The Portuguese bank made a 3.6 bln euro first-half loss and warned of possible illegal activity. The central bank suspended key staff. BES needs capital fast. But with Angolan issues unresolved, sourcing it from private investors rather than creditors just got much harder.
The French bank has suffered its biggest-ever quarterly loss, at 4.2 bln euros, after a jumbo U.S. fine. BNP delivered a strong performance otherwise and says it has learned from the affair. And yet no one is being held accountable for the wrongdoing – or a weak valuation.
The Japanese chat app reported a 26 pct jump in revenue from the previous quarter, pushing up valuation expectations ahead of its planned IPO. Yet Line’s valuation hangs on an assumption that new overseas users will spend like those back home. That seems like wishful thinking.
The conglomerate is set to spin off Synchrony at some 11 times 2013 income, a small discount to Discover. But GE’s store-branded credit card business is riskier. A rise in charge-offs, currently near lows, could hit the unit quick and hard. That makes the offering look pricey.
Q2 output rebounded strongly, with 4 pct annualized growth by early estimates, after shrinking in Q1. With 2011-13 expansion smoothed and pared to 2 pct on average, the underlying message – for everything from the economy to jobs and inflation – remains one of tame upward drift.
The Bank of England is beginning to wonder why wages aren’t rising. Just delay? Or something structural? It’s both. Self-employment explains almost all the gain in jobs. Austerity cuts and recession have bitten hard. Pay, inflation and interest rates will take time to recover.
U.S. authorities are letting Windstream call its telecom cables real estate, qualifying them for tax breaks. And a partnership will shield Hess assets from the IRS. Politicians, though, are indignant over firms that move overseas – even when home-grown tax loopholes are costlier.
UK bank regulators are mulling fresh ways to defer executive pay and clarify lines of accountability. The ideas mostly make sense, apart from clawback rules which may backfire. Yet they could worsen the already existing talent shortage at the top of British banks.
A quest for tax savings has made digestible overseas targets attractive to U.S. buyers. Hospira’s potential $5 bln deal for a Danone unit highlights a fresh supply, for so-called “spinversions.” The odd combination also reflects the perverse incentives distorting corporate decisions.