Thursday morning business bulletin

Apr 17 2008 By Andrew Mernin

Confidence in the financial sector continued to improve today amid hopes for a Treasury-backed solution to the wholesale banking crisis.

Firms from the sector occupied four of the five leading positions in the FTSE 100 Index, with Alliance & Leicester setting the pace after a gain of 4%, or 21p to 524p.

The rest of the London market was also on the front foot, with the Footsie consolidating its position above the 6,000 barrier - up 21.7 points at 6067.9 after an hour of trading.

Among other banking stocks, Halifax Bank of Scotland lifted 19.5p to 559p, Barclays rose 17.25p to 496.25p and Royal Bank of Scotland cheered 11p to 386p.

The other big move of the session came from closed life fund Resolution after the Financial Services Authority approved its change of control through a proposed takeover by Pearl Assurance. Resolution shares were 18.5p higher at 715p.

The retail sector continued to be dogged by uncertainty amid challenging trading conditions.

The Co-operative Group today unveiled an ``ambitious" three-year plan to double profits and invest £1.5bn in transforming its retail estate.

The strategy by the UK’s largest mutual retailer will focus on a single unified brand for the business following its creation from the merger of the Co-operative Group and United Co-operatives last summer.

The Co-op is the UK’s fifth largest food retailer, the third largest pharmaceuticals chain, the biggest provider of funeral services and the largest independent travel business in the country. It now employs 85,000 people, has 2.5 million members and operates more than 4,300 retail outlets.

Chief executive Peter Marks said he wanted these sites to be trading under the same brand by the end of 2009.

Insurance giant Prudential today posted a better-than-expected hike in first quarter sales, but showed signs that the economic turmoil was starting to bite as new business slipped 19% on the final three months of 2007.

The group reported group-wide insurance sales of £729m for the three months to March 31, up 13% year-on-year.

Prudential saw sales of £189m at its UK arm, up 4% on the same period last year, while its Asian business continued to outshine its domestic operations, with sales up 30% on an annual basis at £375 million.

However, even the fast-growing business in Asia showed signs that it was feeling the heat from the tough trading conditions, with quarterly performance rising at a more muted 2%.

And the UK business dived 49% on the fourth quarter of 2007 as Prudential described conditions as uncertain and volatile.

The pound at 9am was US$1.9741 compared to US$1.9741 at the previous close while the euro at 9am was £0.8085  compared to £0.8083 at the previous close.