier, thanks to one-off costs Essentra booked, primarily related to the acquisition of Clondalkin. Revenue rose to GBP550.4 million in the half, up from GBP431.1 million, primarily thanks to the Clondalkin acquisition, as like-for-like revenue growth came in at 1.1%. Essentra said it will pay an interim dividend of 6.3 pence per share, up from 5.7 pence per share a year earlier.
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MARKETS
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UK stock indices are trading mixed mid-morning Friday, with company news still taking much of the market's attention, as ITV leads FTSE 100 gainers after Liberty Global increased its stake in the broadcaster.
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FTSE 100: down 0.3% at 6,651.83
FTSE 250: up 0.1% at 17,534.02
AIM ALL-SHARE: down 0.1% at 749.49

GBP: down at USD1.5571
EUR: up at USD1.0980

GOLD: down at USD1,081.54 per ounce
OIL (Brent): down at USD52.63 a barrel

(changes since end of previous GMT day)
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ECONOMICS AND GENERAL
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British Prime Minister David Cameron will chair a meeting of the government's Cobra emergency committee to discuss thousands of migrants stranded in the French port of Calais on Friday, one day after he was widely criticised for his response to the crisis. Cameron was expected to prioritise strengthening security in Calais and on both sides of the Channel Tunnel, which runs under the English Channel between Britain and France. Some 200 migrants crossed security fences in attempts to reach the tunnel overnight, reports said, following much larger nightly incursions since Sunday. Speaking in Vietnam on Thursday, Cameron promised that Britain will deport more illegal migrants "so people know it's not a safe haven." He said Britain and other European nations faced a "swarm of people coming across the Mediterranean, seeking a better life," drawing condemnation from opposition politicians, rights groups and a UN envoy.
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Consumer confidence in the UK stalled in June, the latest survey from polling firm GfK revealed on Friday with an index score of +4. That missed forecasts for +5 and was down from +7 in June.
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Unemployment in the eurozone remained unchanged at 11.1% for a third consecutive month in June, with more people joining the jobless ranks in the European currency bloc, new data showed. The seasonally adjusted unemployment rate is at its lowest level in more than three years, but the eurozone has struggled to push it down significantly since a record 12% was reached in 2013. The number of jobless people increased by 31,000 from May to June, but the change was not enough to push up the overall rate, according to the EU statistics agency Eurostat. Analysts had expected the figure to remain at 11.1% or inch down to 11%.
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Eurozone inflation remained unchanged in July at 0.2%. The annual cost of living in the 19-country currency bloc had crossed into positive territory in May for the first time in six months, slightly calming fears of deflation. Some analysts had expected inflation to drop to 0.1% this month, but the EU statistics agency Eurostat said in a first estimate that it held steady. The inflation rate is nevertheless far off the European Central Bank's annual target of just below 2%. The institution launched a monetary stimulus plan at the beginning of the year to help prevent deflation.
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Greece's finance and economy ministers were meeting with the representatives of the country's creditors Friday for talks on a new multi-billion euro bailout ahead of a looming debt repayment to the European Central Bank. The mission chiefs of the four institutions overseeing the negotiations - the ECB, the European Commission, the International Monetary Fund and the European Stability Mechanism - were meeting with finance minister Euclid Tsakalotos and Economy Minister Giorgos Stathakis. The meeting follows three days of talks between technical teams on several issues including fiscal policy, pension, labour and product market reforms. The Greek government had said it intends to conclude negotiations with creditors over the new bailout by August 18, two days before a payment of EUR3.2 billion to the ECB.
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A report by the Financial Times on Thursday cited an internal document that showed the IMF board had been told that Greece's levels of debt and past record of slow or non-existent reform disqualify it for a third bailout from the Washington-based crisis lender. According to the leaked document, the IMF could take months to decide whether it will take part in a fresh bailout. A Greek Finance Ministry official denied the report, saying the IMF would participate in the bailout negotiations as planned.
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Greece's ruling Syriza will hold an emergency party congress in September to settle the rift between Prime Minister Alexis Tsipras and the party's left wing, Syriza's central committee decided late Thursday. Tsipras proposed the party congress, which is expected to be a test of his leadership. In a televised address to the central committee, he warned that the government could fall if not supported by its leftist deputies. "The first leftist government in Europe after the Second World War is either supported by leftist deputies, or it is brought down by them because it is not considered leftist," he said. Tsipras said it was up to the Greek people to decide whether the bailout terms amounted to blackmail, as many in Greece feel.
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The unemployment rate in Japan came in at a seasonally adjusted 3.4% in June, the Ministry of Internal Affairs and Communications said. That was above forecasts for 3.3%, which would have been unchanged from the May reading.
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Consumer prices in Japan gained 0.4% on year in June, the Ministry of Internal Affairs and Communications said. That beat expectations for an increase of 0.3%, although it slowed from 0.5% in May. On a monthly basis, inflation dipped 0.2%. Core inflation, which excludes the volatile prices for fresh food, added 0.1% - unchanged from the previous month and above estimates for a flat reading. On a monthly basis, core inflation was flat.
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The head of the Organization for Petroleum Exporting Countries said Thursday that prices for oil will not significantly rise even if the cartel's daily production quota is reduced by 2 million barrels from the current 30 million. Therefore the organization does not plan to reduce the quota, Secretary General Abdallah Salem el-Badri said in comments carried by Russian state news agency RIA Novosti. He made the comments after meeting with Russia's energy minister in Moscow to discuss the influence of Iran increasing sales of oil following the removal of Western sanctions against that country.
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