Aegon, the Dutch insurance group, on Thursday appointed American Donald Shepard as its next chairman...
Aegon, the Dutch insurance group, on Thursday appointed American Donald Shepard as its next chairman, an announcement that overshadowed third-quarter results and the company's reiteration of its forecast of full-year earnings growth, adds the FT.
The appointment of Mr Shepard, who heads Aegon's US operations and will succeed Kees Storm in April next year, is the most prominent yet of a non-Dutch national in the Netherlands.
The move will trigger speculation over Aegon's plans for the US, where it already generates about 60 per cent of earnings.
Mr Shepard said there was no question of relocating its headquarters to the US and was quick to head off suggestions that it would signal a sea-change at the group, which, under Mr Storm, has become one of the world's largest listed life assurers.
The Japanese government on Friday admitted the economy was probably in its worst condition in more than 20 years by forecasting real gross domestic product would contract 0.9 per cent, a reversal of its previous estimate of 1.7 per cent growth, continues the FT.
A 0.9 per cent decline in real GDP in the year ending in March would be the largest drop since 1980, when the current calculation system was adopted, the Cabinet Office said. The government also lowered its forecast for nominal GDP - not adjusted for inflation - to a contraction of 2.3 per cent, down from its previous estimate of 1 per cent growth.
The government's admission puts its forecast in line with that of most private sector economists who have been lowering their own forecasts over the past few months as a barrage of weak economic data has shown the economy's fragility.
Financial markets were betting on further sharp cuts in borrowing costs after the Bank of England and the European Central Bank yesterday wrong-footed analysts with half-point rate reductions, says the Times.
The City believes the Bank of England will knock another half point from borrowing costs by the spring after yesterday's surprise decision by the Monetary Policy Committee (MPC) to reduce the base rate to a 37-year low of 4 per cent.
Analysts are also looking for at least another half point from the ECB, which cut its key lending rate to 3.25 per cent. This was the first time the Frankfurt institution had sanctioned two back-to-back half-point rate moves in its three-year history.
Equitable Life's proposed compromise deal to resolve its deep-seated financial problems could be derailed by falling yields on long-dated government bonds and yesterday's half-point cut in rates, continues the Times.
The mutual insurer wants 175,000 policyholders to give up their right to guaranteed annuities in return for a one-off rise in the value of their pension averaging 17.5 per cent. But falling yields make the guarantees more valuable.
Yesterday's cut in base rates could also prompt fewer policyholders to take 25 per cent of their pension as a tax-free cash lump sum because the guarantees are worth far more than the returns on cash deposits.
British business could also face costs running into tens of millions of pounds after a European Court of Justice ruling yesterday that looks set to stop companies reclaiming VAT on business expenses paid by their staff, says the Times.
KPMG and Ernst & Young, the accountants, gave warning that the ruling, in a case brought by the European Commission against the Dutch Government, was likely to force Britain to stop one million VAT-registered businesses reclaiming the tax paid on staff expenses on everything from travel to stationery.
Stuart Hindle, of KPMG, said the ruling implied that companies would be able to reclaim VAT only if they paid directly or had a supplier's invoice showing that they had done so. If staff paid and submitted personal receipts in expense claims, the VAT, worth 17.5 per cent, would be lost.
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