THE SUN
Customers quit NatWest after IT chaos
Boss: It's fixed... fingers crossed
By Steve Hawkes, Business Editor, and Jenna Sloan
Royal Bank of Scotland was facing a customer exodus last night over the NatWest IT meltdown that left thousands penniless.
Furious customers vowed to quit the bank after finding their accounts still empty yesterday — seven day after the fiasco started.
Under-fire RBS boss Stephen Hester insisted computer systems would soon be back to normal, adding: “I think we’re well on the road to recovery. Fingers crossed — all the bugs have been got out.”
But customers have already started deserting the bailed-out giant, which received £50billion of taxpayers’ cash in 2008. Experts believe the chaos could cost RBS “hundreds of millions of pounds” through extended branch opening hours and fee waivers.
DAILY MAIL
Bank boss 'must pay price' for accounts shambles: RBS chief faces calls to forfeit another bonus as crisis is linked to IT team in India
By Vanessa Allen and Ruth Sunderland
Banker Stephen Hester faced calls to forfeit his bonus and fall on his sword yesterday after the computer meltdown continued to cause chaos for millions.
A leading peer said there was ‘no question’ of the Royal Bank of Scotland chief executive receiving an annual bonus from the state-owned bank – if he was allowed to keep his job.
His remarks came as it emerged the software support team for the at-fault computer programme is based in India. As well as his short-term bonus, Hester is also eligible for £7.9million of long term incentive awards over a number of years, provided he meets performance targets.
But he cannot even guarantee that the crisis – which has led to a backlog of 100 million transactions – will have been ironed out by the end of the week amid claims from insiders that the ‘priority incident’ is far from being resolved.
THE GUARDIAN
RBS boss says outsourcing not to blame for computer glitch
By Jill Treanor
Royal Bank of Scotland is continuing to keep thousands of branches open for longer in an effort to contain the fallout of its ongoing computer crisis, which analysts said would cost the bailed-out bank tens of millions of pounds.
On the sixth day of the computer problems that have stopped as many as 13 million customers of NatWest, Ulster Bank and RBS from accessing account information, the chief executive, Stephen Hester, spoke publicly for the first time to say that the bank was "well on the road to recovery" in tackling the crisis. Bonuses next year would take account of the inconvenience to customers, he added.
Banking analyst Ian Gordon of Investec estimated that the crisis could cost RBS tens of millions of pounds in repaying overdraft charges and other fees, ensuring customers stuck abroad were not left out of pocket, and covering overtime bills for staff, about 7,000 of whom were parachuted in over the weekend to open branches on a Sunday for the first time. Putting a price on reputational damage was tougher – especially if customers move their accounts.
The main IT centre was in Edinburgh, said Hester, who has based himself in the Scottish capital rather than London for the coming days. The problem was caused by a botched systems upgrade last Tuesday, which caused a backlog at a bank that normally handles 10m payments a day. Other banks are also now receiving delayed information about transactions.
FINANCIAL TIMES
MI5 chief sets out price of cyberattack
By James Blitz, Defence and Diplomatic Editor
State-sponsored cyberattacks against the computer systems of a major listed British company cost it £800m in lost potential revenues, the head of Britain’s domestic Security Service MI5 said on Monday, highlighting the huge threat that UK business faces from internet-based espionage.
Jonathan Evans, MI5’s director general, said the amount of hostile activity being generated by foreign states in cyberspace was now “astonishing”.
In a speech to the City of London, Mr Evans said that, as they investigated threats across the internet, the security services were discovering “industrial-scale processes involving many thousands of people lying behind both state-sponsored cyber espionage and organised cyber crime.”
THE TELEGRAPH
S&P warns OBR's UK growth forecasts are too optimistic
By Angela Monaghan, Economics Correspondent
S&P said the Office for Budget Responsibility’s expectation that the economy will grow by 0.8pc this year and 2pc in 2013 may well prove “overly optimistic” given the weak outlook for the British economy.
The economy shrank by 0.3pc in the first quarter, plunging Britain into its first double-dip recession since 1975.
“Given the UK’s fiscal restraint, weak private-sector demand, and softening trade and business conditions, it is unclear what will quickly bring the country out of the doldrums,” said S&P in a research paper.
The OBR’s forecasts provided the backdrop for the Chancellor’s Budget proposals in March, but S&P thinks growth will be limited to 0.5pc this year and 1pc next year.
THE GUARDIAN
Cyprus seeks eurozone bailout
By Larry Elliott and Giles Tremlett
Cyprus has become the fifth eurozone country to seek outside financial help to shore up its ailing economy after a day of heavy selling on financial markets prompted by fear that this week's European summit will end without a blueprint to rescue the single currency.
The government in Nicosia admitted that it had been caught in the backwash from the crisis in neighbouring Greece as it formally applied to Brussels for assistance.
On a day when Fitch cut Cyprus's credit rating to junk, a statement said: "The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spill-over effects through its financial section, due to its large exposure in the Greek economy."
The news followed an announcement in Athens that Vassilis Rapanos, the man appointed to be finance minister in the new coalition government, had quit without formally taking up his office, while the prime minister Antonis Samaras was not fit enough to travel to the Brussels summit after an eye operation.
THE TELEGRAPH
Debt crisis: Moody's downgrades 28 Spanish banks
By Louise Armitstead and Szu Ping Chan
All of Spain’s major banks were hit with cuts of one to four notches – worse than expected and sending several deeper into junk status.
The move followed Moody’s decision this month to slash the sovereign rating from A3 to Baa3, but also reflected the mounting risk of real estate losses, the agency said.
Comparing Spain’s property crisis to Ireland’s, where values have fallen almost twice as much, Moody’s said: “The banks’ exposures to commercial real estate will likely cause higher losses, which might increase the likelihood that these banks will require external support.”
Rival rating agency Standard & Poor's said this month that house prices in Spain could fall another 25pc before the market levels out.
Bankia, which is already due to receive €23.5bn in state aid, was downgraded to junk by Moody's, while Banco Bilbao Vizcaya Argentaria (BBVA), Spain's second largest bank, was cut by three notches to just above junk.
DAILY EXPRESS
New Look wins £1bn debt pact
By Andrew Johnson
New Look yesterday gained valuable time to push through a crucial turnaround programme after striking a deal with lenders to restructure its debt.
The fashion retailer, mostly owned by private equity giants Permira and Apax, now has until 2015, rather than next year, before it must start repaying £1.1billion of borrowings.
Although it said a revamp launched by executive chairman Alistair McGeorge, who joined a year ago, was starting to bear fruit, there was still much to do.
Underlying profits fell 23 per cent to £147million for the year to March.
Group revenue fell 2 per cent to £1.5billion. At stores open for more than a year it dropped 5.9 per cent.
THE INDEPENDENT
One in five UK families admit they are 'living on the edge'
By Simon Read
UK families are facing an uncertain financial future with one in five admitting they are living on edge.
Frightening research published today shows that 20 per cent of families are struggling to cope financially while another two-fifths are “just getting by”.
The survey by think tank Centre for the Modern Family shows people are being battered by increased living costs and falling wages.
They’ve also been whacked, by the climbing cost of childcare and the continuing harsh economic climate, as well as many being hit by the Coalition’s cutbacks.
Welsh families have been hardest hit by financial woes with 57 per cent saying it is their biggest challenge compared to a national average of 45 per cent.
Meanwhile young families are being forced to resort to desperate measures. Eighteen-to-32 year olds with children are twice as likely to have turned to payday loans and 50 per cent more likely to have begun flogging their possessions online than average.
THE TIMES
Xstrata chief should go to save merger, says investor
By Miles Costello
One of the City’s most powerful fund managers has effectively called on Mick Davis to step down as chief executive of Xstrata as the price of a successful merger with Glencore.
David Cumming, the head of UK equities at Standard Life Investments, said that shareholder hostility to retention payments for senior Xstrata managers, including a £29 million handout to Mr Davis, meant that the merger was now “in jeopardy”.
He said that investors would not be able to support a series of retention deals worth £217 million, with no performance conditions attached. As a result, the credibility of Mr Davis is “probably irretrievably shot”, he said.
The departure of Mr Davis, who has been at Xstrata for more than a decade, would mark by far the most sensational scalp of the shareholder spring.
THE SCOTSMAN
A more entrepreneurial Scotland ‘is hampered by lack of ambition’
By Scott Reid
Scotland needs to raise its game when it comes to entrepreneurship, the country’s highest-profile businessman said yesterday, despite news of a jump in the number of people looking to become self-employed.
Sir Tom Hunter claimed a “lack of ambition” was undermining the nation’s success on the world stage and warned that standing still could prove costly.
His remarks came as research revealed the number of Scots expecting to start their own business in the next three years was significantly higher last year than in 2010.
The latest Global Entrepreneurship Monitor (GEM) found that the proportion of working age individuals on the brink of going it alone had leapt from 6 per cent to almost 10 per cent.
The report noted that a “long slow decline” in early-stage entrepreneurial activity had been arrested in 2011.
DAILY EXPRESS
Oil prices sliding on fears over Eurozone debt crisis
By Andrew Johnson
Oil prices are poised to suffer their biggest quarterly fall in four years amid deepening gloom over the eurozone debt crisis and slowing global growth.
Brent crude dipped below $90 a barrel yesterday to close in on 18-month lows on fears sluggish economic output worldwide will hit demand and hopes Europe will finally get a grip on its problems dented by the continued resistance of German to reform. US and Chinese economic data has also been weak. Oil prices were above $120 a barrel at the end of March.
