Telegraph

Britain's taxpayer-backed lenders, Lloyds and Royal Bank of Scotland, could see their profits slashed following a downgrade of their credit ratings. Lloyds and RBS are set to be among the banks hardest hit by the planned dowgrades by Moody's, the most important of the three established ratings agencies.

Bloomberg

The U.K. must accept substantial losses on its stakes in Lloyds Banking Group Plc (LLOY) and Royal Bank of Scotland Group Plc (RBS) if the government is to sell off its holdings within five years, say Britain's biggest investors.

Bloomberg

BT to Pay 2 Billion Pounds Into Pension Fund to Cut Deficit- BT Group Plc (BT/A) plans to pay down about half of its 4.1 billion-pound ($6.5 billion) deficit before the end of March 2012, allowing the U.K.'s largest fixed- line phone company to consider a higher dividend. The stock rose as much as 5.1 percent in London, the biggest increase in more than 5 months.

Bloomberg

The administrator of Lehman Brothers Holdings Inc. (LEHMQ)'s London unit said it will start returning money to creditors before the end of 2012, more than three-and-a-half years after the bank's collapse sparked a global financial crisis. The interim distribution was announced by Lehman Brothers International Europe's administrator PricewaterhouseCoopers LLP in a report on its progress today. The firm didn't say how much would be paid out.

Telegraph

The flagship scheme designed to revitalise the housing market and kick-start the economy is in disarray, as mortgage lenders fail to support it. The NewBuy Guarantee, launched by David Cameron in a blaze of publicity, is "not at all what was envisaged", the head of the Home Builders Federation (HBF) said.

Telegraph

City of London police have been asked to investigate an alleged fraud at spread-better WorldSpreads. The company was put into administration late on Sunday after a £13m "black hole" was found in the accounts, putting around 15,000 clients – mostly retail customers – at risk of losing almost half their money.