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Deutsche Lufthansa AG warned that compulsory dismissals are likely in Germany amid slow progress in talks with unions, stiffening its tone as it braces for years of reduced demand, Bloomberg News reported. Europe’s biggest airline posted an adjusted operating loss of 1.7 billion euros ($2 billion) in the second quarter -- its biggest ever -- wrapping up a dismal set of results for carriers in the region after the coronavirus grounded virtually all passenger flights.
Allied Irish Banks has taken a €1.2bn charge to cover coronavirus loan losses as the country’s largest lender by market capitalisation faces “severe and rapid deterioration” in economic conditions due the pandemic, the Financial Times reported. AIB said the charge, higher than analysts had anticipated, would represent the “significant majority” of full-year loan losses, as it forecast declining interest and fee income this year. Colin Hunt, chief executive, said the bank had adopted a “very conservative and prudent approach” to provisioning in the first half.
Vacancies at offices in central Tokyo rose by the most on record in July as the economic impact of the coronavirus pandemic continued to spread and virus-related bankruptcies in the capital reached 100, Bloomberg News reported. Office vacancies in five of Tokyo’s major business districts increased for a record fifth consecutive month, rising to 2.77% from 1.97% in June, real estate brokerage Miki Shoji Co. said on Thursday. It was the largest one-month gain on record, beating a high set in 2009 in the aftermath of the global financial crisis.
Wirecard AG’s spectacular collapse is leaving a gaping hole in the income statements of its European banks, Bloomberg News reported. While only three of the biggest lenders to the German payments company have reported earnings so far, all wrote down virtually their entire exposure. Commerzbank AG and ING Groep NV each took a hit of about 175 million euros ($207 million), according to people familiar with the matter, more than half of their profit for the second quarter. Credit Agricole SA suffered a loss of about 110 million euros.
Vodafone Idea Ltd., the beleaguered Indian wireless carrier facing a government demand for billions of dollars in back fees, reported an eighth straight quarterly loss and said a court verdict on a staggered payment plan for the dues is critical for survival, Bloomberg News reported. Net loss was 254.6 billion rupees ($3.4 billion) in the three months ended June, the country’s No. 3 mobile phone carrier said Thursday. It took a one-time charge of 194.4 billion rupees for back fees paid.
India’s banking regulator gave lenders power to restructure certain loans, as authorities look to support an economy hit by the pandemic while ensuring the stability of a financial sector where bad-debt is set to swell to a two-decade high, Bloomberg News reported. Ahead of the expiry of a blanket loan moratorium later this month, the Reserve Bank of India said it will permit banks to strike rescheduling agreements with borrowers that were on track to repay their loans on March 1, in the early days of the coronavirus outbreak.
A Brazilian high court ruled on Thursday that the 11 billion reais ($2 billion) debt owed by bankrupt telecom Grupo Oi SA to Brazil’s telecommunications regulator Anatel will not get preferential treatment in restructuring negotiations, Reuters reported. The Superior Court of Justice, known as STJ, Brazil’s second-highest court, ruled that the debt was administrative and could not be given priority treatment. Brazil’s biggest fixed-line telecommunications operator filed for bankruptcy protection in June 2016. Oi had about 65 billion reais of debt at the time.
The planned business rescue of South African Airways is in limbo because government attempts to raise 5.3 billion rand ($307 million) of immediate funding from commercial banks failed to elicit a response, a person familiar with the situation said, Bloomberg News reported. The administrators of the state-owned airline can’t hand over the business to management because it is insolvent, the person said.
As emergency services assess the toll from Tuesday’s deadly explosion in Beirut, one immediate consequence is becoming clear to analysts: it will ratchet up pressure on Prime Minister Hassan Diab to make meaningful progress in talks with international lenders and investors, Bloomberg News reported. For some observers, that means quickly addressing the internal divisions and foot-dragging that have stalled negotiations with the International Monetary Fund about a $10 billion loan program following the country’s March Eurobond default.