Germany

A sharp fall in German factory orders has confounded hopes of a rebound in the eurozone economy as the head of the European Central Bank warned that it had limited scope to cut interest rates further, the Financial Times reported. Christine Lagarde said on Thursday that the low rates, low inflation and low growth environment in the eurozone had “significantly reduced the scope for the ECB and other central banks worldwide to ease monetary policy” if another crisis was to strike.

Germany’s government has proposed a clampdown on anti-competitive behaviour by digital platforms, putting Berlin in the vanguard of European efforts to regulate companies including Google and Amazon, the Financial Times reported. The draft “digital law” will strengthen the intervention powers of Germany’s competition watchdog, the Federal Cartel Office. Peter Altmaier, the economy minister, said the measures would “toughen control of abusive practices for big market-dominating digital companies”.

Dublin-based Depfa Bank’s weakness as a “structurally lossmaking” business has been highlighted by two debt-ratings firms as the German government pursues a second attempt to sell the company, The Irish Times reported. “Given that Depfa’s recurring revenue is insufficient to cover its cost base, we believe that – without outside assistance – Depfa has limited scope to engineer a sustainable turnaround and will therefore likely remain lossmaking in the medium to long term, although there may be potential to reduce losses,” Moody’s said in a note published last week.

Leoni AG, a 450-year-old company that traces its roots to precious-metal threads for embroidery, is seeking salvation through an unusual modern financing tool, Bloomberg News reported. The worst performing stock among major companies in Germany in the last year, Leoni is considering an audacious refinancing package, in part by preparing to sell about 200 million euros ($220 million) worth of receivables. It’s a transaction known as factoring that would let it pay back a 170-million-euro Schuldschein, or promissory note, due in March.

Deutsche Bank reported a whopping loss for the last three months of 2019 and for the full year as it cut staff and wrote down the value of assets, affirming its status as one of Europe’s most troubled big lenders, the International New York Times reported. The bank said it lost 1.5 billion euros, or $1.6 billion, in the last three months of 2019, bringing the total loss for the year to €5.3 billion. In 2018, the bank effectively broke even for the year and in the fourth quarter.

Germany is working on a draft law on reducing risks in the banking sector which foresees the participation of creditors and shareholders in the event of a bankruptcy, the finance ministry said on Tuesday, Reuters reported. The draft law provides for big banks to put aside 8% of their balance sheet total as a buffer during a crisis, the finance ministry said. The draft law is meant to implement parts of a wider European Union package of banking rules, which was agreed by member states last year, into national law.

German business confidence unexpectedly dropped in January, cooling hopes that the downturn in the export-led manufacturing sector was on track to stabilise, the Financial Times reported. The Ifo Institute, a Munich-based think-tank, said its measure showing sentiment among the 9,000 German companies it surveys every month had declined to 95.9 in January, from 96.3 in December. That contrasts to economists’ expectations in a Reuters poll of a rise to 97.

Polish carrier LOT is acquiring Thomas Cook’s German airline Condor, creating a leading aviation group in Europe carrying more than 20 million passengers a year, the companies said on Friday. Condor, which according to sources was sold for about 300 million euros ($333 million), operates a fleet of more than 50 aircraft while LOT has a fleet of 80 aircraft, Reuters reported. LOT chief executive Rafal Milczarski said he sees a possible order of around 30 planes from Boeing and Airbus.

Deutsche Bank AG and a Singapore based hedge fund bought more debt of an embattled Indian shadow lender, highlighting the growing foreign interest in the discounted assets of the financier at the center of a credit crisis, Bloomberg News reported. Deutsche Bank has almost doubled the debt it holds of Altico Capital India Ltd. to 3 billion rupees ($42.1 million) in the last four months, while Singapore-based Broad Peak Investment Advisers Ltd. has acquired debt of about 1 billion rupees, people familiar with the matter said.

Deutsche Bank AG has moved an insolvency application against Uttam Galva Steels Ltd. at the National Company Law Tribunal to recover dues against the foreign currency-denominated loans its Singapore branch extended, BloombergQuint reported. Uttam Galva Steels—which had entered into a $20-million credit facility agreement with the lender for its capital and operational needs—had challenged the maintainability of the bank’s application under section 7 of the Insolvency and Bankruptcy Code. The section allows financial creditors to file insolvency application.