Headlines

Royal Bank of Scotland’s bad debt provisions increased almost tenfold in the first quarter, as the lender braced for a steep increase in business customers running into difficulties, the Financial Times reported. The bank, which is majority-owned by the UK government, put aside £802m to deal with an expected increase in defaults, compared with £86m in the first quarter of last year. As a result, net profit tumbled 59 per cent to £288m.

Two South African trade unions are seeking court action to try to block layoffs at the embattled state-owned South African Airways (SAA), court papers seen by Reuters on Friday showed, Reuters reported. SAA entered a form of bankruptcy protection in December and rescue specialists Les Matuson and Siviwe Dongwana proposed severance packages for all of SAA’s roughly 5,000-strong workforce last month after the government said it would not provide any more funds. They gave trade unions until the end of business on Friday to reach an agreement on staff severances.

Norwegian Air Shuttle ASA reached an agreement with bondholders to swap debt for equity, taking the airline one step closer to securing the state loan guarantees needed to keep the struggling carrier afloat, Bloomberg News reported. Such loan guarantees were “crucial to getting through the crisis,” Chief Executive Officer Jacob Schram said in a statement on Sunday. As the airline prepares to hold a shareholder meeting on Monday, Schram said his main priority now is to reach an agreement with the leasing companies that provide their planes.

Over a fifth of the U.K.’s listed companies issued a profit warning in the first quarter of 2020, compared with 17% in the full year of 2008, according to a report by consultants EY, Bloomberg News reported. The economic crisis triggered by the Covid-19 pandemic has pushed up the number of profit warnings in the U.K., with 301 issued in the quarter ending March 31, almost as many as the whole of the previous year, the report stated.

Argentina is willing to keep working toward a deal to restructure its debt if an offer that expires on Friday is rejected, the economy minister said. Economy Minister Martin Guzman told Argentine daily Clarin in an interview published on Sunday that he is seeing a “growing understanding” with bondholders ahead of a May 8 deadline for the offer that creditor groups already criticized, Bloomberg News reported. “We believe that the process in these days has been positive, yet it is still lacking and the dialog will continue,” Guzman said.

With plenty of Hong Kong companies on their last legs, landlords, suppliers and other creditors are eager to collect on unpaid bills, Bloomberg News reported. For three months, there’s been no relief: the court that presides over failing businesses has been effectively closed. Now, with the court scheduled to resume Monday, lawyers and restructuring experts are expecting a flood of unhappy lenders to ask for a forced liquidation of hundreds of small- and medium-sized businesses in the city.

British commodities tycoon Sanjeev Gupta’s family business has decided to close its loss-making Commonwealth Trade Bank Ltd after failing to revive the business, it said on Friday, Reuters reported. Gupta’s privately-held GFG Alliance, with revenues of over $20 billion, has a wide range of businesses, largely in commodities such as steel and aluminium, but also spanning energy, infrastructure and finance.

The fallout of the coronavirus and oil-price collapse will offer a once-in-a decade opportunity for distressed debt investors in the Persian Gulf, according to Sancta Capital Group Ltd, Bloomberg News reported. “2020 will present us with the most lucrative deep value and distressed debt investment opportunity set since the global financial crisis,” said Ahmad Alanani, chief executive officer of the company, which invests in the debt and equity of under-performing companies.

Zambian inflation accelerated for a 13th straight month in April to the highest rate in almost four years as its currency continued to plummet, Bloomberg News reported. Consumer prices rose 15.7% from a year earlier, compared with 14% in March, the Zambia Statistics Agency said Thursday. That’s the highest rate since September 2016. Prices rose 2.2% in the month. The kwacha has weakened 2.5% against the dollar this month, taking its plunge for the year to 24%, the worst-performing currency in Africa.

Banks are to be given assurances by the UK government over the legal and regulatory framework around new small business loans, but industry executives are seeking clarity over how to act if the scheme results in high levels of default or fraud, the Financial Times reported. The government is locked in talks with banks over the final details of the scheme with just four days to go until it is launched. Under the bounce back scheme, banks will offer interest and payment free loans of up to £50,000 to small businesses that are entirely guaranteed by the government.