Friday's business news

British Airways posts better-than-expected results; Banks suffer as customers reclaim "unfair" charges; Co-operative Group to manufacture its own prescription drugs.

British Airways received a much-needed boost today after better-than-expected first quarter results caused its shares to surge.

The improvement in profits to £289m offset lower guidance on revenues growth, which reflects the impact of soaring fuel prices and the weak dollar. BA, fined £270m earlier this week for colluding on passenger and cargo flight pricing, saw shares rise 9p to 412.75p.

The rest of the market showed signs of ending recent volatility, with the FTSE 100 Index up for much of the first hour of trading before easing slightly to stand 10.4 points lower at 6290.1 by mid-morning.

Customers reclaiming "unfair" overdraft fee and interest charges cost the UK’s biggest banks nearly £400m in the first six months of the year alone, it was revealed today.

NatWest parent Royal Bank of Scotland was the latest banking giant to disclose its liability for so-called "goodwill" current account administration charges as it unveiled half-year results showing it forked out £81m in refunds in the six months to June 30.

RBS’s figure takes the total paid out by the country’s "big five" banks to £399m - double that originally estimated by analysts.

The Co-operative Group today said it is to start manufacturing its own prescription drugs after unveiling a partnership with one of China’s leading pharmaceutical firms.

The Co-op’s subsidiary Sants will invest £20m in the development of a new manufacturing facility in Tianjin as part of an agreement with Tasly Group, which is also one of China’s major herbal medicine producers.

The move will give the Co-op, which operates more than 600 pharmacies in the UK as well as a pharmaceutical wholesaling business, greater control over its supply chain.

It will also allow it to safeguard profitability amid increasing Government pressure to lower the wholesale costs of prescription drugs.

The pound at noon was US$2.0352 compared to US$2.0343 at the previous close while the euro at noon was £0.6727 compared to £0.6730 at the previous close.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer