Headlines

Danske Bank has been forced to close all operations in the Baltics and Russia in response to the largest money-laundering scandal, which has prompted EU authorities to launch an investigation of Danish and Estonian regulators. The bank was given eight months to return customer deposits and transfer its loan contracts to another provider in Estonia, after a report released last autumn revealed the extent of the failures at the bank, the Financial Times reported.

After a tough start to the year for the corporate debt market, many managers of specialist investment vehicles backed by risky loans believe that March will be make or break. This has little to do with the financial health of the companies whose leveraged loans end up in these structures, known as collateralised loan obligations, the Financial Times reported. Instead, the CLO market is on tenterhooks because Japan’s largest agricultural bank is set to finalise its budget for the financial year beginning in April.

Pity the Chinese state-owned bank trying to obey ever-changing instructions from policymakers in Beijing. For years, banks preferred to lend to giant state-owned enterprises — both because of the implicit government guarantee that such debt has traditionally carried, and because SOEs were seen as national champions that deserved support. But now the script is shifting as China’s economy slows, the Financial Times reported.

South African Finance Minister Tito Mboweni is looking for a way to keep the country’s main power producer from sucking the life out of the economy, Bloomberg News reported. Debt at Eskom Holdings SOC Ltd. has ballooned to 419 billion ($31 billion) and it’s struggling to supply Africa’s most-industrialized nation with enough power even as it weighs on finances, with most of its borrowings guaranteed by the state. The Department of Public Enterprises says the utility needs a cash injection to survive.

After five years of falling or stagnant incomes, Russian consumers are facing yet more bad news in 2019, Bloomberg News reported. First came the Jan. 1 increase in the value-added tax by two percentage points. A few weeks later, the central bank signaled it could limit one of the key sources battered shoppers have been relying on to keep up their spending: a boom in consumer lending. Real disposable incomes contracted 1.3 percent last month, according to an estimate released by the Federal Statistics Service late Tuesday. The median of 9 economists forecast a decline of 0.9 percent.

Turkey’s government is making cheap credit a key part of its campaign trail, pushing banks to take on greater risks in an economy that’s already teetering on the brink of recession, Bloomberg News reported. President Recep Tayyip Erdogan’s administration is urging state-owned lenders to extend cheap loans to industries spanning agriculture to soccer clubs and help consumers pay off their credit cards or get below-market interest rates on mortgages.

The recapitalization of Germany’s NordLB bank should be investigated by the European Commission as it likely involved state aid that might have violated European Union rules, two EU lawmakers said on Tuesday. The lender, which has been struggling for years due to its exposure to the crisis-hit shipping industry, said in February that the German regional state of Lower Saxony and Saxony Anhalt had decided to go ahead with a recapitalization, also backed by German savings banks, Reuters reported.

The family of Israeli property tycoon Amir Dayan is among buyers of a portfolio of U.K. hotels leased to Hilton Worldwide Holdings Inc., according to people with knowledge of the deal. The group of nine hotels, which entered a form of bankruptcy protection under U.K. insolvency laws starting in early 2018, was acquired by companies controlled by Vivion Investments Sarl for 246 million pounds ($315 million), according to a filing by the administrators appointed to oversee the properties, Bloomberg News reported.

Debt-ravaged Jet Airways India Ltd., the country’s biggest full-service airline, is selling a majority stake for 1 rupee -- a little more than 1 U.S. cent, Bloomberg News reported. It’s part of a bailout plan by its state-owned lenders that will give the airline time to arrange fresh equity. The complicated arrangement is on track to be voted through on Feb. 21, in what would represent the rescue of one of the country’s most visible companies at a sensitive time, with India’s general election just weeks away. It’s consistently been one of India’s top three airlines in the past decade.

Greece plans to pump as much as 1 billion euros ($1.1 billion) into its banks over the next five years by subsidizing a part of households’ mortgage repayments, Bloomberg News reported. Under the plan, some households unable to repay their home loans will restructure their debts with the banks, with the state then paying part of the remaining monthly installments, according to three people familiar with plan, who asked not to be named as details still need to be finalized. Greek banks are grappling with 88.6 billion euros of bad loans, a legacy of the country’s financial crisis.