Headlines

Lloyds and Royal Bank of Scotland are set to impose a cap on cash bonuses for the sixth consecutive year, in line with previous agreements made with the Government body that holds the taxpayer’s shares in the banks, The Telegraph reported. The two banks negotiate with UKFI each year before setting their bonuses. As well as adhering to European rules that cap bonuses at a maximum of 200pc of base salary, Lloyds and RBS are expected to limit cash rewards to £2,000 per employee, in line with a long-standing agreement with UKFI.

Greece will seek an extension to its rescue deal from the rest of the eurozone Wednesday, two officials with knowledge of the situation said, marking an apparent shift in the standoff between Athens and its creditors, The Wall Street Journal reported. The extension of what the officials called Greece’s “loan agreement” could be for a period of four to six months, preventing the country’s current deal with the eurozone from expiring at the end of February and giving it time to negotiate a new bailout. The conditions attached to the request were still under negotiation, they said.

The Bank of Portugal on Tuesday stuck to a decision to keep a loan linked to Goldman Sachs in a "bad bank" carved out after the rescue of Banco Espirito Santo (BES), putting the central bank and Goldman Sachs on course for a legal battle. The central bank said any remaining doubts could only be clarified in court. Goldman responded that it intended "to pursue all appropriate legal remedies without delay". The Wall Street bank and some of its clients lent BES $835 million in July last year using an entity it created called Oak Finance Luxembourg SA.

Caixabank of Spain issued a takeover bid on Tuesday for BPI, a Portuguese bank in which it was already the largest investor, in the latest chapter in the shake-up of Portugal’s banking sector, the International New York Times DealBook blog reported. The cash offer values BPI at 1.94 billion euros, or $2.21 billion, meaning that the takeover would be worth €1.08 billion if Caixabank ends up with 100 percent of the equity. The bid represents a 27 percent premium over the Portuguese bank’s closing share price on Monday.

Ukraine hopes to get as much as $10.8 billion from the International Monetary Fund in 2015 and save up to $15 billion over the next four years from a planned restructuring of its foreign debt, the crisis-hit country’s Finance Minister Natalie Jaresko said, The Wall Street Journal reported. Ukraine is dependent on international funding as its finances and economy have been hammered by a bloody, monthslong conflict with Moscow-backed militants in its industrial east. The IMF proposed last week a $17.5 billion four-year program to shore up Ukraine’s war-torn economy.

The European Central Bank is unlikely to pull the plug on emergency funding for Greek banks this week despite a standoff between Athens and its international lenders, according to sources, the Irish Times reported. The ECB’s governing council meets on Wednesday and will review the provision of so-called Emergency Liquidity Assistance (ELA) to Greek banks, as Greece is at loggerheads with euro zone governments over the future of its international bailout, which expires at the end of this month.

Petropavlovsk PLC suffered a blow Tuesday when an investment vehicle representing a sizable number of the Russia-focused gold miner’s shareholders said it would vote against the company’s financing package, which is aimed at staving off the threat of bankruptcy, The Wall Street Journal reported. Sapinda Holdings B.V. told the U.K.-listed miner that shareholders representing 10.7% of Petropavlovsk’s equity intend to vote against the company’s restructuring proposal after concluding that it unfairly favors bondholders over shareholders.

A crucial meeting of eurozone finance ministers over the future of Greece’s bailout broke down in acrimony on Monday after Athens angrily rejected the bloc’s insistence that it agree to complete its current €172bn rescue as “absurd” and “unacceptable,” the Financial Times reported. It is the second time in five days that negotiations between the new anti-austerity Greek government and its eurozone creditors have collapsed and it means Athens, whose public finances are deteriorating fast, could soon be left with no European financial backstop.

The Bank of Portugal has trimmed down the list of potential bidders for Novo Banco - the successor to Banco Espirito Santo after a state rescue - saying that 15 out of 17 institutions that had expressed interest in the sale met its requirements, Reuters reported. The central bank said in a statement on Monday it asked the 15 pre-qualified institutions to sign a confidentiality agreement, after which they will have until March 20 to present non-binding offers. It did not provide any names or details.

Japan’s latest recession was as short as it was unexpected, the International New York Times reported. The Japanese economy, the world’s third-largest, started expanding again at the end of 2014, government data showed Monday, after a painful midyear slump that had raised doubts about Prime Minister Shinzo Abe’s efforts to rekindle growth and end entrenched deflation. The latest in what seem like countless Japanese downturns — there have been six since 1997 — lasted just two quarters, the shortest technical definition of a recession.