Banks - it's a bad bad world out there

Anglo Irish Bank's former chairman, Sean FitzPatrick, has been arrested by police in connection with a fraud investigation into personal loans of more than £60m alleged to have been hidden from shareholders. Investigators are reported to have found evidence that Mr FitzPatrick transferred tens of millions of pounds of loans made to him by Anglo Irish Bank to Irish Nationwide, days before AIB published its annual accounts.

Bank of England has reported that bank lending to British businesses decreased by £6.5bn in January 2010, its fastest annual decline in a decade. The figure was also the largest monthly fall in net lending since July 2009 and reflected a 9.3% decrease over the past 12 months.

Co-operative Bank has posted a 43% increase in pre-tax profit in 2009 to £213m, following customer defections from traditional banks during the year. The group increased its market share of current accounts by 50% to 4%, opening 38% more accounts, or 150,000.

Lehman Brothers has accused Barclays of receiving a windfall profit worth billions from the deal to acquire its brokerage unit in September 2008. In court documents filed yesterday, the investment bank claims that Barclays received a $13bn windfall 'immediately upon acquisition'.

Lloyds Banking Group's former head of tax compliance, Andrew Constantine, has accused the bank of artificially inflating its profits by almost £1bn through the use of aggressive tax-avoidance schemes and 'Lehman-style' offshore deals. Mr Constantine told an employment tribunal that the bank refused to listen to staff who voiced concerns about the tactics adopted by the finance department, or institute reforms that would put its finances on a legal footing.

Royal Bank of Scotland deputy chief executive, Gordon Pell, is set to retire in March 2010 with a pension worth more than £13m. Meanwhile, the bank admitted it has a pension deficit of £2.91bn, and has plans for a new long-term bonus plan that could lead to executives being rewarded with shares worth up to five times their annual salaries if performance targets are met.