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Business: News In Brief

Wednesday, August 11, 1999 Published at 17:44 GMT 18:44 UK

Online accounts race hots up

Royal Bank of Scotland is setting up an Internet savings account in competition with Prudential's Egg bank account.

The "Direct Saver" account will allow customers to carry out all their banking activities online.

It will pay interest of 4% - rising to 5% on amounts over 50,000.

Further Internet initiatives, including online mortgage sales, are expected to be added next year.

Prudential shook up the banking sector with the launch of Egg in 1998 - and has attracted more than 500,000 customers.

Dresdner aims for US expansion

Dresdner Bank's net profits rose 6.7% in the first half, in line with expectations, but the bank was not as optimistic for the full year.

Dresdner Bank reported a 101% rise in trading profits to 749m euro (493.3m).

In its interim report, the bank warned that "any extrapolation of results for the first six months on to the year as a whole (are) overly optimistic."

Chairman Bernhard Walter said that expansion of Dresdner's investment banking activities in the US was "a clear priority."

He said this would be possible through external growth, or acquisitions, but stressed the bank was not under any time pressure.

He added that increasing Dresdner's market share in Germany and in core countries of Europe were also Dresdner's top priorities.

France, Italy and Spain are target countries for Dresdner's expansion.

He also promised shareholders that the bank's after-tax return on equity would have reached at least 15% by the year 2003.

He repeated that Dresdner and Banque Nationale de Paris have been in "intensive talks" for quite some time on how to "expand significantly" their current cooperation agreement.

Dresdner and BNP have stakes of 1% in each other. They co-operate in markets outside of France and Germany.

Ericsson contract in Turkey

Swedish telecoms group Ericsson has clinched a $550m contract from Turkey's leading cellular operator Turkcell.

The order is for the expansion of Turkcell's existing GSM network and will increase capacity to around seven million users from five million today.

Ericsson will also supply solutions for enhanced wireless datacom solutions.

Bowling alleys are sold

One of the UK's leading bowling alley businesses, First Leisure, is selling its family entertainment division for 111.5m.

First Leisure, headed by former Channel 4 boss Michael Grade, is to sell the business to rival group Allied Leisure and an investment company.

The deal will see Allied Leisure seize the lead in Britain's bowling industry, taking over the management of First Leisure's Superbowl entertainment centres.

The deal covers 31 tenpin bowling alleys owned by First Leisure including three under construction. The larger sites include other entertainments such as amusement machines and pool tables.

Allied Leisure already owns 29 Megabowl bowling alleys. Under the deal First Leisure is also selling the Trecco Bay caravan park near Porthcawl in South Wales and the indoor winter sports centre Snowdome near Tamworth, Staffordshire.

First Leisure will be left with its health and fitness clubs, nightclubs and bars.

United fails to reassure investors

United Assurance's shares fell sharply on Friday as its first half results came in below expectations.

United, the result of the 1996 merger of United Friendly and Refuge Assurance, said first half underlying operating profits fell a worse than expected 36% to 124.6m as reorganisation moves announced earlier this year disrupted sales.

The group said that after a "disappointing" 14% rise in new sales - some other insurers have reported sales rises of over 30% - the outlook for the second half was better.

One analyst said the company's prospects in an increasingly competitive low-margin marketplace looked dim, however.

Even the 10m reduction in the forecast cost of the reorganisation to 52m failed to cheer investors.

In an effort to put itself back on the right path the company earlier this year announced a wide-reaching rationalisation and modernisation of its operations, including the cessation of speculative door-to-door sales, and over 1,000 job losses.

United upped its provision for pensions miss-selling by 23.4m to 210.4m. Its shares dropped from 413p to 383.5p.

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