Sony Back In Profit After Record Loss

By Niall Paterson, Technology and Media Correspondent

Sony has reported an annual profit for the first time in five years.

The electronics and entertainment company made a net profit of 43bn yen (£280m) in the year to the end of March 2013, compared to losses of 457bn yen (£2.9bn) in the previous twelve months.

Sony said that a weakened yen, asset sales, and healthy results by its movie department had helped reverse its fortunes.

Once dominant in consumer electronics, increased competition and narrower margins have seen Sony struggle of late - most notably its TV business, which has been making losses for close to a decade.

The movie unit reported a 40% increase in its operating profit, earning $509m (£326.7m) thanks in part to big box office draws like The Amazing Spider-Man and Skyfall.

The PS4 was announced in February

Sony Music also showed a slight increase, up 0.9% to $396m (£254m).

But the gaming side of Sony suffered yet another terrible year, a 94% drop in its operating profits to just $18m (£11.5m). The company blamed falling hardware sales.

It is difficult to gauge exactly how much of an effect the weakened yen has had but with the Japanese currency dropping 20% against the dollar since November 2012, Sony's products are cheaper and thus more attractive to foreign buyers. It also inflates the value of Sony's foreign income.

However, nearly $2.5bn (£1.6bn) was raised through the sale of key assets including its American HQ in New York, shares, and the Sony City Osaki building in Tokyo.

Analysts suggest this means the profit reported gives a misleading account of the state of the business.

Sony expects its recovery to continue, projecting a 50bn yen (£325m) profit for the year ending March 2014, a 16% increase.

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ENRC Mining Crisis Deepens As Brokers Quit

By Mark Kleinman, City Editor

The crisis engulfing the FTSE-100 mining company ENRC has deepened with the resignation of its two blue-chip brokers.

I have learnt that Deutsche Bank and Morgan Stanley, two of the banks which have advised ENRC since it arrived on the London market in 2007, have both quit in recent days. They are understood to have made tens of millions of pounds in fees from the flotation.

Their departure follows confirmation that the Serious Fraud Office has launched a criminal probe into allegations of corruption at the company.

In recent months a bitter boardroom battle has erupted at ENRC, which is part-owned by the Kazakh government and three oligarchs who control 44% of the shares. The chairman, Mehmet Dalman, and several other directors have quit in protest at the handling of the alleged wrongdoing.

The oligarchs and the government are now considering an offer for the outstanding shares, which have lost most of their value since the 2007 listing, sparking anger from City shareholders.

The row has reignited the debate over listing standards in London and the merits of the City's status as a capital-raising hub for emerging markets-based tycoons.

ENRC's board is interviewing potential replacements for Deutsche and Morgan Stanley although no Wall Street banks are likely to be involved because of the SFO's inquiry.

Morgan Stanley declined to comment.

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No Bank Of England Stimulus For UK Economy

Signs of stronger growth in the UK economy seem to have stopped the Bank of England introducing fresh stimulus.

The monetary policy committee (MPC) stopped short of adding to its £375bn programme of quantitative easing (QE) since it emerged that the UK had avoided a triple-dip recession in the first quarter of 2013, achieving better than expected GDP growth of 0.3%.

As was also expected, the MPC kept the base rate of interest at its historic low of 0.5% - the level it has been at since March 2009.

Encouraging signs of a pick up in economic growth in the second quarter are likely to have tipped the balance at this month's meeting after outgoing bank governor Sir Mervyn King joined two other policymakers last month in supporting more stimulus.

That vote took place before it was known that the UK had escaped a new recession.

The results of today's voting, out later this month, will show if the 'QE 3' continued to back another £25bn in stimulus - despite that economic growth - or fell more in to line with the other six policymakers who had previously raised fears about weakening sterling further and stoking inflation.

The rate-setters might have also wished to wait and see the impact of the Bank's newly beefed-up Funding for Lending scheme, now focused on helping small and medium businesses to borrow much-needed working capital.

However, despite the more positive signs, some economists believe persistent weakness - coupled with the risk that the eurozone crisis could snuff out any nascent recovery - mean the Bank will have to resume QE - though possibly not until after the arrival of new governor Mark Carney in July.

More follows...

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Easter Timing And Cold Hit Retailers In April

The cold weather and the timing of Easter hit retail sales across the board last month - falling at their fastest rate for a year.

The British Retail Consortium (BRC) said retail sales values were down 2.2% on a like-for-like basis from April 2012.

On a total basis, sales were down 0.6%, against a 1.0% decline in April 2012.

However the BRC said the figures masked a respectable month as the late spring sunshine boosted sales of summer wear including sandals, shorts and skin care products.

The 3-month total growth average, which irons out the Easter distortions, was 2.6%.

Online sales were up 8.3% compared with April 2012.

Retailers with strong online offerings have been largely outperforming competitors amid the squeeze on living standards which has restricted spending on the high street.

For three years now prices have been rising faster than pay.

In its latest results statement on Wednesday, the fashion chain Next predicted the squeeze would continue "for at least the next 18 months, if not longer."

Sales across its 500 UK stores suffered during the March cold snap but 8.9% growth in its Next Directory business helped it post a rise of 2.2% in sales in its first quarter.

The company said the return of warmer weather in mid-April sparked a marked upturn in sales.

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Sainsbury's Annual Profits Fall 1.4% To £788m

The boss of Sainsbury's has told Sky News he has a "few more years" in him at the helm of the supermarket chain despite the appointment of headhunters tasked with identifying his successor.

Justin King was speaking after Sainsbury's confirmed a slight fall in annual profits, amid the intense battle among supermarkets to grow market share and invest in online.

It made a pre-tax profit of £788m in the year to March 16 - down 1.4% on the previous 12 months because of property disposals though underlying profits were up 6.2%.

Mr King also confirmed the weekend report by Sky's City Editor Mark Kleinman that it had struck an agreement with Lloyds Banking Group to take full control of Sainsbury's Bank, at a cost to the chain of £248m.

Sainsbury's said its move to acquire the 50% shareholding it did not own was an opportunity to "enhance loyalty by offering accessible, high quality and tailored products which reward customers who bank and shop with us."

Sainsbury's has been investing in its supply chain

Growth online and in convenience stores drove market share gains for the supermarket business by 0.2% over the period according to the Kantar Worldpanel measure.

Total sales over the year rose 4.6% to £25.6bn - boosted by what it called the "milestone" of non-food sales reaching £1bn for the first time.

Grocery online sales were nearing the £1bn mark, Sainsbury's said, while convenience stores took £1.5bn.

During the year, it opened 14 new supermarkets, eight extensions and 87 convenience stores.

The full-year dividend was increased 3.7% to 16.7p.

Mr King, who took over at the supermarket amid sliding sales nearly a decade ago, remained bullish about its prospects despite the flat-lining economy.

He said: "Whilst we see no near-term change in the current economic situation, we remain confident that by continuing to invest in our long-standing strategy and by understanding and helping our customers, we are well positioned for future growth."

In his interview with Sky News he moved to quell speculation about his future, adding: "I've got plenty of headroom left yet and I consider myself still to be a relatively young man so I've got a few more years in Sainsbury's left in me yet."

Sky News revealed last month that Egon Zehnder, the search firm, had been appointed by David Tyler, Sainsbury's chairman, to identify Mr King's successor.

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Queen's Speech: Immigration Curbs Dominate

New measures to tackle immigration were among the Government's priorities outlined in this year's Queen's Speech.

In its legislative programme for the year ahead, the coalition also set out plans to cap bills for social care, introduce a flat-rate pension, cut the regulation burden on small businesses and extend consumer rights.

At the heart of the Government's agenda, a new Immigration Bill was unveiled to regulate migrant access to the NHS as well as introduce stiffer fines on businesses which exploit illegal labour.

Foreign criminals and illegal immigrants also face a crackdown with a new bill making it easier to deport them - including powers to prevent the abuse of human rights laws.

The Queen told MPs and peers that the bill will aim to "ensure that this country attracts people who will contribute and deter those who will not".

Meanwhile, a £72,000 cap will be introduced from 2016 on the amount people in England have to pay for social care, to end a situation where pensioners have to sell their homes to pay for care in their final years.

And millions of people caring for elderly and disabled relatives in England will be given the right to receive support from their local councils.

A Pensions Bill will introduce a single-tier pension, worth around £144 a week at today's prices, and will bring forward to 2026 the date at which the retirement age rises to 67.

And consumers are to receive greater protection when using offshore gambling sites with new measures to ensure all operators in the local market hold a UK licence.

Amid all the traditional pomp and ceremony in the House of Lords, Her Majesty made clear that the Government's "first priority" remains restoring Britain's economic health, something which cannot simply be legislated for.

She announced paving legislation for further necessary measures for the £33bn construction of the high-speed rail link between London, Birmingham and the north of England, keeping the controversial project on track. 

Businesses will be assisted through a bill to create a £2,000 annual employment allowance to reduce National Insurance bills for every company and charity.

And a Deregulation Bill will aim to reduce the burden of excessive red tape on business, public bodies and individuals by repealing legislation that is no longer of practical use, and placing a duty on regulators to have regard to the impact of their actions on growth.

Self-employed people whose work activities pose no potential risk of harm to others will be exempted from health and safety law.

The Queen also said the Government would protect the Falkland Islanders' right to self-determination as she opened the new session of Parliament.

Measures to reduce crime and disorder will include tougher controls on dogs which are dangerously out of control, a new "community trigger" to ensure action is taken on persistent anti-social behaviour, larger fines for illegal importation of firearms and making forced marriage a criminal offence.

Meanwhile, there will be new measures to encourage the rehabilitation of prisoners after they leave jail.

Plans to make it easier for victims of asbestos-related cancer to claim compensation were also unveiled.

But the Queen's Speech, which featured 20 bills, including some in draft form or carried over from the previous session, was also notable for what was omitted - such as the so-called snoopers' charter to monitor internet and social media use, opposed by the Liberal Democrats, and any further moves on an EU referendum in the wake of the success of UKIP at last week's local elections.

Sky News Political Editor Adam Boulton said the failure to do any more about the referendum on Britain's membership of the European Union would pile yet more pressure on the Prime Minister to act from his eurosceptic backbenchers.   

There was also no place for mooted health protection measures to introduce plain packaging for cigarettes and minimum unit prices for alcohol - although Health Secretary Jeremy Hunt earlier insisted that no final decision had been made to kill off the proposals.

Mr Hunt told Sky News that no decision over introducing the plans had been made yet, adding: "We don't want to do something that is damaging to industry unless it's going to have those health benefits."

In an introduction to their legislative agenda, Prime David Cameron and Deputy Prime Minister Nick Clegg said the Queen's Speech was "all about backing people who work hard and want to get on in life".

They said: "In May 2010, we came together to govern in the national interest. We knew the road ahead would be tough and so it has proved to be.

"But three years on, our resolve to turn our country around has never been stronger. We know that Britain can be great again because we've got the people to do it. Today's Queen's Speech shows that we will back them every step of the way."

But Labour leader Ed Miliband said: "Today's Queen's Speech should respond to the deep problems the country faces. On the evidence so far, it is not up to the scale of the task."

Unions also attacked the speech. Public and Commercial Services union general secretary Mark Serwotka said: "With its policies causing untold damage to our economy and our communities, it is shameful of the Government to try to stoke up even more fear and suspicion of migrants.

"This is not so much 'dog whistle' politics, more a shrill and desperate cry to satisfy the extremes of the Tory Party."

Unison general secretary Dave Prentis added: "There is little comfort in this programme for the young, the unemployed, the working poor, the sick, the vulnerable or the millions who have seen their living standards fall drastically since this coalition Government came to power."

It was the first time in 17 years that the Prince of Wales attended the State Opening of Parliament, in a move indicating his growing role supporting the Queen in her official duties.

Charles has previously accompanied the Queen to the occasion at the Palace of Westminster 11 times, but not since 1996.

His appearance, together with the Duchess of Cornwall, comes after it was announced that the Queen will miss the Commonwealth summit later this year for the first time in 40 years as part of a review of her long-haul travel.

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TweetDeck: Twitter's UK Firm Shut By Regulator

By Pete Norman, Sky News Online

A British company bought by Twitter for a reported £25m has been shut down by the business regulator after it failed to file its accounts, Sky News has learned.

The official message of TweetDeck's demise

TweetDeck Ltd, which was bought by the California-based social media giant in 2011, was officially struck off the register by Companies House this morning.

The action comes after the wholly-owned British subsidiaries, TweetDeck and Twitter UK Ltd, failed to file accounts for 2011.

The account deadline was last September and both companies were subsequently penalised.

Although Twitter UK later filed its 2011 accounts, TweetDeck did not and the Cardiff-based Companies House moved to strike off the company in January, as first revealed by Sky News.

A notice confirming the action has now been published in the London Gazette, which is the Government's official journal of record, saying TweetDeck has been "dissolved".

A Companies House spokesman told Sky News: "We go through a strict compliance process to try and ensure companies file documentation in a timely manner.

"Unfortunately, in a small number of cases, matters proceeded to strike off, as in this case."

Twitter CEO Dick Costolo (l) and Alex Macgillivray

TweetDeck is used by so-called social media power users to integrate their online messaging activity.

Its functionality has now been incorporated within Twitter's main corporate structure, according to the San Francisco-based firm.

A Twitter spokesperson told Sky News: "TweetDeck the product continues to thrive as part of Twitter, but the old TweetDeck company has been dormant for some time, with no outstanding liabilities; hence our agreement with the move to dissolve it."

TweetDeck was controlled by two American directors, Twitter Inc CEO Dick Costolo and its general counsel Alex Macgillivray.

According to the business regulator, of the three million companies registered in the UK, 99.1% maintain up to date account filings.

Dissolution of dormant companies is normally initiated by the directors rather than it being imposed by the regulator.

In March an unnamed entity investigated TweetDeck but later halted action

The Companies House spokesman told Sky News: "It is incumbent on all directors to ensure documentation is submitted appropriately and it is always disappointing when this is not the case.

"As well as being a legal requirement, those wishing to research and invest use the register as an information source, and for this reason it is unhelpful if business records are not up to date and in good order."

TweetDeck was founded by Sheffield-educated computer programmer Iain Dodsworth in 2008 and sold to Twitter two years ago in what was widely reported as a £25m deal.

The microblogging giant controls its UK operations through a Dublin-based parent firm, known as Twitter International Company.

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Diageo Boss Paul Walsh To Step Down In June

Paul Walsh, the chief executive of FTSE 100 drinks firm Diageo, is to leave the post at the end of June to make way for Ivan Menezes.

The company confirmed Mr Menezes, the current chief operating officer (COO), will assume control on July 1, with 57-year old Mr Walsh supporting the transition until he retires from Diageo in June 2014.

Diageo chairman Franz B Humer said: "Paul is an outstanding chief executive. He has served our business, its shareholders, employees and partners with enormous imagination and dedication over the past 13 years.

Paul Walsh became Diageo CEO in September 2000

"I know he is justly proud of Diageo and its people, and he leaves a great legacy for his successor.

"The transition process which has been put in place enables Paul to contribute his knowledge and experience during Ivan's first year as chief executive officer."

He continued: "We are delighted to have a leader of Ivan's talents and global experience to succeed Paul. The handover is being made at a time when the business is strong and Ivan takes on the role of CEO at an exciting stage of the company's global development.

"The board is confident that Ivan will inspire our organisation and Diageo will continue to achieve our medium-term performance objectives."

Diageo's investors have netted £12bn in dividends under Mr Walsh

Faced with sluggish demand in recession-hit European economies, Diageo - like many of its peers in the consumer goods market - has been snapping up brands in emerging markets, where it aims to make around half of its turnover by 2015.

Mr Menezes, who is originally from India, previously headed Diageo's key North America division for eight years before his appointment as COO last year.

Diageo said Mr Walsh had not yet decided what his next move would be, though he has a number of corporate non-executive roles, as well as working as a 'business ambassador' for the Government.

Under his leadership, Diageo's share price grew threefold and the company paid £12bn in dividends to investors.

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HSBC Almost Doubles First Quarter Profits

London-listed HSBC has almost doubled its first quarter profits following a big fall in costs and bad debts.

It reported a pre-tax profit of $8.4bn (£5.4bn) for the period, up from $4.3bn a year ago, with Europe's biggest bank showing the benefit of a three-year restructuring plan.

Losses from bad debts plunged 51% to $1.2bn (£800m) and costs fell 10% in the first quarter from a year ago.

Chief executive Stuart Gulliver took over in early 2011 with a pledge to streamline operations, reduce complexity and axe businesses that were unprofitable or lacked scale.

He has shed 52 businesses while 37,000 jobs have gone since late 2010.

He said: "We have had a good start to the year, with growth in reported and underlying profit before tax.

"While continuing uncertainty in the global economy has created a relatively muted environment for revenue growth, we have increased revenue in key areas including residential mortgages and commercial banking in both our home markets of Hong Kong and the UK, and in our financing and equity capital markets business.

"Loan impairment charges were lower in every region, notably in North America."

HSBC's share price gained more than 3% on news of the performance - contributing the most points to a rise in the FTSE 100 index.

Last year, the bank posted a 16.5% slump in annual net profits as it was hit by US money-laundering fines, mis-selling scandals, rising taxation and a vast accounting charge.

It has previously put aside £1.5bn to cover costs associated with the provision of Payment Protection Insurance (PPI).

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Struggling Families Using Loans To Buy Food

Five million families in Britain are approaching financial "breaking point" and struggling to pay for food, according to research.

One in five households said their monthly incomes would not stretch to cover all of their food costs in April and they had to use some form of borrowing such as a credit card, overdraft or loan, or plunder their savings instead, consumer group Which? found.

Which? said this would equate to five million families if the findings were projected across the UK.

The findings provide an indication of the numbers of people who are struggling, despite official figures showing last week that personal insolvencies have fallen to their lowest level in five years.

The group who could not cover their food bills from their income alone was largely made up of low-income households earning less than £21,000 a year and squeezed 30 to 49-year-olds, many of whom had children.

Some 82% of these people said that they were worried about food prices and 57% were finding it "difficult to cope" on their current income.

People in this group were also more likely to be worried about their level of debt and 74% of them described economy as "poor".

Which? executive director Richard Lloyd said: "Our tracker shows that many households are stretched to their financial breaking point, with rising food prices one of the top worries for squeezed consumers.

"It's simply shocking that so many people need to use savings or credit to pay for essentials like food."

The study also found that only one quarter of people said that they were living comfortably on their incomes, while more than one third (36%) felt squeezed.

Two-thirds were worried about the effects of low interest rates on their savings - although insolvency experts have credited low interest rates with helping people's borrowing costs and keeping personal insolvencies down.

Almost one third (31%) of people surveyed cut back spending on essentials last month, mainly women aged between 30 to 49 years old.

Over two thirds (68%) described the state of the economy as poor, with just 9% saying it was good.

Around 2,000 people across the UK took part in the survey, which was carried out last month.

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Barroso 'Mends Austerity Fences' With Merkel

The German Chancellor is not to blame for the eurozone austerity policies, the head of the European Commission has said - in an apparent attempt to mend fences with Berlin.

European Commission president Jose Manuel Barroso drew fire from Germany last month for saying that austerity had "reached its limits", in a public challenge to Europe's biggest economy.

Chancellor Angela Merkel's government has long championed fiscal restraint.

With Greece mired in recession, unemployment in some countries running at more than 25% and France being given more time to cut its budget deficit, there is growing pressure on Mrs Merkel and other hardliners to focus on growth and job creation, not austerity.

But Mr Barroso defended the policies of austerity and said growth built on debt was not sustainable, while reiterating his view that "pure austerity" measures were no longer acceptable.

"What is happening in France and Portugal is not Merkel's or Germany's fault," Mr Barroso told the Welt am Sonntag weekly paper.

"Growth that is based on debt is not sustainable. At the same time, the policies that people see as pure austerity have reached their limits of political and social acceptance.

"But the EU Commission says the current policy mix is right and we must continue it."

Mr Barroso also said Germany should not become complacent in its reform efforts just because its economy was performing better than others, adding that the country needed to open its markets for services and infrastructure.

He added: "Complacency would be dangerous for Germany. We should not forget how tightly interlinked the European economy is.

"And Germany benefits most from the European internal market and from a stable euro.

"In certain sectors Germany should open its market more than before. We will say more on this in our country-specific recommendations at the end of the May."

Germany has fared better than others in the eurozone debt crisis that began in late 2009, but its economy shrank at the end of last year and the government now sees economic growth this year of just 0.5%

However its unemployment rate is fractional of many others in the 17-nation eurozone, sitting at just above 5%.

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Consumer Rights To Be Boosted Under New Laws

A bill giving increased rights to consumers and reducing burdens on business is set to be unveiled in the Queen's Speech.

Ministers believe reforming legislation will save the economy around £4bn over 10 years in more effective protection and better understanding of consumer rights.

The expected bill would consolidate consumer rights, currently split between eight pieces of legislation, into one place.

It will cover goods, services, digital content and unfair contract terms and consolidate over 60 pieces of legislation on Trading Standards' powers to investigate beaches of consumer law into one piece of legislation.

Consumer Minister Jo Swinson said: "Stronger consumer protection and clearer consumer rights will help create a fairer and stronger marketplace.

"We are fully aware that this area of law over the years has become unnecessarily complicated and too confusing, with many people not sure where to turn if they have a problem.

"We are hoping to bring in a number of changes to improve consumer confidence and make sure the law is fit for the 21st century."

Ministers believe businesses will benefit from faster resolution of complaints as they would spend less time and money dealing with them.

The bill is expected to help people unhappy with home improvements and make it easier to seek refunds for faulty goods.

It will also be confirmed this week that Citizens Advice and Citizens Advice Scotland have agreed to take on the responsibilities of Consumer Focus from April 2014.

Richard Lloyd, Which? executive director, commented: "A Consumer Bill of Rights is a welcome step towards ensuring that we have consumer laws fit for the 21st century.

"This bill is about making it easier for people to understand their rights and giving consumers power to challenge bad practice. It should also mean that both consumers and regulators have the tools they need to challenge unscrupulous businesses that breach the law."

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US Creates 165,000 New Jobs In April

The United States created 165,000 new non-farm jobs in April, with the figure beating expectations.

Hiring was much stronger in the previous two months than first thought, and the gains trimmed the unemployment rate to a four-year low of 7.5%, the official figures showed.

The Department of Labour report showed the job market is improving despite higher taxes and government spending cuts.

In addition to the April gains, the government said employers added 138,000 jobs in March and 332,000 in February. That is 114,000 more over the two months than was originally estimated.

The economy has created an average of 208,000 jobs a month from November through April, which is above the 138,000 added in the previous six months.

John Silvia, chief economist at Wells Fargo, said: "This is a good report. There's a lot of strength.

"It's good for the economy. It's good for people's income."

The stronger job growth suggests that the federal budget cutting "does not mean recession," Mr Silvia said. "It does not mean a dramatic slowdown."

The release of the figures in the US came with certain drama after a fire overnight at the department's headquarters shut down the building for most employees.

Members of the media were allowed in for the release of the report.

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Smartphones: Debit Cards Of The Future?

By Liz Lane, Sky News Reporter

Smartphones could soon become an even greater part of our lives as networks join forces to let us pay for high street goods with our mobiles.

The battle to dominate the market for "virtual wallets" is heating up, but with it come concerns about how thieves and fraudsters could take advantage.

Britain's big-three mobile networks - EE, Vodafone and O2 - are creating an opt-in service that will allow all bank, credit and loyalty card details to be stored on a phone SIM.

The customer will be able to swipe it on a card reader in a shop and instantly pay for goods.

David Sear, chief executive of Weve, the company managing the project, said: "You'll be able to pick up your goods from the counter - your sandwich or whatever it might be, on a small transaction - and simply swipe your phone, rather than having to get your card out of your wallet."

He is hoping to get retailers to sign up later this year, with the promise of advertising opportunities.

Stores will be able to send special offer alerts to customers' phones as they walk past in an effort to tempt them in.

Google, Barclays, Mastercard and Paypal have all come up with their own versions of the virtual wallet, but they have not caught on in the UK.

The contactless payment market as a whole has yet to take off, with only 6% of people in the UK having made such a transaction with a credit or debit card.

Bryan Glick, editor of Computer Weekly Magazine, describes it as a chicken and egg situation.

He said: "Retailers aren't going to offer this as a means of paying unless they know they're going to use it, but people aren't going to use it unless they know there are a lot of retailers they can use it at."

As for security, the new system will have a limit on how much can be spent on a phone without entering a Pin code.

However, cyber security expert Jason Hart said he would take further precautions before using it - including having his smartphone, and the payment system itself, password-protected.

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Sainsbury's To Bank On Lloyds Buyout

By Mark Kleinman, City Editor

The supermarket chain J Sainsbury will next week move to take full control of its banking operations by striking a deal to buy out its partner, Lloyds Banking Group.

I have learnt that Sainsbury's is on the verge of an agreement with Lloyds that is expected to cost it several hundred million pounds.

Insiders said that a deal was likely to be announced alongside the retailer's full-year results on Wednesday.

Sainsbury's is understood to have been keen to acquire full control of the joint venture, called Sainsbury's Bank, for some time. Buying the Lloyds shareholding will allow it greater freedom to develop and market new banking products and services.

Launched in 1997, Sainsbury's Bank has 1.4 million active customers, according to the company. The business offers insurance, loans and savings products.

Supermarkets including Tesco and Sainsbury's have bold ambitions to take on the major high street banks.

They believe there is an opportunity to do so because of growing consumer mistrust of the industry's dominant players, fuelled by the banking crisis and the emergence of subsequent mis-selling scandals.

Tesco plans to launch current accounts within the next year, while Marks & Spencer has also been trialling the provision of banking services in some of its shops.

In 2008, Tesco struck a deal similar to the one planned by Sainsbury's, which involved it paying £950m to acquire the 50% stake in its personal finance arm from Royal Bank of Scotland.

People close to the talks between Sainsbury's and Lloyds said that various commercial and service agreements would continue to exist between them following next week's deal.

Sainsbury's Bank is run by Peter Griffiths, the former head of the Principality Building Society, who was appointed to the role last November.

The sale of its stake in Sainsbury's Bank should benefit Lloyds, which is 41%-owned by taxpayers, by bolstering its capital base at a time when regulators are forcing British banks to augment the amount of capital they hold in reserve.

Lloyds is also examining the sale of Scottish Widows Investment Partnership, the fund management arm of its insurance business, as well as a stake in its international wealth management operations.

The joint venture with Sainsbury's is one of many legacy holdings taken on by Lloyds after its rescue of HBOS, the mortgage lender which came close to collapse in the autumn of 2008.

Lloyds declined to comment, while Sainsbury's said it did not comment on speculation.

The supermarket chain does not plan to update the City next week about the future of Justin King, its chief executive, following Sky News' disclosure last month that its board has hired headhunters to work on succession planning for the role.

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The Sky News Business Round-Up And Look Ahead

Sky's Naomi Kerbel offers a look ahead to what's coming up in the week's business news.

:: Monday 6th May

UK bank holiday

:: Tuesday 7th May

HSBC Q1 results

:: Wednesday 8th May

J Sainsbury Q1 results

:: Thursday 9th May

UK interest rate decision

:: Friday 10th May

G7 finance ministers and central bank governors summit

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US Creates 165,000 New Jobs In April

The United States created 165,000 new non-farm jobs in April, with the figure beating expectations.

Hiring was much stronger in the previous two months than first thought, and the gains trimmed the unemployment rate to a four-year low of 7.5%, the official figures showed.

The Department of Labour report showed the job market is improving despite higher taxes and government spending cuts.

In addition to the April gains, the government said employers added 138,000 jobs in March and 332,000 in February. That is 114,000 more over the two months than was originally estimated.

The economy has created an average of 208,000 jobs a month from November through April, which is above the 138,000 added in the previous six months.

John Silvia, chief economist at Wells Fargo, said: "This is a good report. There's a lot of strength.

"It's good for the economy. It's good for people's income."

The stronger job growth suggests that the federal budget cutting "does not mean recession," Mr Silvia said. "It does not mean a dramatic slowdown."

The release of the figures in the US came with certain drama after a fire overnight at the department's headquarters shut down the building for most employees.

Members of the media were allowed in for the release of the report.

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Smartphones: Debit Cards Of The Future?

By Liz Lane, Sky News Reporter

Smartphones could soon become an even greater part of our lives as networks join forces to let us pay for high street goods with our mobiles.

The battle to dominate the market for "virtual wallets" is heating up, but with it come concerns about how thieves and fraudsters could take advantage.

Britain's big-three mobile networks - EE, Vodafone and O2 - are creating an opt-in service that will allow all bank, credit and loyalty card details to be stored on a phone SIM.

The customer will be able to swipe it on a card reader in a shop and instantly pay for goods.

David Sear, chief executive of Weve, the company managing the project, said: "You'll be able to pick up your goods from the counter - your sandwich or whatever it might be, on a small transaction - and simply swipe your phone, rather than having to get your card out of your wallet."

He is hoping to get retailers to sign up later this year, with the promise of advertising opportunities.

Stores will be able to send special offer alerts to customers' phones as they walk past in an effort to tempt them in.

Google, Barclays, Mastercard and Paypal have all come up with their own versions of the virtual wallet, but they have not caught on in the UK.

The contactless payment market as a whole has yet to take off, with only 6% of people in the UK having made such a transaction with a credit or debit card.

Bryan Glick, editor of Computer Weekly Magazine, describes it as a chicken and egg situation.

He said: "Retailers aren't going to offer this as a means of paying unless they know they're going to use it, but people aren't going to use it unless they know there are a lot of retailers they can use it at."

As for security, the new system will have a limit on how much can be spent on a phone without entering a Pin code.

However, cyber security expert Jason Hart said he would take further precautions before using it - including having his smartphone, and the payment system itself, password-protected.

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Personal Insolvencies At Five-Year Low

Personal insolvencies have dropped to their lowest level in five years despite the tough economy, according to official figures.

There were 25,006 individual insolvencies across England and Wales in the first three months of 2013, the figures have shown.

It marks the lowest level recorded since the first quarter of 2008, the Insolvency Service said.

The statistics show a 1.8% drop on the previous quarter and a 12.9% fall compared with the same period a year ago - within the figure, bankruptcies hit their lowest level since winter 2002.

Bankruptcy orders plummeted by 27% year-on-year, with 6,663 in the first quarter of this year.

Bankruptcies have generally been falling back since the introduction of debt relief orders (DROs) in 2009.

DROs are are often dubbed "bankruptcy light" and are aimed at people with lower levels of debt but no realistic prospect of paying it off. They have been running at higher numbers than bankruptcy orders since last summer.

The latest figures showed there were 7,219 DROs in the first quarter of this year, marking a small drop on the previous quarter and a 9% fall compared with a year ago.

Individual voluntary arrangements (IVAs), which are agreements which involve sharing money out between creditors, were the only type of personal insolvency to see an increase on the previous three months.

Some 11,124 IVAs have been recorded this year so far, which is a 1.3% rise on the quarter but still 5% lower than a year ago.

The figures show signs of further improvements in people's ability to manage their finances, after last year's figures showed that personal insolvencies dropped to their lowest annual levels since 2008.

Continued low interest rates have helped to ease some borrowers' costs and unemployment has not risen to the levels some had feared.

However, the official figures do not show the full extent of people struggling with debt.

Analysts have warned that many people are still trying to "muddle through" the tough economy and they remain under pressure from soaring rents, high energy bills and a tough jobs market.

Welfare reforms will also mean more low-income families will have very tight budgets to balance this year, experts have warned.

Charles Turner, president of the Insolvency Practitioners Association (IPA), said: "The figures released this morning do not in my opinion reflect the reality of life for a great number of consumers who are undoubtedly struggling as wage growth flat-lines and their household costs continue to increase.

"The reason for this is that bankruptcies are an expensive bureaucratic process which provide poor returns for creditors and so are less favoured as a solution.

"Debt relief orders are down but that is because they are only appropriate for a minority of individuals due to the cap of £15,000 on total liabilities."

Mr Turner suggested that the slight rise in IVAs could be because they often "provide a more commercially viable outcome for both the debtor and creditors".

He said he has seen evidence that debt management plans, which are not included in the figures because they are an informal process, have "grown significantly", partly because they are seen as more cost-effective.

He added: "The harsh reality is that many people are still struggling on, trying to make ends meet."

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RBS Returns To Profit In Latest Quarter

Opinion: Investment Banking's Worth It

Updated: 10:30am UK, Friday 03 May 2013

By David Buik, Panmure Gordon & Co

The moment that Barclays' Rich Ricci's Champagne Fever charged up the Cheltenham hill on March 12 to take the opener at the festival, I had that feeling that this would be the last time we would see Mr Ricci in that flamboyant tweed suit, as head of investment banking - he is the last vestige of the Diamond era.

The subsequent news of his bonus announced on Budget Day was the overriding evidence required that the change in Barclays' culture, promised by Messrs Walker and Jenkins, was finally being implemented.

However sometimes I feel that commentators on banking have been living on Planet Zog. Ill-informed comment such as 'casino banking' caused the capitulation of the banking sector, is just plain arrant nonsense.

It is generally acknowledged that in paying circa £26bn for ABN AMRO, RBS had bought a 'pup'. Apart from that injudicious and reckless venture, there is no evidence that investment banking triggered the banking crash of 2008, unlike the sub-prime lending efforts in the US, where investment banking played a matinee idol's role.

The UK's problems emanated from poor credit assessment which saw Northern Rock, Bradford and Bingley and HBOS collapse like a pack of cards. Also, the merger between Lloyds and HBOS was cobbled together unnecessarily with indecent haste towards due diligence. Our problems in London were exacerbated by bank balance sheets growing by gargantuan proportions with inadequate regulation.

Without any doubt at all, had Barclays Capital not contributed, apart from one year, between 50-60% of the bank's profits plus a capital injection from Qatar the 'Bald Eagle' would also have been at the behest of the taxpayer.

The public at large may not have liked the cut of Bob Diamond's jib nor the disproportionate bonuses paid. Nonetheless Barclays was a successful 'mover and shaker' in global investment banking. We should also remember that had Steve Ashley's RBS Treasury team not contributed about £9bn to profits in 2008-9 RBS would be in a very parlous state, rather than parlous.

Though some of the responsibility for Libor transgressions has been laid at the feet of investment banking, most of it and that of the huge fines and repayments made on PPI miss-selling are down to general and consumer banking.

Also, let's not conveniently forget the fines for inadequate money-laundering controls incurred by HSBC and Standard Chartered. Barclays' investment banking recently posted a profit of £1.3bn out of £1.8bn - hardly shabby.

Lloyds Banking Group posted much better than expected pre-tax profits of £1.92bn. Lloyds's continued recovery is hugely reliant on the performance of the UK's economy.

Impairment charges were cut from £1.6bn to £1bn. There is no guarantee that this trend will continue.

RBS posted its first net profit of £393m. Impairments are again down by a third to £1.03bn. Much has been achieved in the last few years.

The balance sheet is down by £900bn since 2009. RBS has ammunition to lend to SMEs. However the UK economy is still brittle; so any talk of privatising Lloyds and RBS before 2015 may be precipitous.

Next week HSBC and Standard Chartered post their interim results. Their respective results will be buoyed by significant overseas earnings and in the case of HSBC, also by investment banking revenues.

The failure by Lloyds to sell its 632 branches to the Co-op, following in the wake of Santander jilting RBS at the altar last year will come as disappointment to the Chancellor and Business Secretary Vince Cable, but as no surprise to observers in the City.

The threat of draconian EU regulation creates black cumuli nimbus clouds over the UK's banking sector. We also all understand the need for greater capital requirements. Capital would be much easier to raise without the EU sitting over London like the Sword of Damocles Also more upbeat sentiments from our political masters would be constructive.

Whilst banking competition on the high street is a laudable aspiration, getting the correct regulation of UK banks is even more important.

Though we look forward to Mark Carney's arrival at the Bank of England, he is only human and has just blood in his veins. We should not split our banks up, as Dr Cable and Sir Mervyn King would have us do. Implementing a 'split of assets' will seriously damage London's ability to remain at the head of global finance.

We understand Antony Jenkins's rationale for changing the culture of Barclays. We just hope that Barclays has not thrown the baby out with the bath water by attempting to put investment banking on the back burner!

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Euro Forecast: Jobless Total To Stay Static

Unemployment levels are not expected to reduce significantly in any key eurozone nation during 2014, according to new forecasts released by the European Commission.

Recession in 2013 in the eurozone will be worse than expected, with GDP slipping 0.4% against a previous forecast of -0.3%.

The commission's spring forecast showed the situation improving however in 2014 in the nations sharing the euro, with growth at 1.2%, slightly less than forecast in February.

But France and Italy are both expected to see jobless numbers rise next year, it said.

However Spain is set to see dole queues drop by 0.6% while Greece's are expected to reduce by 1%, the commission added.

Meanwhile Germany, which is Europe's biggest economy, has been forecast to see a drop of just 0.1% in its jobless, down to 5.3%.

Across the 17-nation eurozone the commission said it expected the unemployed total to also ease by 0.1% in 2014, to 12.1%.

The commission said that in total across the whole 27 nations of the EU, which includes Britain, unemployment would remain static at 11.1% in both 2013 and 2014.

The commission warned that Cyprus, which has just gone through a major banking crisis, would head into a sharp recession.

It said GDP would contract in Cyprus in 2013-14 by 12.6%.

The forecasts come a day after the European Central Bank cut its base rate to an historic low of 0.5%.

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Energy Firms 'Failed To Meet Consumer Targets'

The energy regulator is investigating six suppliers, saying they have failed to meet their targets on providing consumers with efficiency measures.

Ofgem said that while the sector had achieved 99% of energy efficiency targets set by the Government, some firms had not met their obligations to customers.

It named British Gas, Drax, Scottish Power and SSE as among the companies which had missed the targets, aimed at helping households lower their energy bills and reduce carbon emissions.

Under the measures, energy suppliers were obliged to provide customers, and in particular vulnerable consumers such as people on low incomes or the elderly, with insulation for their lofts and walls and replace inefficient boilers.

Energy firms are under pressure to help bring bills down

The investigation is a sign that the Government and regulator are taking an increasingly tough stance against energy suppliers after a series of fines for mis-selling and at a time when energy bills are rising.

Ofgem said EDF Energy, Eggborough Power, E.On and nPower had all met their responsibilities.

Sarah Harrison, Ofgem's senior partner for enforcement, said: "Ofgem's role is to ensure that consumers do not lose out by the failure of firms to deliver all the help required."

Under the Consumer Energy Saving Programme, British Gas was found to have met just 62.4% of its target while Scottish Power managed 70%.

SSE, which was recently fined £10.5m for mis-selling, achieved a figure of 90.9%, the regulator said, while EDF, E.On and Scottish Power all exceeded their targets.

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Verizon Dials Up Funds For $100bn Vodafone Bid

By Mark Kleinman, City Editor

The American telecoms group Verizon is lining up funds for a blockbuster $100bn bid to buy Vodafone out of their US mobile phone joint venture.

Insiders told Sky News on Wednesday that Verizon's board had asked banks to present potential financing options this week for a deal to take full control of Verizon Wireless, which would rank as one of the biggest corporate takeovers in history.

A meeting of Verizon's board has also been scheduled for this week. Banks including JP Morgan are understood to be preparing to offer some of their biggest ever loan facilities to help finance a potential deal, according to senior bankers.

Speculation about a sale of the Vodafone stake has been growing in recent weeks, but the disclosure that Verizon is asking banks to table financing solutions offers further evidence that a formal offer is likely to be made in the near future.

The biggest obstacle to an agreement between Verizon and Vodafone remains their respective valuations of Verizon Wireless, with the British company expecting as much as $135bn for its share of the US's biggest mobile network.

Verizon's interest is being accelerated to allow it to take advantage of red-hot debt markets, which should enable the company to borrow at least $50bn, or roughly half the price it plans to offer Vodafone. Verizon would probably borrow the money from a large lending syndicate before issuing several tranches of bonds, according to people close to the situation.

The American company has intensified pressure on its British partner to come to the negotiating table by signalling its belief that it can structure a deal that would not incur a major tax liability for Vodafone.

Vodafone is being advised by Goldman Sachs and UBS, its long-standing financial advisers, on the developing situation.

If a deal does get agreed, Vodafone would probably return a chunk of the proceeds to its shareholders that might qualify as the biggest such handout in corporate history.

Verizon declined to comment.

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RBS Inquiry: Cable Denies Any 'Interference'

The Business Secretary has denied any suggestion of interfering with the legal process in connection with the collapse of Royal Bank of Scotland (RBS).

Vince Cable was speaking to Sky News after it emerged he had written to prosecutors urging a decision "as quickly as possible" about potential action against the directors of RBS at the time of its taxpayer rescue in 2008.

The matter was referred to Scottish prosecuting authority the Crown Office and Procurator Fiscal Service in January 2012 following a damning report into the bank by the Financial Services Authority (FSA).

The report found that RBS was brought to its knees by "multiple poor decisions" and a £50bn "gamble" on buying Dutch bank ABN Amro, sparking the £45bn taxpayer rescue of RBS

In his letter to Advocate General Lord Wallace - a fellow Liberal Democrat politician - Mr Cable asked for an update on the progress of the case but insisted he was "not seeking to influence the outcome" of the legal process.

Former directors of RBS could face criminal charges over its 2008 failure

He said: "I am very keen for a decision to be reached as quickly as possible in order to maintain public confidence in the efficiency of the decision-making process.

"I am fully aware that the decision whether or not to prosecute rests with the Crown Office and Procurator Fiscal Service as the relevant independent prosecuting authority.

Mr Cable requested likely timeframes for a decision but said today that his intervention did not amount to interference, insisting it was "right to reassure the public that this matter is still being pursued."

While no-one has ever faced criminal prosecution over the collapse of RBS, a civil case was launched by shareholders last month.

Former RBS boss Fred Goodwin lost his knighthood in 2012

The group of more than 12,000 individual and institutional investors claim they were misled by directors over the RBS £12bn rights issue in April 2008, which preceded the bailout.

The group, which also named four former directors including ex-chief executive Fred Goodwin in the suit, said their final claim against the bank could potentially be worth up to £4bn.

Mr Goodwin was stripped of his knighthood last year in what was seen as a political concession to public anger over the bank's demise.

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