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China Economy: GDP Accelerates At End Of 2012

Written By Unknown on Minggu, 20 Januari 2013 | 00.02

China's economic growth has accelerated for the first time in two years, according to figures released by the country's government.

However, the 7.9% gross domestic product (GDP) rise in the fourth quarter (Q4) of 2012 masks a broader slowdown.

The year-long GDP figure - an expansion of 7.8% - represents the worst performance in 13 years.

The Q4 figure, released by the National Bureau of Statistics in Beijing, does suggest an encouraging turnaround for the world's second largest economy.

Retail sales in China were up 14. 3% and industrial output was up 10%, according to the government figures.

Fixed asset investment - a key indicator on infrastructure spending - was up 20.6% in 2012. A staggering £3.63trn was spent on infrastructure projects through 2012.

For the past two years, China's economy has been showing signs of a slowdown.

The Q4 turnaround is likely to gather pace for at least the next two quarters as the investment in infrastructure is rolled out. This will benefit the incoming Chinese leadership who take office in March.

However, the longer term direction of the Chinese economy is uncertain. The infrastructure stimulus will fade and when it does, a slowdown could return.

Analysis of the figures by economists will provide further detail on the accuracy of the data, as there is often mistrust of the Chinese government and its willingness to reveal accurate economic statistics.

The broader forecast for China is uncertain. Beijing is contending with a complicated conundrum. As it develops, it needs to move away from a legacy of producing cheap, low quality products.

The desire is to become a nation producing higher end goods and top-end technology.

To an extent, they already are. Huawei and Lenovo are two of the world's largest electronics firms and Chinese cars are selling very well in emerging markets, taking 10% of 2012 Chile cars sales.

But completing that transformation will take time and the chances of a dip in the interim are significant.

Added to that is fact that foreign investors who have traditionally made all their goods in China are now turning to cheaper labour markets in South-East Asia.

As China has boomed, wages have gone up and big investors have moved south to Vietnam, Cambodia and Thailand, and west to India.

China has become the world's second largest economy by making everything for everyone and at the lowest price.

To continue its trajectory it now needs to take advantage of its own increasingly wealthy population and persuade them to buy more.


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Retail Sales: Disappointing Figures In December

Retail Crisis: Three Key Questions

Updated: 11:37am UK, Friday 18 January 2013

By Poppy Trowbridge, Business & Economics Correspondent

The joke in the office these days is: if you see Poppy coming, watch out – there's a company somewhere in sight that's about to call in the administrators.

Trouble is, since I joined Sky in late November – four major high street retailers have collapsed and subsequently had to call in the accountants.

In late December 2012, Comet, the consumer electricals chain, hit the wall, resulting in more than 6,000 job losses.

This year, Jessops, the camera retailer was the first major casualty. Pressure from online competition and a boom in camera phones in recent years has hurt demand for the more conventional cameras they sell.

Then, in mid-January, HMV, warned it was about to end nearly a century on the high street as it appointed Deloitte as administrators.

A day later, I was in Watford, standing outside an outlet of the DVD and film rental company Blockbuster. They too had just told staff they were handing the business over to the accountants.

You can see why catching sight of me, might send someone running. But those that don't make a dash for it, are asking me three crucial questions:

Why are so many high street retailers going bust right now?

Who's next?

What will be left of the high street in the future?

The first question is easy to answer. January is a time when retailers are low on stock just after the Christmas period, and a time when (in theory) they have the most cash in the till – again, coming off the back of holiday buying.

Also, with the busiest shopping period of the year just gone, they're in a position to judge how well they have, or haven't, performed and whether they'll make it through another year.

This is when owners, managers, bankers, creditors, and backers decide if they'll continue on, or call it quits. With the economy still struggling – the latter is becoming more of a necessity.

Who's next?! Who can say for sure? But the shops that have collapsed have some common features.

They are often specialist shops. Think of Jessops and its almost exclusive focus on camera equipment, or Clinton Cards which went into administration in May 2012.

Many pay high rents to have multiple spaces on the high street and sadly, many of the companies have been slow to adopt modernised methods of online selling.

Which brings us nicely to the final question: What will the high street of the future look like?

The reality is it's evolving right before our eyes.

Most of us carry a portal to every shop we could ever want in our pockets or handbags. Mobile and online retailing is a trend that's only likely to expand.

But take heart, that may simply mean that we won't have to carry as many bags home on the bus, as retailers ship our purchases directly to our homes.

With all this in mind, I'm convinced high streets are nowhere near disappearing. They may look a little different in five years time, but the high street will always be there for what I like best: window-shopping.


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US Mobile Group Rings Up Deal For UK Rival

By Mark Kleinman, City Editor

One of Britain's biggest mobile phone distributors is in advanced talks to be swallowed up by a giant American rival in a deal worth about £200m, Sky News has learnt.

20:20 Mobile Group, which is owned by a consortium of shareholders including the taxpayer-backed Royal Bank of Scotland (RBS), is close to being sold to Brightstar Corporation, which calls itself the largest specialised distributor of wireless products in the world.

The private equity firm Doughty Hanson, which is the biggest shareholder in 20:20, took control of the company in 2006 after buying it from John Caudwell, the billionaire founder of the Phones 4U high street retail chain, for close to £350m.

Investment bankers at Lazard are advising the board of 20:20 on the sale discussions, which are understood to have been underway for several months. The takeover by Brightstar is expected to be announced within weeks.

Brightstar is headed by Marcelo Claure, who founded the company in 1997 and has grown it from being a small Miami-based distributor into a global player which ranks as the 70th-largest private company in the US, according to Forbes magazine.

Until its sale by Mr Caudwell, 20:20 was the sister company to Phones 4U, which was itself sold to Providence Equity Partners, another private equity firm. Providence sold the high street chain to BC Partners, another financial investor, two years ago.

20:20, which is based in Crewe, Lancashire, distributes mobile phone products and provides outsourcing services to the mobile telelcoms industry. It employs more than 1200 people in 14 countries, including Hong Kong, Spain and the United Arab Emirates.

Like many private equity investments made at the peak of the buyout boom between 2005 and 2007, the owners of 20:20 have been forced to restructure the company's finances.

In 2008, RBS and Mizuho agreed to swap £175m of debt for equity in 20:20 as part of a deal that also saw Doughty Hanson inject £15m of additional equity.


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Silentnight Owner Awakens Interest In Dreams

By Mark Kleinman, City Editor

The firm behind Silentnight, the beds manufacturer, is among a pack of predators circling Dreams, the retail chain which has been put up for sale in an effort to secure its future.

I understand that HIG Europe, which acquired Silentnight in a controversial deal in 2011, is examining an offer for Dreams, for which its lenders are courting takeover offers.

HIG's interest in Dreams has emerged three months after Silentnight stopped supplying the beds retailer after the two companies were unable to agree terms. Its takeover of Silentnight was contentious because of the way the deal treated the bed-maker's pension  obligations.

HIG has not yet decided whether to pursue a formal bid for Dreams, which is saddled by substantial debts and could risk becoming the latest casualty of the deteriorating high street environment unless a sale is agreed in the coming months.

Ernst & Young, the accountancy firm that is overseeing an auction of Dreams, has asked for prospective buyers to submit offers by February 8. It wants to get a deal tied up by the middle of March, shortly before an extension to the waiver of Dreams' borrowing terms with lenders led by Royal Bank of Scotland expires.

Steinhoff International, the South African owner of Harveys and Bensons for Beds, is also examining an offer for Dreams, although analysts believe it is likely to face objections on competition grounds to a full takeover, and so may limit its interest to approximately 50 of Dreams' 270 stores.

A number of private equity firms, including Electra Partners and Endless, a specialist investor in distressed retailers. are also poring over Dreams' financial information with a view to making offers. Sun Capital, the owner of SCS Upholstery, the sofa retailer, is another potential bidder, as is Apollo Management, the American private equity firm which recently acquired Aurum Holdings, the group behind Mappin & Webb and Goldsmiths.

The most prominent participant in the sale process is, however, likely to be Mike Clare, Dreams' founder, who is lining up backing from one or more financiers to support a bid to buy the company back. Mr Clare sold Dreams to Exponent, an investment firm, in 2008 for £220m.

Some people close to the situation believe that any buyer of Dreams is likely to put the company through a form of bankruptcy procedure known as a pre-pack administration, although it is unclear whether that will take place.

Despite its indebted financial position, Dreams has actually been performing robustly in recent months, with like-for-like sales during the pre-Christmas and new year trading period up more than 7%.

Dreams employs more than 2,000 people, and any outcome that resulted in significant numbers of shop closures could increase the jobs bloodbath in the retail sector.

More than 9,000 jobs have been put at risk in the last week alone with the collapses of Blockbuster, HMV and Jessops, the camera retailer.

Dreams and HIG declined to comment on Friday.


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Stansted Airport Is Sold For £1.5bn

The company formerly known as BAA is to sell Stansted airport to the Manchester Airports Group for £1.5bn.

The deal will mean that BAA - now known as Heathrow Airport Holdings - will be responsible for just four UK airports compared with its original seven.

The remaining ones are Heathrow, Southampton, Aberdeen and Glasgow.

Colin Matthews, chief executive of Heathrow, said: "Stansted Airport and its people have been part of our company for a long time.

"It has been named by passengers as 'the world's best airport for low-cost airlines' for two consecutive years at the Skytrax World Airport Awards, and we are proud of its achievements.

"We wish the new owners every success and are confident the airport will continue to flourish.

"We will continue to focus on improving Heathrow, Glasgow, Aberdeen and Southampton airports."

Heathrow Airport Holdings has been forced to sell the airport after a ruling by the Competition Commission last year.

The company did not challenge the decision in the Supreme Court but maintained that the ruling "fails to recognise that Stansted and Heathrow serve different markets".

The sale of Britain's third busiest airport is expected to close by the end of February

Manchester Airports Group owns and operates Manchester, East Midlands and Bournemouth airports.

It had been one of the bidders for Gatwick when BAA put it up for sale but it lost out to American private equity group Global Infrastructure Partners which now also runs Edinburgh.


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Snow Costs UK Economy '£500m A Day'

Friday's heavy snow could cost the UK economy almost £500m, according to new research by insurance group RSA.

The bad weather continues to engulf the UK, with up to 30cm - or a foot - of snow expected in south Wales.

RSA based its findings on the economic impact of the severe weather conditions in December 2010.

At the time, the Office for National Statistics estimated the snow caused the UK economy to contract by 0.5% in the fourth quarter.

Jon Sellors, RSA's head of research, told Sky News the ongoing weather conditions had impacted businesses, schools and the transport system.

"We estimate that up to a third of the UK's workforce have been unable to get into work, which would cost the economy up to £473m.

"And if the bad weather continues, the economic cost is only going to get higher."

Vehicles struggle in the snow Vehicles struggle in the snow on the normally busy A367 near Bath

Ross Walker, UK economist at RBS, said there was an "obvious risk" snow would hit growth in the UK.

"This weather comes at a bad time - when the economy is growing at a 1% annual rate, it doesn't take much in any individual quarter to push it backwards," he told Sky News.

But he stressed it is important not to overstate impact of bad weather: "If you get a negative GDP figure because of weather then that is a one-off - it does not represent an underlying economic problem."

It comes amid fears that Britain's economy shrank in the final quarter of the year - with official figures due next Friday.

The industries most likely to be affected by bad weather are construction and retail, Mr Walker added.

At the end of 2010 - when heavy snow fell in some areas of the UK for weeks - construction was down by 3.3%.

"Construction is obviously vulnerable to bad weather, and retail could also get hit," he said.

"Although if it snows so heavily that you don't go and buy a pair of shoes you want, you will probably go and get them when the weather improves."

BRITAIN-WEATHER-SNOW Commuters walk through the snow on Jubilee bridge in central London

But Douglas McWilliams, chief executive of the Centre for Economic and Business Research, said the snow could hit some businesses hard. 

"The economy isn't in great shape, and the retail sector isn't in great shape," he told Sky News.

"So even if in aggregate retailers don't lose out over a two or three month period, cash is king.

"If you lose a day's takings it may be the straw that breaks the camel's back."

The bad weather comes at a testing time for Britain's high streets, following a tough Christmas period.

Official retail figures were worse than expected, showing a 0.3% fall in total sales in December compared with the month before.

Since the start of 2013 three big names – Jessops, HMV and Blockbuster – have already been forced to call in the administrators.


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Boeing Dreamliner Deliveries Halted

Boeing 787 Dreamliner Timeline

Updated: 1:50am UK, Saturday 19 January 2013

The turbulent history of the Boeing 787 Dreamliner:

Jan 19, 2013: Boeing says it is stopping deliveries of the Dreamliner to airlines.

Jan 18, 2013: US Federal Aviation Administration (FAA) officials arrive in Japan to examine a 787 and its melted battery pack after an All Nippon Air (ANA) emergency landing two days earlier

Jan 17, 2013: The European Aviation Safety Agency,  FAA and Qatar Airways ground Dreamliners under their regulatory control

Jan 16, 2013: Japan Air Lines Co Ltd (JAL) follows suit and suspends Dreamliner flights from Japan over safety concerns

Jan 16, 2013: ANA grounds all 17 of its 787s after four of its aircraft suffer problems

Jan 16, 2013: ANA 787 Dreamliner makes emergency landing in Takamatsu, Japan, after smoke appears in cabin

Jan 11, 2013: The Federal Aviation Authority announces a review of the 787 design and systems

Jan 11, 2013: ANA discovers engine oil leak after a domestic flight lands at Miyazaki

Jan 11, 2013: A separate ANA flight to Matsuyama reported a crack appearing in the pilot's window

Jan 9, 2013: ANA cancels a Boeing 787 Dreamliner flight due to a brake problem

Jan 8, 2013: Japan Air Lines (JAL) grounds a jet at Boston Logan International Airport after a 787 leaks 150 litres of fuel

Jan 7, 2013: A fire erupts in a battery pack in another JAL Dreamliner at Boston

Dec 13, 2012: Qatar Airways grounds one of its Dreamliners because of a faulty generator

Dec 5, 2012: The FAA orders inspections of all 787 Dreamliners in service in the US

Dec 4, 2012: A United Airlines 787 is forced to make an emergency landing in New Orleans after a generator fails

July 23, 2012: ANA grounds five Dreamliners due to an engine component issue

Feb 22, 2012: Boeing says around 55 Dreamliners may be affected by a flaw in the fuselage

Oct 26, 2011: The Dreamliner makes its maiden flight with paying passengers on board an ANA jet

Sep 26, 2011: Boeing delivers its first 787 Dreamliner to Japan's ANA, three years late

Jun 23, 2010: Boeing postpones the first flight of the Dreamliner because of a structural flaw

Dec 15, 2009: The passenger jet 787 Dreamliner takes off on its maiden test flight

Apr 9, 2008: Boeing says there will be a revised plan for the first 787 flight and initial deliveries

Dec 11, 2008: Boeing announces further delays due to strike action by machinists Sept-Nov

Oct 19, 2007: Boeing says there will be a six-month delay to deliveries due to assembly issues

Jul 8, 2007: The first assembled 787 goes on display to media, employees and customers

Jul 18, 2006: Boeing says it is making "solid progress" on the 787 Dreamliner programme

Jan 28, 2005: Boeing gives its new commercial airplane an official model designation number - 787

Jan 29, 2003: Boeing announces the launch of a new aircraft called the 7E7


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Horse Abattoir Film Reveals Welfare Breaches

By Jason Farrell, Sky Correspondent

Sky News has uncovered shocking animal welfare conditions at a UK horse abattoir.

They include animals being beaten, neglected and illegal procedures in the process of slaughtering British horses destined for European food markets.

It comes amid public anger that some of our biggest supermarkets have been selling beef burgers and other products that contained horse meat.

Sky News visited the Red Lion Abattoir near Nantwich in Cheshire after concerns were raised by Animal Welfare Group Hillside Animal Sanctuary.

Investigators at Hillside fitted secret cameras which filmed horses being beaten with an iron rod to encourage them into the pens. 

Some were then crammed into the slaughter pens in pairs and, on one occasion, a group of three, before being stunned together.

Red Lion Abattoir The video revealed horses hit with sticks to goad them into slaughter pens

In harrowing images the horses fall on top of each other. Under The Welfare of  Animals Act 1995, horses should not be slaughtered in sight of one another because of the distress it causes.

Furthermore, Sky News found that sick or injured horses were left untended overnight rather than put down immediately.

As a result of the investigation, two slaughter men have had their licences revoked.

Craig Kirby, head of approvals and veterinary advice at the Food Standards Agency (FSA) told Sky News: "As soon as we got the footage and reviewed it we took immediate action to revoke the slaughter men's licences.

"That means they cannot work to slaughter animals again. We will also look to gather further evidence to see if we can prosecute."

Former government chief veterinary officer Keith Meldrum, who viewed the footage, said he was shocked by what he described as "appalling" welfare breaches.

"We see three animals stunned at the same time and it is totally illegal and contrary to welfare slaughter regulations," he said.

"It's a significant welfare problem for a number of reasons. It's harder to render them unconscious in a group and they have a higher chance of regaining consciousness before you've completed the procedure."

Another incident filmed included a horse that appeared to come round from the stun while being hung upside down before being bled. Mr Meldrum described it as "totally and completely unacceptable".

Red Lion Abattoir Some 8,426 horses were slaughtered in the UK in 2012

FSA statistics released to Sky News show a dramatic increase in the number of UK horses slaughtered every year, from 3,859 in 2007 to 8,426 in 2012.

Depending on the size and breed they are bought for anything between £100 to £300 and can fetch around 700 euro on the European meat markets.

The animals come from a variety of backgrounds. Some are former pets, others come from show jumping or the race track.

A report last year from the British Horseracing Authority (BHA) found: "The number of thoroughbreds reported dead to the Horse Passport Issuing Authority rose by 580 - an increase of 29% - from 1994 to 2574 horses.

"Of these, 1127 horses either in training, breeding or out of training were reported as killed in abattoirs - and reported to the Government Meat Hygiene Service - from 499 horses in 2010, an increase of 126%."

However, in a statement to Sky News, the BHA added: "This is a wider equine issue and not an issue for the British racing industry, which is one of the country's most highly regulated equine pursuits.

"However, if there are allegations that any horse, whether thoroughbred or not, is being inhumanely treated in an abattoir we would fully support any investigation and subsequent action, if appropriate."

During the investigation, Hillside Animal Sanctuary rescued one racehorse called Underwriter by bidding against the abattoir at auction. They discovered it had a distinguished career.

John Watson, from Hillside, said: "It's not just ill and old horses being killed. There are very many fit and healthy horses, horses with foals, pregnant mares, and thoroughbreds that are being treated badly.

Red Lion Abattoir Red Lion Abattoir said they had revoked the license of two slaughtermen

"It blows away the myth of humane slaughter, and there is a misery in that place that is palpable."

Hillside's lead investigator, who did not want to be identified, added: "What we've found has shocked us deeply; animals left with horrendous injuries and horses shot on top of each other.

"In all the years I've been doing this work, without doubt it's the most harrowing experience I've come across. All the horses in there had their heads hung down."

The Red Lion Abattoir told us it views animal welfare and public health with paramount importance.

In a statement it said: "In attendance at the The Red Lion Abattoir are three full time Food Standards Officers comprising of an official veterinarian and full-time meat hygiene inspectors throughout production."

It said the incidents were "not the norm, but of an isolated nature" and they have taken disciplinary action against the individual featured.

The statement continued: "I agree horses should individually enter the stunning area and most certainly not three at a time.

"However, small horses and ponies having spent years together as companions are difficult to separate. Horse lovers would understand that.

"My opinion and that of other veterinarians is it is better to keep those types together to reduce the stress, providing swift dispatch is achieved."

The Red Lion Abattoir also insisted it meat was not part of the recent supermarket burger scandal.

The horses there are destined to be served in European food markets. The scandal this time is the way they are treated, in the last moments of their lives, in a licenced British abattoir. 

Roly Owers, chief executive of World Horse Welfare, viewed the footage and said: "The breaches, from what we've seen, are throughout; from the care of the animals to the slaughter process.

"Horses are intelligent animals. When they see an animal stunned in front of them you can only imagine the distress that animal is going through. There are, without doubt, welfare issues here and it is plain illegal."

The RSPCA said "The footage is shocking and upsetting to watch."  They have requested a full copy of the film with a view to investigating.


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Blockbuster Shuts 129 Shops And Slashes Staff

The collapsed DVD and games rental firm Blockbuster is to close 129 of its 528 shops and axe 760 workers in the coming weeks.

Some 31 branches have already been put on notice of closure, according to the company's administrators Deloitte.

The move means the chain is already planning to close a quarter of its branches and make 18% of its workforce redundant.

It was announced just days after the chain went into administration in a run of bad news for the British high street.

There will be fears that this is just the first step in taking apart a company that employs more than 4,000 people in the UK.

Lee Manning, of administrator Deloitte, said: "Having reviewed the portfolio with management, the store closure plan is an inevitable consequence of having to restructure the company to a profitable core which is capable of being sold.

"We would like to thank the company's employees for their support and professionalism during this difficult time. We are also grateful to the customers for their continued support."

An employee helpline and an "employee assistance programme" have been set up to help staff find other jobs.

The firm's trading woes were blamed on competition from internet firms and digital streaming of movies and games.

Blockbuster had struggled to adapt to the changing market and rivalry from internet retailers including Netflix, Amazon's LoveFilm and iTunes, which now offers a movie rental service.

Its collapse came after its own plans to break into film-streaming appeared to stall in recent months.

It follows the demise of camera chain Jessops and electricals group Comet, which also blamed competition from online players for their downfall.

Just a day before Blockbuster went into administration, the music and entertainment chain HMV went under following dismal Christmas sales.


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Investment Bank Chief To Quit RBS In Shake-Up

By Mark Kleinman, City Editor

Royal Bank of Scotland (RBS) is to embark on a further restructuring of its investment banking arm in a move that will pave the way for the departure of the unit's chief executive.

I have learned that RBS executives are at an advanced stage of preparations for splitting its markets and international banking arm (M&IB), which employs more than 16,000 people around the world, into two separate divisions.

The split, which could be announced within days, would mean that the heads of the two divisions will now report directly to Stephen Hester, RBS's chief executive.

Alongside news of the restructuring, and assuming that the plans are approved by RBS's board, it will also announce that John Hourican, chief executive of the M&IB business, is to leave the bank.

Mr Hourican's departure will end more than four years in the role, in which he has overseen one of the most radical restructurings of an investment bank ever attempted.

Formerly the chief financial officer of ABN Amro, the Dutch bank which RBS bought as part of a consortium in a spectacularly ill-fated deal in 2007, Mr Hourican has engineered a vast reduction in the level of risk-weighted assets on RBS's balance sheet.

Earlier this month, it was reported that Mr Hourican would leave RBS to satisfy demands from regulators for senior scalps as part of the taxpayer-backed lender's settlement with UK and US authorities over the manipulation of Libor, the interbank borrowing rate.

A settlement could be announced next week, although it is more likely to be confirmed at the end of January, City sources said.

RBS insiders have acknowledged that Mr Hourican was unaware of any wrongdoing by the bank's employees in relation to its role in setting benchmark interest rates, but said the division of M&IB into two units meant that the bulk of his work had now been completed.

Shares awarded to Mr Hourican in previous years are likely to vest on his departure from the bank, although he would not receive a payoff other than his contractual entitlement.

Mr Hester is understood to have given Mr Hourican his backing in recent weeks and is said to be keen that the latter's departure is not connected to any Libor-related wrongdoing by RBS staff.

Speculation suggested that Peter Nielsen, head of RBS's markets business within M&IB, would also be asked to resign by the bank's board.

I understand, however, that Mr Nielsen's departure has not been agreed either internally or with regulators, and that he may not leave in the near future.

RBS's investment bank was given the M&IB name after a previous restructuring that involved the sale or closure of the parts of its operations which advised on areas such as mergers and acquisitions activity.

Previously called global banking and markets (GBM), it has been reduced in size to the extent that the investment bank now accounts for approximately 20% of RBS's risk-weighted assets, which provide one measure of the risk on a bank's balance sheet, compared to about 60% five years ago. The number of people working in the division has also come down from about 26,000 to roughly 16,000.

RBS will need to undertake a further year of wider balance sheet restructuring before it can begin to resemble what directors have called "a normal bank".

The future of RBS's investment banking business has become increasingly contentious in recent months as British banks come under pressure to raise the level of their protective capital buffers.

The Financial Services Authority wrote to Mr Hester last autumn to suggest that the M&IB business could be scaled back much further, and that view is understood to have the support of some board directors.

Although it is the most controversial area of RBS's business and the banking sector in general,  the investment bank has yielded more than £10bn of profit since RBS was rescued by British taxpayers in 2008.

After Mr Hourican's departure, the terms of which are not yet finalised, the two M&IB units are likely to be run by John Owen, who heads international banking, and either Mr Nielsen or Suneel Kamlani, Mr Hourican's deputy.


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