Headlines

Dutch lender Rabobank said today its net profit slipped 3 per cent to €1.1 billion in the first half of the year, due to charges related to Dutch bank SNS which was bailed out by the government. The outlook for 2014 is uncertain, the bank said in a statement, partly due to the Ukraine crisis and the possible impact on the global economy, the Irish Times reported. Rabobank said its net result in the first six months of 2014 was reduced by a one-time €214 million levy imposed on Dutch banks.

As Europe slogs through its latest round of bank stress tests, a growing number of analysts have already reached their own conclusion: Eurozone banks need additional cash, the International New York Times reported. To buttress their case, some analysts have dusted off an obscure American bank metric that highlights the extent to which Europe’s increasing number of nonperforming loans is threatening to overwhelm existing bank cushions. The measure, called the Texas ratio, was developed by an analyst who covered troubled United States banks during the late 1980s and early 1990s.

When Nobel Prize-winner Joseph Stiglitz was asked in Germany this week if the country and its neighbours would suffer a lost decade, his response was unequivocal, the Financial Times reported. “Is Europe going the same way as Japan? Yes,” Mr Stiglitz said in Lindau at a meeting for Nobel Laureates and economics students.

A federal court judge said on Thursday that Argentina’s attempt to skirt one of his rulings was “lawless” but stopped short of finding the country in contempt of court, the International New York Times reported. Exasperated lawyers for a group of New York hedge funds that are seeking more than $1.5 billion in bond payments that Argentina has refused to pay pleaded with the judge to take a harsher stance. In a heated moment, one of the lawyers, Robert A.

A planned $2bn deal between Rosneft and oil trader Vitol has been shelved, in the latest sign that tougher western sanctions are hampering the Russian state oil group’s ambitions, the Financial Times reported. Vitol, the world’s largest independent oil trader, had been in talks for several months to raise about $2bn from US and European banks to make an advance payment to Rosneft in exchange for future oil supplies. The talks were first reported by the FT in March.

Irish SMEs that borrowed money to invest in property are almost twice as likely to default as similar-sized businesses without property debt, according to new research from the Central Bank. In its report, the bank calculates that 20 per cent of SMEs in the Republic have an exposure of some kind or other to property, the Irish Times reported. These borrowings, many of which stem from loans taken out during the height of the property boom, account for one third of the outstanding bank borrowings of the SME sector.

European banks already have enough information to forge ahead with capital-raising exercises, rather than waiting for the formal publication of the health checks later this year, a leading accountancy said. KPMG said the publication of methodologies for the comprehensive assessment, combined with disclosures from regulators, should be enough to “infer” the impact the exercise will have on banks’ capital levels, the Financial Times reported.

The European Banking Authority will for the first time publish details of banks’ losses from fines and litigation when it releases the results of European Union- wide stress tests later this year. As many as 12,000 data points per bank will be disclosed, including on their risk weighting of assets, sovereign debt holdings and the structure of capital holdings, the London-based regulator said in a statement on its website today, the Irish Times reported. The EBA will include misconduct-related costs in its assessment of how much capital banks have raised or lost in 2014.

The Cabinet will this week likely ask parliament to issue a binding resolution stating that an insolvency framework will be passed and take effect as of January 1, Cyprus Mail reported. The resolution will be binding on both the government and the legislature, sources said. Opposition parties want, in writing, additional and concurrent safeguards for homeowners who have trouble servicing their mortgage, otherwise threatening to vote down the government’s foreclosures bill.

The Brazilian government on Wednesday announced measures aimed at increasing bank lending, including granting banks permission to issue home-equity loans, The Wall Street Journal reported. The measures also include reducing documentation for mortgages and streamlining the process to seize loan collateral. "Credit supply is running very low. The new measures will create conditions for the banks to offer more loans," Finance Minister Guido Mantega told reporters after the announcement.