Headlines

Piraeus Bank, the biggest Greek lender, has announced a partnership with Sweden’s Intrum group to reduce a €7bn pile of bad loans that has been holding back its capacity to finance companies that survived the country’s economic crisis, the Financial Times reported. The €410m deal will create a new Greek debt collection business 80 per cent owned by Intrum and 20 per cent by Piraeus. However, the bank’s non-performing debt, which amounts to almost half the loan book, will remain on its balance sheet.

The board of North of England telecoms group KCom has pulled its recommendation of a takeover by a pension fund, instead throwing its weight behind a higher bid from a Macquarie investment fund, the Financial Times reported. KCom — which was briefly one of the UK’s highest-valued companies during the dotcom bubble — said on Monday its board planned to unanimously recommend a £563m offer from Macquarie Infrastructure and Real Assets instead of the £504m offer from the trustees of the Universities Superannuation Scheme, which it backed last month.

Shares in Kier plunged 40 per cent on Monday as it warned that profits would be about £40m lower than expected, adding to fears over the health of the UK outsourcing and construction sector, the Financial Times reported. In an unscheduled trading update, Kier said it expected underlying operating profit for the year to June 30 to be £40m lower than analyst estimates of £169m.

Prepackaged insolvency resolution, allowing creditors and shareholders with a pre-negotiated corporate reorganisation plan to approach NCLT, may be taken forward by the government as a key route in the time to come, Business Standard reported. Sources said "this will aid the existing framework and cut costs and the time taken during the resolution process. This is part of a consultation process under the law panel of the IBC identifying issues impacting its efficacy and make recommendations.

U.K. retail sales declined by the most on record in May, with sluggish growth in online sales and Brexit-related uncertainty taking a toll, Bloomberg News reported. Total sales fell by 2.7%, the biggest drop since at least 1995 when excluding any distortions caused by the timing of Easter. While some of the drop can be accounted for by comparing to last year -- when sales were boosted by sunshine, the World Cup and a royal wedding -- political and economic uncertainty played a significant role, the British Retail Consortium and KPMG said.

In 2008, as the Lehman Brothers bankruptcy triggered an epic credit crisis across the developed world, everyone braced for the inevitable crisis in the emerging markets that would follow. It didn’t happen. That year’s financial chaos created problems for these economies, whose stock and bond markets dipped far more than those of the U.S. or Europe; but they avoided wholesale defaults or devaluations, Bloomberg News reported. There was no repeat of the cycle of emerging market crises that had roiled the world in past decades.

India’s shadow banks are being forced to go overseas more for money as local lenders balk at extending funds, flagging strains in a key industry for an economy that’s already sputtering, Bloomberg News reported. The country’s non-banking financial companies have raised more than $2 billion of overseas bonds and loans in 2019, a record compared with the same period in previous years, according to data compiled by Bloomberg. The lifeline is welcome, even as it underscores a scramble after a string of defaults by peer IL&FS Group last year made investors wary.

Underwriters of a new Chinese credit hedging tool just narrowly avoided their first-ever payout in the nation’s $13 trillion bond market, Bloomberg News reported. An investor protection clause on two of Beijing Orient Landscape & Environment Co.’s bonds was triggered last month after the note repayment funds were used for other purposes. Bondholders recently gave waivers, not calling them defaults. The close shave is making underwriters more wary of selling credit risk mitigation warrants (CRMWs), according to Southwest Securities Co.

Deutsche Bank AG fell to a fresh record low Monday amid a broad-based slump in European bank stocks, adding to pressure on Chief Executive Officer Christian Sewing to come up with a more decisive solution for his ailing investment bank, Bloomberg News reported. With concerns about a widening trade war weighing on global stocks and clouding the outlook for higher interest rates, the lender fell as much as 4.7% in Frankfurt trading. That left the shares below 6 euros ($6.70) for the first time, while the cost to protect against a default in the bank’s debt jumped.

The Italian government has told the European Commission that it plans to launch “a comprehensive plan of spending review and revenue enhancement” in a bid to avert a row over the country’s mounting debts, the Financial Times reported. Brussels wrote to Rome on Wednesday, expressing concern about its budget forecasts and warning the Italian government against its attempts to expand Italy’s budget.