Headlines

Banco Sabadell’s third-quarter net profit fell 77% from a year ago due to higher provisions, and the Spanish lender on Friday announced an efficiency plan, entailing yet unspecified job cuts in Spain, to counter the impact of the coronavirus pandemic, Reuters reported. Overall loan loss provisions in the July-September period rose to 302 million euros ($357 million) from 194 million euros a year ago. Still, Spain’s fifth-largest lender beat market expectations thanks to a recovery in its banking activity, both in new mortgage and consumer lending.

Chinese financial institutions, not only the country’s official creditors, are working to help ease the debt woes of African nations, which have worsened due to the pandemic-induced global economic downturn, Beijing’s top Africa diplomat said on Friday, Reuters reported. China, Africa’s largest creditor, has agreed to take part in a World Bank and International Monetary Fund-supported initiative to suspend debt service on official bilateral debt for poorer countries.

After 14 years of construction and six delayed openings, Berlin’s new airport is due to welcome its first passengers on Saturday. But the timing could not be worse, Reuters reported. The COVID-19 pandemic has plunged the global aviation industry into its deepest ever crisis, and recovery is not expected for at least a couple of years. That has left the new airport, originally called Berlin Brandenburg Airport but now known by its code BER, looking for extra funds to help pay its debts. Built on the site of Schoenefeld airport in former East Berlin, BER has been beset by problems.

British Land and Land Securities are among the landlords that have challenged New Look’s company voluntary arrangement, casting renewed doubt over the survival of the fashion chain, the Financial Times reported. The CVA, a type of insolvency process that usually results in landlords agreeing hefty rent cuts, was approved by creditors in September but the statutory challenge period ran until the middle of October. Three people with knowledge of the process said that there had been four separate challenges.

Wealthy nations grouped together in the Paris Club of creditors have waived Cuba’s annual payment for restructured debt but plan to impose a penalty on the Communist–run island, according to five Western diplomats with knowledge of the situation, Reuters reported. This year marks the first time Cuba has missed the entire payment due by Oct. 31 since the restructuring agreement was signed in 2015, though it fell short of full payment last year as well. The accord, signed in tandem with the U.S.

Growing coronavirus infection numbers are putting at risk the prospects for continued economic recovery in Italy and the euro zone as a whole, Bank of Italy Governor Ignazio Visco said on Friday, Reuters reported. In a speech to bankers in Rome, Visco, who sits on the European Central Bank’s governing council, also said the risk of deflation in the euro zone has declined compared with six months ago but must still not be ignored.

Air France-KLM unveiled a 1.05 billion-euro ($1.24 billion) quarterly operating loss and warned of worse to come as a resurgent coronavirus brings new travel curbs, Reuters reported. Shares in the Franco-Dutch airline group fell after it reported a 67% drop in third-quarter revenue to 2.52 billion euros on Friday, as France returned to full lockdown for at least a month. New COVID-19 outbreaks pose a threat to network airlines already weakened by the crisis and long-haul travel collapse.

Tax experts have warned that an incoming law which moves HM Revenue & Customs higher up the list of creditors in insolvencies could further damage the economy and cause more companies to go bust, the Financial Times reported. From December 1, the UK tax authority will be ranked higher in the pecking order used to decide which creditors get paid first when a company fails. The change applies to unpaid VAT, income tax, employee’s national insurance, student loan deductions and Construction Industry Scheme deductions, but not corporation tax.

The number of companies in significant financial distress has risen at the fastest rate for three years as businesses face increasing difficulties given the end of many government Covid-19 business support schemes, the Financial Times reported. More than half a million companies were in “significant distress” in the three months to September, based on data from court orders to pay off debts, according to corporate restructuring firm Begbies Traynor.

The South African government pledged to freeze public sector wages for the next three years to contain a yawning budget deficit but forecast that debt would peak at a higher level in a mid-term budget unveiled on Wednesday, Reuters reported. Africa’s most industrialised economy was already in recession before the COVID-19 pandemic struck, and one of the world’s strictest lockdowns has exacerbated its woes. The wage-freeze plan raises the risk of strikes by the country’s 1.3 million civil servants and follows a pledge in February by Finance Minister Tito Mboweni to curb a rising wage bill.