Headlines

As Iraq inches toward the formation of a new government, the risks are stacking up for OPEC’s second-biggest crude producer, Bloomberg News reported. Beyond the country’s long-standing sectarian tensions, frayed relations with the Kurdish north, a bloated public wage bill and endemic corruption, new Prime Minister Mustafa Al-Kadhimi now has to grapple with a collapse in oil revenue and the fallout from the Covid-19 pandemic. Little wonder that the country is seeking financial aid from the U.S.

HSBC Holdings Plc alleged Singapore oil trader ZenRock Commodities Trading Pte Ltd. was involved in a series of “highly dishonest transactions” that included the company using the same cargo of oil to obtain more than one loan from banks, according to court documents seen by Bloomberg, Bloomberg News reported. Europe’s biggest lender filed an application to Singapore’s High Court on May 4 to put ZenRock under so-called judicial management, a form of debt restructuring in which a third party runs the company.

Measures by some African countries to get money flowing into the real economy aren’t working yet, with banks parking cash in government bonds as the economic slowdown cuts demand for credit, Bloomberg News reported. Lenders have little choice but to invest in government securities as opportunities to deploy unprecedented amounts of liquidity provided by their central banks dry up. Lockdowns aimed at containing the spread of the coronavirus have brought trade to a halt, leaving lenders to focus on helping existing customers with payment holidays or loan restructurings.

The Bank of England has forecast that the coronavirus crisis will push the UK economy into its deepest recession in 300 years, with output plunging almost 30 per cent in the first half of the year, but it decided not to launch a new stimulus, the Financial Times reported. In its monetary policy report, the central bank presented rough and ready predictions for the economy, suggesting that output would slip 3 per cent in the first quarter followed by a further 25 per cent fall in the second.

Argentina may consider easing the country’s ultra tight capital controls once it finishes negotiations with bondholders to restructure its debt and coronavirus uncertainty clears, Economy Minister Martin Guzman said, Bloomberg News reported. The government acknowledges the need to relax the controls over its currency markets as a way to promote economic activity, Guzman said in an interview, declining to give any time frame when such a change may take place.

Standard Bank Group Ltd. and Absa Group Ltd. are among South African banks holding off on any further layoffs as they prepare to help the shrinking economy survive a potential jobs bloodbath, Bloomberg News reported. Local lenders join global institutions from New York, Paris, London and Frankfurt that have pledged to preserve jobs during the coronavirus pandemic.

Canada’s privately held Aldo Group Inc said on Thursday it would restructure under the Companies’ Creditors Arrangement Act (CCAA) as the impact of the COVID-19 outbreak weighed on the footwear retailer’s business, Reuters reported. The announcement follows the high-profile bankruptcies of Neiman Marcus Group NMRCUS.UL and J. Crew Group Inc, as retailers around the world face unprecedented disruption and heavy debt piles brought on by the pandemic.

The number of corporate insolvencies in Britain fell a third in April compared to the year before even as the COVID-19 pandemic hammered the economy, figures compiled by KPMG showed on Friday, as government support packages kept firms afloat, Reuters reported. The spread of the novel coronavirus - and lockdown measures introduced to contain it - has ravaged the British economy, with Britons told to stay indoors and many non-essential businesses told to close. The Bank of England said on Thursday it could cause the biggest economic slump in over 300 years.

Only a handful of Lebanese lenders are expected to emerge from an economic rescue plan that many banks, who are among the government’s biggest creditors, oppose because it would wipe out $20.6 billion in shareholder capital, Reuters reported. Lebanon is trying to enlist the International Monetary Fund’s help and restructure around $90 billion in debt to end an economic crisis which has included a sovereign default, a currency crash and widespread public protests.

A slew of Britain’s mid-sized banks on Wednesday reported steady deposits and demand in the face of the COVID-19 pandemic, but warned it was too early to assess the long-term damage of the outbreak to their businesses, Reuters reported. The lockdown in late March to contain the spread of the new coronavirus has brought the economy to a near halt, prompting bigger banks last week to set aside provisions for loan losses in case businesses and consumers struggle to pay them back.