Europe

Swedish bank Skandinaviska Enskilda Banken said Monday that it swung to a second-quarter loss due to soaring bad debt charges in the Baltic countries and goodwill write-offs from its acquisitions in the region, MarketWatch reported. The group reported a net loss of 193 million Swedish kronor ($24.8 million) for the second quarter, compared to a profit of 2.81 billion kronor a year earlier. The loss was largely due to a surge in credit provisions -- or charges to cover customers who couldn't repay loans -- which jumped to 3.57 billion kronor from 448 million kronor.

Germany's government sent a message to General Motors Co. on Wednesday: If GM sells its European car business to anyone other than Magna International Inc., then Germany might withdraw its offer of state aid, The Wall Street Journal reported. The warning comes as German politicians grow increasingly nervous about who will win the auction for GM's European operations, centered on its Opel brand, a major employer in Germany and several other European countries. Germany's strong hint could bolster Magna's chances, despite intense interest from other parties.

Russia’s economy shrank 10.1 per cent in the first half of this year, the economy minister said on Wednesday, its worst decline since the early 1990s. The credit crunch, falling commodity prices and a gradual rouble devaluation have shattered 10 years of rapid growth but there are signs that the pace of economic decline is slowing, the Financial Times reported.

Administrators representing Lehman Brothers Holdings Inc.'s main European unit have set forth a plan to return about $13 billion in client funds that have been in legal limbo since the investment bank collapsed last September, The Wall Street Journal reported. Under the U.K. court filing made Wednesday, roughly 1,000 clients still owed money by Lehman's European arm have until the end of 2009 to submit their claims. The plan, which requires court approval, targets the first quarter of 2010 for those assets to be returned.

After quitting his job as a senior engineer at Chrysler to join China's fledgling domestic auto industry, Frank Zhao had a stark premonition. “I saw the end of Detroit," says 45-year-old Mr. Zhao, who now supervises 1,200 engineers building a new generation of vehicles for Geely Holding Group Co., one of China's top-selling brands. Geely, with a group of financial backers, is now considered a front-runner in the bidding for Ford Motor Co.'s Volvo unit, The Wall Street Journal reported. A decision could come in the next several weeks, according to people familiar with the situation.

Russian developer RTM, which is struggling to restructure debts, has filed for bankruptcy in the Moscow Arbitration Court, the court said on Wednesday. RTM spokesman Viktor Belyonyshev confirmed the company had submitted the filing which is the first bankruptcy filing by a public Russian developer, Reuters reported. Read more.

General Motors’ plan to sell its European operations to a Canadian auto parts maker and a Russian bank appeared Monday to be in trouble, when another bidder said it was nearing a deal for the unit, The New York Times reported. R.H.J. International, a Brussels-listed industrial holding company, said in a statement that it was in talks with G.M. for the acquisition of a majority stake in the European subsidiary, Adam Opel, which includes the operations of Vauxhall in Britain.

ING Groep NV, the biggest financial-services company in the Netherlands, was told by European Union regulators that there are “doubts” about whether a government restructuring plan for the lender will be approved, Bloomberg reported. The European Commission is questioning the Netherlands’ valuation methodology for illiquid assets in ING’s portfolio, the EU said July 11 on its Web site. The commission gave temporary approval to the Dutch government’s “illiquid assets back-up facility” on March 31.

The French are getting thriftier, and that poses a problem for the European economy, The Wall Street Journal reported. For more than a decade, consumer spending has driven growth in France and buoyed the economy of the nations -- now 16 -- that share the euro. The danger for France and for Europe is that this turns into a longer-term trend.

Households across Europe anticipate saving a lot less than they did over the past year, and many are more inclined to deposit such savings at a bank, not to boost exposure to stocks, according to a new survey. The survey, conducted in March, is one of the first to document the effect on savings and investing activity by individuals as many stock markets world-wide were continuing to fall, but poised for rebounds that have taken them significantly off their lows.