Headlines

South Korean president Moon Jae-in has warned that the economic crisis stemming from coronavirus is only just beginning as he unveiled a sharp increase in spending to deal with the fallout of the pandemic to almost $200bn, the Financial Times reported. The new measures highlight the long-term economic challenge for countries even after they have dealt with the immediate public health crisis. “We are at the beginning stage of a crisis. A hiring freeze together with a corporate crisis is looming,” said Mr Moon.

European bank stocks are trading close their steepest-ever discount to U.S. rivals and early signals show that first-quarter earnings may only reinforce the gap, Bloomberg News reported. The continent’s lenders, already in a tough spot before the coronavirus outbreak hit, are likely to detail more worrying news for their embattled investors. In Germany, Deutsche Bank AG may have seen credit trading weigh on its markets revenue while Commerzbank AG probably started to set aside more funds for troubled loans.

Kotak Mahindra Bank Ltd. plans to raise about $1 billion with a new share issue in a move that will strengthen its capital buffers and reduce the stake held by its wealthy founder, Bloomberg News reported. The Mumbai-based lender didn’t provide pricing details on the 65 million of new shares it said it will issue in a filing on Wednesday. However, under a regulatory formula, they should be priced around the level of the latest two-week average, which works out at about 1,184 rupees ($15).

Argentina failed to make a $503m payment due on Wednesday, setting the clock running on what is expected to be a ninth sovereign default, the Financial Times reported. The decision came one day after economy minister Martín Guzmán said that Buenos Aires “will not be able to make [any] debt payments in the coming days”. By failing to pay, the government marked the beginning of a 30-day grace period during which Argentina must pay up to avoid defaulting on $65bn of foreign debt owned by private creditors.

Bad debt at Chinese banks climbed in the first quarter even as lenders deferred payments on and rolled over a combined 1.5 trillion yuan ($212 billion) in loans after the coronavirus outbreak brought the world’s second-largest economy to a standstill, Bloomberg News reported. After allowing banks to take a more lenient approach on how they classify bad debt, regulators in Beijing on Wednesday revealed the industry’s non-performing loan ratio nudged up just 0.06 percentage point to 2.04% at the end of March.

Creditors of Brazilian corruption-ensnared conglomerate Odebrecht SA have approved debt restructuring plans of 12 of its subsidiaries, after an online assembly that lasted more than eight hours, Reuters reported. Odebrecht’s lawyer Eduardo Munhoz said the plans approved on Wednesday represent the restructuring of more than 99% of the 53 billion reais ($9.7 billion) of the conglomerate’s debt. Percentages of creditor approval were high for all companies with votes on Wednesday, he added.

The co-owner of Virgin Atlantic Airways Ltd. said it’s unable to invest more in Richard Branson’s struggling U.K. airline, and raised the possibility it could face going through insolvency proceedings, Bloomberg News reported. Delta Air Lines Inc., which owns a 49% stake in Virgin Atlantic, can’t help out because it’s consumed with its own problems and has already bumped up against U.K. limits on foreign airline ownership, Ed Bastian, the U.S. company’s chief executive officer, said Thursday. “With our crisis in cash, we need to protect our own business.

Japan’s long-suffering regional banks face the biggest threat to their survival since the 1990s post-bubble malaise as the coronavirus hammers their few remaining profit drivers, Bloomberg News reported. Analysts and investors are predicting some local lenders will eventually be delisted or bailed out by the government as bad loans climb and investment income evaporates in the wake of the crisis.

The collapse of one of Singapore’s biggest oil traders has raised the prospect of a severe liquidity crunch in the city-state’s under-pressure commodities sector, threatening a wave of defaults and bankruptcies, the Financial Times reported. Investors and analysts warn that banks are likely to cut their exposure to the industry after heavily indebted oil trader Hin Leong Trading filed for bankruptcy protection.

South Africa’s government has been urged to rescue its state-owned agricultural bank to avoid the risk of farmers being starved of access to financing and threatening food security, Bloomberg News reported. Failure by the Land and Agricultural Development Bank of South Africa to lend to farmers and agri-processing businesses would have a “massive impact” on local food supplies, said Omri Van Zyl, the executive director for AgriSA, the nation’s largest farmers group. The Land Bank is seeking waivers from its lenders after missing a loan repayment, triggering a default event.