Facebook failure to share with IRS could backfire 2 Aug 2016 The $360 bln social network ignored seven summonses from U.S. tax investigators. Now it says it could owe $5 bln if the IRS prevails. The trouble is, too many cross-border tax games are legal. Maybe Facebook's seeming arrogance will hasten a revamp at home and abroad.
Bavaria-Prussia spat adds odd twist to VW scandal 2 Aug 2016 History hangs over Bavaria's plan to sue the partly state-owned group that is based in former Prussia, an old rival. Such a clash would also pitch Catholic Conservatives against Protestant Social Democrats. Yet a weaker VW would also hurt Bavaria, home of Audi and MAN.
Shave Club syndrome nicks P&G makeover 2 Aug 2016 New CEO David Taylor has spruced up the $230 bln Tide-to-Pampers behemoth, but it's struggling to boost sales. Now internet-savvy upstarts like Dollar Shave Club, recently bought by Unilever, threaten to steal customers and take a razor to margins in P&G's better-looking units.
Intesa has grounds to reject calls for full Monte 2 Aug 2016 The Italian bank's CEO has slammed analysts for questioning if the bank needs higher provisions to match bailed-out Monte dei Paschi. As stress tests just showed, Intesa is swimming in capital and bad debts are down. Markets may set higher benchmarks for its less healthy peers.
Commerz lays bare market over-optimism on EU banks 2 Aug 2016 The German bank says negative rates will further weigh on revenues. Investors are already braced for low returns: Commerzbank trades at 0.3 times book. Still, with analysts' earnings forecasts almost twice those assumed in the EU stress test, even more caution is warranted.
UK banks’ light at the end of PPI tunnel darkens 2 Aug 2016 British lenders smarting from Brexit and EU stress tests face redress for mis-sold loan insurance lasting a year longer than expected. An actual cut-off date beats none at all. But the delay means fines relating to commission mis-selling will further inflate PPI's $32 bln cost.
BMW’s big electric car gamble begins to pay off 2 Aug 2016 The German carmaker invested early and heavily in this new technology. Now better batteries and state subsidies are boosting sales. In the Netherlands, 15 percent of all BMWs sold are already electric. But the group's head start has yet to be fully reflected in its share price.
Abu Dhabi SWF yet to get the memo on transparency 2 Aug 2016 The annual review of the emirate's ADIA fund contains few facts about performance, or the scale of its assets. The sheikhdom's secrecy is not unusual, and fine when times are good. But with oil prices low, markets and bankers alike have a case for greater transparency.
Regions will shore up China’s smaller banks 2 Aug 2016 Risk is mounting at midsized lenders, and capital buffers are eroding. Beijing wants to rein the upstarts in, but provinces need regional financial champions to keep lending. As Industrial Bank raises nearly $4bln from backers in Fujian, expect others to follow suit.
Uber can take fight for rest of Asia up a gear 2 Aug 2016 After folding its China unit into rival Didi, the ride-hailing app can compete harder elsewhere in Asia. It is less far behind India's Ola and Grab in Southeast Asia. Uber must balance the conflicts this could create with Didi with the need to show global growth.
Uber and Didi carve up antitrust arbitrage 1 Aug 2016 Economies of scale help ride-hailing apps gain dominance. By trading its Chinese unit for a stake in local rival Didi, Uber is creating value but also conflicts of interest. Lags in antitrust law are one more aspect of regulation for Uber - and others - to take advantage of.
Verizon’s auto-tech roll-up makes a bit more sense 1 Aug 2016 The $2.4 bln purchase of Fleetmatics is another move to bolster an area that can potentially help offset declines in Verizon's core business. Combining it with Telogis, the deal carries more logic than last week's acquisition of Yahoo's sagging internet assets at twice the price.
Tesla makes best of perplexing SolarCity deal 1 Aug 2016 At $2.6 bln, Elon Musk's electric-car pioneer is paying less than expected for his solar-panel installer. The boards have done the right things to manage conflicts. There's overlap between Tesla's battery unit and SolarCity. But diluting the ambitious automaker's focus is risky.
Qatar picks good time to extend hazy strategy 1 Aug 2016 The Gulf state's airline has topped up its share in British Airways-owner IAG to 20 pct. The move generates little extra practical benefit, and the rationale is still less than convincing. But the weak pound and a fall in IAG's shares make it a relatively pain-free step to take.
Heineken’s challenge is to keep glass half full 1 Aug 2016 The Dutch brewer's operating profit was strong, thanks to stellar Asian growth. But first-half revenue fell short of expectations. Headaches in Africa show that its reliance on emerging markets comes with a snakebite of currency, macroeconomic and geopolitical hazards.
Weaker banks are in EU’s core, not its periphery 1 Aug 2016 A dozen lenders had sub-10 percent post-stress capital ratios and a 400-plus bps loss in the EBA's stress test. Only a third are from troubled "periphery" states like Italy. Perhaps core states should become less sniffy about a Europe-wide deposit protection scheme.
ECB’s MPS kid gloves are a necessary evil 1 Aug 2016 The European Central Bank allowed Monte dei Paschi to disregard losses on a 10 billion euro bad debt sale for internal models. Giving banks a get out of jail card could incentivise bad lending. But cleaning up MPS is critical, and not many other banks will be in a rush to copy.
Uber reverses out of dead end in China 1 Aug 2016 The U.S. ride-hailing app is handing Uber China to larger local rival Didi Chuxing. In exchange, Uber gets 20 pct of an enlarged $35 bln group. It's a humiliating reversal after a high-profile battle. The combined group can cut back on subsidies and focus on turning a profit.