Headlines

Deutsche Bank warned that the coronavirus pandemic could threaten its ambition to return to profitability this year, as Germany’s largest lender braced itself for a painful drop in earnings and a jump in loan provisions, the Financial Times reported. Despite a surge in revenue at the investment bank during the first quarter, Deutsche posted a net loss attributable to shareholders of €43m during the period, compared with a profit of €97m last year, the Frankfurt-based lender said on Wednesday.

While business owners around the world are facing crisis, keeping afloat the smaller companies with less than €100m in revenues that are the backbone of the Italian economy is a particularly acute challenge, the Financial Times reported. This is partly because there are so many of them and partly because of the way they traditionally fund themselves: with short-term bank loans. Northern Italy is home to more than 2m businesses, according to Prometeia, a research and consulting firm.

Kenya’s economy could shrink by as much as 1% should disruptions caused by the coronavirus pandemic last for about three months, according to the World Bank, Bloomberg News reported. That’s even worse than in 2008, when a cocktail of post-election violence that killed more than a thousand people, drought and the global financial crisis curtailed output in East Africa’s biggest economy. Covid-19 has slashed demand for Kenyan agricultural exports, decimated tourism and is expected to squeeze remittance inflows.

Barclays has announced a sharp increase in provisions for bad loans, becoming the latest bank to prepare for a wave of defaults from retail and corporate customers as the coronavirus crisis upends the global economy, the Financial Times reported. First-quarter credit impairment charges surged almost fivefold to £2.1bn from £448m in the same period last year, more than double the £923m analysts had forecast, the London-based bank said on Wednesday.

Struggling Mexican airline Interjet suffered a heavy blow on Wednesday when it was suspended from the clearing house membership of the International Air Transport Association (IATA) for failing to keep up with payments, Reuters reported. The Airlines Clearing House (ACH) said in a letter dated Wednesday the membership of ABC Aerolineas S.A. de C.V., which operates under the name Interjet, was suspended with “immediate effect” due to the “non-payment of a clearance balance”.

Switzerland and Austria pledged to help Lufthansa with state-backed loans as the German airline pursues talks with Berlin over a 9 billion euro ($9.8 billion) rescue package, Reuters reported. The Swiss government said on Wednesday it will ask parliament for 1.275 billion francs in loan guarantees for Lufthansa (LHAG.DE) units Swiss and Edelweiss. Strict travel restrictions to contain the coronavirus pandemic have brought flights to a near-halt across the world and there is no end in sight for when they can restart, leaving many airlines begging governments for rescue packages.

Indonesian banks are looking to the government for additional stimulus measures to cope with a growing pile up of bad loans, as the coronavirus pandemic batters the economy, Bloomberg News reported. The country’s lenders are poised to add at least 556.6 trillion rupiah ($36 billion) of non-performing loans this year amid the unprecedented headwinds from the Covid-19 pandemic, according to PT Bank UOB Indonesia. That will push their soured debt ratio above 5%, from 2.8% at the end of January, the bank estimates.

South African retailer Edcon will file for bankruptcy protection in the next few days, it said on Wednesday, becoming the country’s first major corporate casualty of the coronavirus pandemic, Reuters reported. Edcon said it had lost 2 billion rand ($108 million) of sales since the virus reached South Africa in early March and the government responded with a nationwide lockdown that forced non-essential shops to close.

Fitch has downgraded Italy’s credit rating to a single notch above “junk”, saying the jump in debt levels resulting from the coronavirus crisis will increase doubts about the sustainability of Rome’s borrowings, the Financial Times reported.

Protests against growing economic hardship erupted in Tripoli and spread to other Lebanese cities on Tuesday, with banks set ablaze and violence boiling over into a second night. One demonstrator was killed in riots overnight Monday, according to security and medical sources, as a collapse in the currency, soaring inflation and spiralling unemployment convulse Lebanon, a country in deep financial crisis since October, Reuters reported. A shutdown to fight the new coronavirus has made matters worse for the economy.