London afternoon: Banks continue to weigh

15th Dec 2009 14:51

London is off its worst levels of the day, but remains deep in the red as finance plays suffer on fears about the strength of European peers.Barclays and HSBC are among the worst performers as Greek rivals slump on worries about their country's budget deficit.Reports, later denied, that Austria's central bank and financial regulator have put leading cooperative bank, Oesterreichische Volksbanken, on a watch list is also a concern. Austria's sixth-largest bank, Hypo Group Alpe Adria, was nationalized yesterday.But RBS, whose chairman today insisted it needed to pay 'commercial' bonuses to reward staff, boasts the biggest gains of any blue chip. Philip Hampton also denied reports that the board threatened to walk out over government limits to pay-outs, given the share price a boost.British Airways has lost altitude though following yesterday's news that the cabin crew will strike for 12 days over Christmas. BA said it is mulling "all options" to cope with the planned action by cabin crew over the Christmas period. BA is reportedly trying to rework flight schedules and is considering a possible injunction to stop the walkout that could leave 1m passengers stranded over the holiday period.It's not expected to back down despite estimates that the industrial action could cost the airline £40-£50m in lost profits. Broker UBS points out that the new measures workers object to are set to save the carrier about £100m a year.Silver miner Fresnillo leads miners lower after metal prices fell.Costa Coffee owner Whitbread has offered to buy Eastern European coffee shop operator CoffeeHeaven for about £36m. The recommended offer of 24 pence in cash represents a premium of around 25%.Serco is confident enough about prospects to repeat forecasts for 2009 ahead of meetings with analysts prior to its financial year end on 31 December. The outsourcing group predicts double-digit revenue growth this year and a 30 basis point increase in adjusted pre-tax profit margin, excluding SI International which should increase growth by some 10%.National Express has received 90.47% acceptances for its £360m rights issue, the bus and trains operator confirmed Tuesday. Shareholders owning more than 323m shares subscribed for the fully underwritten 7 for 3 cash call at 105p a share.Elsewhere in the sector, bus and train group Go-Ahead expects interim profits from its rail business to halve though its bus business is doing better. Rail profits are expected to slide as growth in passenger numbers across its three franchises will not be sufficient to offset the reductions in net franchise subsidies from the government. Lloyd List publisher and exhibitions group Informa is still on track to hit forecasts this year. In a very brief statement, the group, which ended its interest in buying German publisher Springer earlier this month, it continues to trade in line with management expectations.A return to sales growth in the UK & Ireland helped carpets and floor coverings group Carpetright increase pre-tax profit by 16% and double the dividend. Profit before tax for the 26 weeks ended 31 October grew to £11m from £9.5m a year ago, which includes a £2.9m loss on the exit from Poland. Revenue rose 9% to £258m.Credit lender International Personal Finance (IPF) anticipates that full year results will slightly exceed expectations.