Headlines

Virgin Money has reported a sharp increase in provisions for defaults on mortgage loans, as fears grow about the impact the coronavirus pandemic will have on UK unemployment levels, the Financial Times reported. The UK’s sixth-largest bank said it had yet to see many specific credit losses across its loanbook due to forbearance measures such as loan holidays and free overdrafts, but topped up its provisions for potential future losses by £42m to reflect a weaker economic outlook.

Argentina will seek a new program with the International Monetary Fund whatever the outcome of talks with holders of its $65 billion of defaulted overseas bonds, Economy minister Martin Guzman said, Bloomberg News reported. Guzman also reiterated that the country has reached the upper limit in what it’s prepared to offer creditors, though said the government would consider improving the legal terms of the offer.

The European Central Bank has called on lenders to continue to freeze dividend payments until at least January and urged them to be “extremely moderate” when setting staff bonuses during the coronavirus pandemic, the Financial Times reported. The recommendations from the central bank are designed to help banks absorb losses and support lending throughout the crisis, which has left the eurozone economy facing a severe recession.

Nissan Motor Co warned of a record $4.5 billion (3.49 billion pounds) operating loss this year and its lowest sales in a decade as the COVID-19 pandemic hampers its turnaround efforts, Reuters reported. Japan’s No.2 carmaker is battling to recover from a rapid expansion that has left it with dismal margins and an ageing portfolio, as well as revive its alliance with Renault that was rocked by the arrest of long-time boss Carlos Ghosn.

More than £50bn has been borrowed by British businesses struggling to survive the pandemic in government-backed debt, showing the continued need for support for companies even as lockdown measures are eased, the Financial Times reported. The Treasury said on Tuesday that close to 1.2m businesses had taken bank bailout loans and other debt that were partly or fully guaranteed by the government.

Lebanon may only count on the International Monetary Fund for as little as half the bailout it had originally sought to help unlock other assistance the country critically needs to bridge the crisis, according to a top official, Bloomberg News reported. With talks over a $10 billion loan program stalling for much of this month, the IMF could provide an amount in a range of $5 billion to $9 billion, Economy Minister Raoul Nehme said in an interview with Bloomberg Television. Although Lebanon’s economic collapse is accelerating, Nehme gave no time frame for when a deal might be reached.

Mexican airline Aeromexico, which is in a Chapter 11 restructuring process, said on Tuesday it posted a $1.2 billion net loss for the second quarter and laid off about 2,000 workers as the coronavirus pandemic roils the airline industry, Reuters reported. “The commercial aviation industry faces unprecedented challenges stemming from a significant reduction in passenger demand worldwide,” the firm said in a statement.

U.K. discount retailer Matalan will file for Chapter 15 court protection in the U.S. on Wednesday as part of broader measures to buttress its balance sheet in the aftermath of pandemic-inflicted closures, Bloomberg News reported. The company will seek “certain interim relief” under Chapter 15 and recognition for its debt restructuring in the U.K., according to a statement Tuesday. Chapter 15 of U.S. bankruptcy law shields foreign companies from lawsuits by U.S. creditors while they reorganize in another country. The retailer used a U.K. court procedure known as a scheme of arrangement.

A property investor is suing developer Greg Kavanagh for €6.4 million over alleged default on a debt related to loans to his company and personal guarantees, The Irish Times reoprted. Anne O’Neill, Mount Pleasant Square, Dublin, is seeking summary judgment for the money against Mr Kavanagh, of Shaw’s Lane, Bath Avenue, Dublin. She claims he failed to meet a demand for repayment issued last May and has brought High Court proceedings.

Covid-19 flight groundings pushed Ryanair to a €185m loss in the three months to June, as 99 per cent of the fleet stayed stuck on the tarmac from mid-March on, the Financial Times reported. Last year it made a €243m profit over the same period. Revenues tumbled by almost €2.2bn — 95 per cent — to just €125m, while costs only came down 85 per cent. But the airline has been scaling its flight schedule back up quickly since lockdowns started to lift: 40 per cent of flights were due to run in July, 60 per cent in August and 70 per cent come September.