City Republic: Tesco could gain from financial market woes

But actually there is.

RBS is currently trying to sell its own insurance businesses Direct Line and Churchill for £7bn to top up its capital on top of the £12bn it has asked shareholders for.

So, on the face of it, it's not surprising that it's ready to trouser £1bn from Tesco.

But apparently this deal was Tesco's idea, not RBS'.

Tesco is faced with narrowing margins and limited growth opportunities in its core UK grocery business, although it's expanding aggressively overseas in the US, Eastern Europe and the Far East.

It's also trying to boost its online retailing business and has snapped up most of the Dobbies garden centre chain.

But, with around 30% of the UK grocery business, it's in receipt of a tidal wave of money and that's just what you need to expand in insurance.

And, indeed, loans and mortgages.

The financial sector, particularly mortgages, is shot to pieces at the moment but, sometime or other, it will recover.

Tesco Personal Finance already makes £130m profit and there are plenty of potential acquisitions around that can make much more for Tesco, one of the few companies with a toe in the financial sector that doesn't need to go cap in hand to the wholesale money markets to borrow money.

And Tesco doesn't do small (although it's quite happy to start that way in new market sectors).

We could be seeing the next stage in the growth of a financial giant.

Does RBS really want to sell Direct Line?
RBS does world domination just like Tesco and the reason it might have wanted to hang on to its Tesco Personal Finance stake is to share in the upside coming from a major new player (it's still going to provide banking services, until Tesco buys a bank of course).

So does CEO Sir Fred Goodwin really want to sell two of the best general insurance businesses around?

His shareholders think he does and they're getting impatient. They wouldn't have been best pleased to read unconfirmed reports over the weekend that RBS had turned down £6bn of US investor Warren Buffett's cash for the businesses.

No one else seem prepared to go that high.

The £12bn RBS wants from shareholders is already fully underwritten by investment banks, so that's on its way, and it's also trying to sell its train leasing business for £4bn.

Does it actually need another £7bn from the insurance sale?

Or is it dragging out the sale process until things improve and it can say it doesn't need the money, a pretty staggering £23bn in total.

RBS' next trading statement is likely to produce fireworks, either way.

TV advertising: crisis, what crisis?

They do say that TV advertising takes a sharp nosedive immediately before a recession but, according to some buyers, so far it hasn't.

None other than WPP's Sir Martin Sorrell reported recently that European revenues had picked up a bit after a bad March and it's fair to say that most media agency bosses in the UK aren't thinking of giving up the day job just yet.

But all the indicators seem to show that a nasty slowdown is on the way (falling house prices, rising inflation, the beginnings of a rise in unemployment).

So why isn't TV revenue falling off a cliff? Especially as it's under ever-more pressure from the internet?

Well, bits of the economy are doing OK, particularly manufacturing, which is benefiting from the falling pound, making exports more competitive.

But finance and retail are basket cases (would you like your biggest account to be a furniture retailer?) and not likely to improve for at least a year.

Actually online might just turn out to be the saviour of TV this time round. Online may, as many people suspect, take over from TV as the biggest ad medium this year, but a lot of this is search.

The big consumer websites need to drive people to their sites and the way they do this, as weary viewers know, is by saturating cheap airtime (and, increasingly, some of the premium stuff too).

And every time that moneysupermarket or whomever ups the advertising ante, those companies who don't play the price comparison game, like Direct Line, have to spend more too.

On the telly it seems.

The end of a sorry radio saga

Scottish Media Group is selling Virgin Radio for £50m to a group led by Times of India for £50m, around a quarter of the £200m it gave to Chris Evans' Ginger Media Group in 2000.

At the time, Ginger also included a booming TV production company promoting Evans' talents. Evans is a Radio 2 DJ these days.

Apparently, SMG is planning to invest a less than handsome £1.7m in its remaining Scottish TV business after paying off the bank and its pension fund.

It couldn't be much worse but at least they're shot of it.

Quite what the Times of India is thinking I have no idea.

Stephen Foster is a former news editor of Campaign, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog www.editco.net and Politics of the Media for Brand Republic.