Apple to pay dividend from $98bn cash pile

Apple chief executive Tim Cook has fulfilled a longstanding desire of investors by initiating a quarterly dividend and share buyback that will pay out $45bn (£28bn) over three years.

The world’s most valuable technology company will start paying its first dividends since 1995 – a regular quarterly payout of $2.65 a share – in July, and buy back up to $10bn of its stock beginning in the next fiscal year.

The $10 billion annual dividend program, which Cook said will be reviewed periodically, ranks among the largest current U.S. corporate cash payouts.

But he told analysts on Monday that “making great products” remained Apple’s top priority, echoing the sentiments of his former boss Steve Jobs, who died in October after a years-long battle with cancer.

“We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure,” Cook said. “You’ll see more of all of these in the future.”

Minimum wage to rise by 11p an hour

The minimum wage is set to rise by 11p to £6.19 an hour from October, while the rate for under-21s will be frozen.

The increase in the adult rate represents a 1.8 per cent rise. The cost of living increased by 3.6 per cent in the year to January, according to the Consumer Prices Index.

The Low Pay Commission made the recommendation which has been accepted by the government.

The rate for those age 18–20 will remain at £4.98 an hour.

FSA chief Hector Sants to stand down

Hector Sants, the head of the Financial Services Authority (FSA), has resigned and will leave the organisation at the end of June.

The organisation added that the Bank of England’s Andrew Bailey would take over Sant’s role in running the part of the FSA that will become Britain’s future Prudential Regulatory Authority (PRA) body.

This is the second time that the former investment banker has announced his intention to leave. In February 2010, Hector announced plans to step down as CEO of the FSA in the summer of 2010, after three years in the position. However he stayed on to oversee the breakup of the organisation.

In June 2010 the coalition government announced plans to change the UK’s financial regulatory framework from an integrated model to a twin peaks model, with prudential and conduct supervision to be carried out by two new organisations – the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

Sants was asked to stay on as CEO in order to deliver the Government’s plans and to help achieve an orderly transition from the current system of regulation to the proposed future model.

“When I agreed to stay on as CEO in 2010, I committed to stay and deliver an orderly transition to the Government’s new regulatory structure. The project is now firmly on track and with the establishment of twin peaks within the FSA I will have achieved that goal,” Sants said.

Britain and US set to agree emergency oil stocks release

Britain is poised to cooperate with the United States on a release of strategic oil stocks that is expected within months in a bid to prevent fuel prices choking economic growth in a US election year, according to several sources who spoke to Reuters.

A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected “shortly” following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue.

Britain would respond positively, two sources said, and Cameron said a release was worth considering.

“We didn’t make any decision, this has to be discussed broadly. We’ve got to look at this issue carefully, it’s something worth looking at. Short-term should we look at reserves? Yes, we should,” Cameron said during a meeting with students in New York.

“We’d both like to see global oil prices at a lower level than they are.”

Details of the timing, volume and duration of a new emergency drawdown have yet to be settled but a detailed agreement is expected by the summer, one of the sources said.

Other countries may also be approached by Washington to contribute, a further source said, Japan among them.

Lloyds to sell £1.4bn of Australian loans

Lloyds Banking Group has started the sale of 2.1bn Australian dollars (£1.4bn) of non-performing loans on distressed property in Australia as the group seeks to wind down non-core assets, according to reports.

The move is the second round of sales after the bank offloaded 1.7bn Australian dollars of distressed property loans to Morgan Stanley and Goldman Sachs in November last year.

A spokeswoman for Lloyds said only that the bank was looking at options for its non-core assets.

“We are looking at a number of actions which will help us deleverage our non-core assets,” she said.

Departing Goldman banker slams “rip-off” culture

A Goldman Sachs banker has launched a withering attack on the bank in a newspaper column announcing his resignation, saying that several managing directors at the Wall Street firm had referred to their own clients as “muppets”.

In an opinion column for Wednesday’s New York Times, Greg Smith, who worked in equity derivatives, said Goldman had become “as toxic and destructive as I have ever seen it”.

“It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets”,” Smith said in the newspaper.

“How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”

Goldman Sachs issued a short statement in response: “We disagree with the views expressed, which we don’t think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

Cathay Pacific profits plummet

Cathay Pacific Airways, Asia’s fourth largest airline, posted a bigger-than-expected 61 per cent drop in 2011 net profit today, amid high fuel costs and a slowing global economy, and warned of a more challenging year ahead.

The firm reported an annual net profit of HK$5.5bn, down from a record high of HK$14.05bn in 2010 which included HK$3bn of profit from the sales of its interests in two units.

The cost of fuel, which is Cathay’s biggest single expense, rose 44 percent to HK$12.46bn in 2011.

Global economic instability has continued in the first half of this year and jet fuel prices have risen further, Cathay said in a statement to the Hong Kong Stock Exchange.

“As a result, 2012 is looking even more challenging than 2011 and we are therefore cautious about prospects for this year,” chairman Chirstopher Pratt said in the statement.

The notoriously cyclical global airline industry faces headwinds from high fuel prices and sluggish demand, particularly in the premium segment.

Cathay rival Singapore Airlines Ltd has cut cargo capacity and asked its pilots to take non-paid leave to counter the downturn.

Britain considers issuing 100-year government bonds

Britain could start selling 100-year and perpetual bonds, Treasury sources said on Tuesday, as ministers seek to lock in current low market interest rates to reduce the future costs of servicing the government’s debt burden.

The Debt Management Office will launch a consultation alongside next week’s budget to gauge the appetite for super-long bonds of 100 years up to gilts that never come to maturity, after initial discussions with investors proved positive.

The consultation with gilt market makers and funds will report back in three months, making the first tranche of any new bonds possible in the next financial year. Currently, Britain’s longest bond matures after 50 years.

Issuing perpetual bonds, not seen in Britain since the end of the First World War – and before that, the aftermath of the South Sea Bubble in the 18th century – would mean the cost of servicing at least some of Britain’s government debt portfolio would remain low even if future administrations had to pay higher interest on new bonds.

“This is about locking in for the future the tangible benefits of the government’s credibility and the safe-haven status we have today,” a Treasury source said. “The prize is lower debt interest repayments for taxpayers for decades to come.”

Bonds with a maturity of more than 50 years are rare. Mexico and the Massachusetts Institute of Technology are among the few issuers of 100-year bonds.

Recent sales of long-dated UK gilts have met with strong demand, and yields on 50-year gilts hit a record low of around 3 percent in January.

With a perpetual bond, the issuer does not repay the principal sum, but can pay interest on it without a fixed end.

Britain considers issuing 100-year government bonds

Britain could start selling 100-year and perpetual bonds, Treasury sources said on Tuesday, as ministers seek to lock in current low market interest rates to reduce the future costs of servicing the government’s debt burden.

The Debt Management Office will launch a consultation alongside next week’s budget to gauge the appetite for super-long bonds of 100 years up to gilts that never come to maturity, after initial discussions with investors proved positive.

The consultation with gilt market makers and funds will report back in three months, making the first tranche of any new bonds possible in the next financial year. Currently, Britain’s longest bond matures after 50 years.

Issuing perpetual bonds, not seen in Britain since the end of the First World War – and before that, the aftermath of the South Sea Bubble in the 18th century – would mean the cost of servicing at least some of Britain’s government debt portfolio would remain low even if future administrations had to pay higher interest on new bonds.

“This is about locking in for the future the tangible benefits of the government’s credibility and the safe-haven status we have today,” a Treasury source said. “The prize is lower debt interest repayments for taxpayers for decades to come.”

Bonds with a maturity of more than 50 years are rare. Mexico and the Massachusetts Institute of Technology are among the few issuers of 100-year bonds.

Recent sales of long-dated UK gilts have met with strong demand, and yields on 50-year gilts hit a record low of around 3 percent in January.

With a perpetual bond, the issuer does not repay the principal sum, but can pay interest on it without a fixed end.

UK unemployment rises by 28,000

UK unemployment rose by 28,000 to 2.67m in the three months between November and January, meaning that 8.4 per cent of the economically active population are without a job, figures from the Office of National Statistics show.

Meanwhile youth unemployment rate rose to a record high of 1.042m in the three months to January, taking the unemployment rate for 16 to 24-year-olds to 22.5 per cent, the highest since record began in 1992.

The figures also revealed that 270,000 public sector jobs gone in the past year while 226,000 have been created in the private sector.

The Office for National Statistics said that the number of people claiming jobless benefit rose by 7,200 – slightly more than economists had forecast – to a 1.612 million in February.

Growth in average earnings was slowing, increasing by only 1.4 per cent in the year to January, compared to a rate of 1.9 per cent in December.

The figures will increase the pressure on Chancellor George Osborne to take measures to boost growth and jobs when he presents his 2012/13 budget next week, at a time when the economy is struggling to show sustainable recovery.