Headlines

Portugal’s three biggest banks have agreed to create a jointly managed platform to tackle their bad loans, one of Europe’s largest problem debt piles, the Financial Times reported. Millennium BCP, Novo Banco and state-owned Caixa Geral de Depósitos said in statements to the CMVM, Portugal’s stock market watchdog, late on Thursday that the platform was aimed at “speeding up the reduction of non-performing exposures”. The three banks account for most of an estimated €25bn to €30bn of bad debt in the Portuguese banking system, about 15 per cent of total credit portfolios.

Embattled Indian telecom company Reliance Communications Ltd faced another setback on Sunday after a deal to merge its wireless business with smaller rival Aircel was called off, raising fresh doubts around its debt restructuring plans, the International New York Times reported on a Reuters story. The company, widely known as RCom, said it had agreed with Aircel to call off the proposed deal due to regulatory delays and legal uncertainties.

The eurozone’s annual rate of inflation was unchanged during September and well below the European Central Bank’s target as policy makers consider a reduction in a key stimulus measure, The Wall Street Journal reported. To the surprise of most economists, eurozone growth has accelerated this year, lessening the need for ECB stimulus. The central bank has signaled it will announce a reduction in its bond purchases when its policy makers next meet on Oct. 26.

Venezuela has a dubious backstory when it comes to paying sovereign debt. It’s tied with Ecuador for the most defaults since 1800, Bloomberg News reported. But for anyone betting that a default would catapult President Nicolas Maduro from office even as he holds on in the face of untold economic misery, here’s a more relevant marker: Not once on those 10 occasions, most recently in 2004, did a missed payment spur a change in government. In fact, defaults around the globe have triggered governmental change less than 15 percent of the time since 1992, according to data compiled by Bloomberg.

Banks that provided a $4.75 billion loan to the owner of Turk Telekomunikasyon AS see a government takeover of the operator’s management as the best way of resolving Turkey’s largest debt default, according to three people familiar with the matter. The stock rose. Lenders favor this outcome to another proposal of a cash injection into Otas, which owns 55 percent of Turk Telekom and has missed two payments on the loan it took out in 2013, the people said, asking not to be identified because negotiations are ongoing, Bloomberg News reported.

Credit-rating agency Moody’s downgraded HSBC’s Hong Kong unit, citing rising macroeconomic risks in in Hong Kong, China, Australia, Singapore, Taiwan and Malaysia over the last two years. Moody’s downgraded The Hongkong and Shanghai Banking Corp’s long-term issuer rating to double A three (Aa3) to double A two (Aa2), the Financial Times reported.

Portugal's three biggest banks plan to manage jointly some of their bad loans to avoid more writedowns, effectively taking on the task of trying to tackle one of Europe's biggest bad-debt burdens, the International New York Times reported on a Reuters story. The banks - state-owned Caixa Geral de Depositos as well as Novo Banco and Millennium bcp - will set up a private platform to manage loans that at least two of them have made to the same corporate borrowers, Deputy Finance Minister Ricardo Mourinho Felix told Reuters in an interview.

The failure of two big Russian lenders within a month has cast doubt on how much longer a phenomenon of the post-Soviet financial system, the "pocket bank", can last. The practice of conglomerates running their own banks grew out of the early days of Russian capitalism in the 1990s. But with authorities now purging a sector beset by bad debts, owners are trying to get rid of their remaining pocket banks and finding few willing buyers, if any, the International New York Times reported on a Reuters story.

A wave of local-currency debt coming due next year alongside new stricter lending rules are bearing down on China’s developers and posing a risk to the country’s economy, The Wall Street Journal reported. The twin threats combined with a widely expected property market slowdown portend a shift in fortunes for many home developers after they rode a housing boom and strong profits in this year’s first half.

Canadian steel producer Stelco Holdings Inc, which emerged from bankruptcy protection three months ago, said on Wednesday it has filed a preliminary prospectus with securities regulators in Canada for a proposed initial public offering of its shares, Reuters reported. Stelco, which is owned by U.S. restructuring firm Bedrock Industries Group LLC, is seeking to raise US$150 million in the share sale and could have a market value of about US$1 billion, according to a source familiar with the situation.