Sector: Finance

Attention continues to focus on remuneration among the banks, whether or not they have been bailed out by the taxpayer. Royal Bank of Scotland, a key beneficiary of government rescue support, has unveiled a new incentive payment plan, under which chief executive Stephen Hester could receive as much as £4.9 million. At the same time, the Office of Fair Trading has given notice of an inquiry into fees charged by investment banks to clients. OFT chairman Philip Collins is reacting to suggestions that investment banks are operating a virtual cartel in some fields.

Insurance group Prudential’s ambitious £23.3 billion plan to buy the Asian arm of stricken US insurer AIG remains a market talking point. Pressure from institutional shareholders has obliged Tidjane Thiam, the Pru’s chief executive, to turn down a board seat at French financial giant Société Générale.

Meanwhile, small and medium-sized company financier Ultimate Finance has increased first-half profits 36 per cent to £191,000 pre-tax. Ultimate provides factoring and ‘confidential’ invoice discounting, supported by a £25 million financing arrangement with Lloyds Banking Group, and lifted turnover 27.3 per cent to £2.85 million.