Headlines

Rosneft has asked the Russian government for as much as Rb1.5tn ($42bn) in support, in a clear sign of the growing cost of western sanctions against Moscow, the Financial Times reported. The Russian government will consider a request from Igor Sechin, the powerful head of Rosneft, to offset the impact of western restrictions against the state-owned company within the next two weeks, Arkady Dvorkovich, deputy prime minister, told journalists on Thursday.

Greece’s government will draft a new legal framework by early September for restructuring non-performing loans, Development Minister Nikolaos Dendias said. The issue is a “top priority” for the ministry and the government, Dendias told reporters in Athens today, ekathimerini.com reported. He said the draft law will move forward if it receives no objection from the so-called troika of the European Commission, the European Central Bank and the International Monetary Fund. Strategic defaulters shouldn’t assume they’ll be allowed to avoid paying back their loans, Dendias said.

Perhaps because they had no access to banking during apartheid, poor South Africans have been gorging themselves on credit ever since. A glut of consumers impatient to enjoy a middle-class lifestyle has made the fortunes of payday lenders, which charge sky-high interest rates for smallish unsecured loans. Yet, after weeks on the ropes, African Bank, the biggest purveyor of such loans, has had to be rescued from near-bankruptcy, The Economist reported. South Africa’s authorities insist there is no broader rot in the financial system.

The European Central Bank (ECB) faces fresh calls to adopt growth-boosting measures after data out yesterday showed growth in the euro zone has stalled, the Irish Times reported. Economic growth in the second quarter was flat compared to the first quarter, Eurostat figures showed yesterday, combined with a drop in euro zone inflation. Slowdowns in Germany, France and Italy – the euro area big three, comprising two-thirds of euro zone GDP – dragged down the overall growth figure from 0.9 per cent in the first quarter to 0.7 per cent in the quarter to the end of June.

The revival of subprime lending has gathered pace after Provident Financial bought a car finance group that provides loans to customers who would be shunned from traditional lenders, the Financial Times reported. It follows a period of rapid growth for Provident, a doorstep lender that has benefited from rising profitability by offering loans and credit cards to riskier and credit-impaired borrowers. Provident said it had bought Moneybarn, the subprime car finance company, for £120m. It is its first acquisition since the financial crisis.

Argentina came out swinging today against the US judge overseeing its debt default case, in defiance of a threatened contempt order, and disappointed market hopes it might soon restart talks with the hedge funds suing the country, the Irish Times reported. A group of holdout investors have sued the South American country for full repayment on bonds that went into default in 2002. The funds rejected debt restructurings in 2005 and 2010, holding out for better terms.

Chinese lending unexpectedly and drastically slowed in July to the lowest level since the depths of the global financial crisis, as a weak property market appeared to drive down demand for new loans, despite recent moves to ease credit, the International New York Times reported. A broad measure of new credit was 273.1 billion renminbi, or $44.3 billion, in July, the central bank reported on its website Wednesday.

The Financial Supervisory Commission (FSC) yesterday placed Global Life Insurance Co (國寶人壽) and Singfor Life Insurance Co (幸福人壽) under government receivership, as the two insurers had failed to contain financial losses or management malpractices, the Taipei Times reported. “We have no choice but to take the drastic step at 5:30pm to maintain market order and stability,” FSC Chairman William Tseng (曾銘宗) told a news conference.

The Reserve Bank of India (RBI) is working with the Centre to improve governance in public sector banks, RBI governor Raghuram Rajan said on Wednesday and called for a bankruptcy code to prevent misuse of the system in future. The governor also warned of crony capitalism slowing down the economy, the Hindustan Times reported. “Do we need a bankruptcy code? absolutely! It is something I have been saying for six years in reports that we need a bankruptcy code,” he said.

Prime Minister Aleksandar Vučić said Wednesday he believed it possible to find a solution for around 40 restructuring companies and save them from bankruptcy. Vučić and Labor Minister Aleksandar Vulin met in Belgrade with officials of the Confederation of Autonomous Trade Unions led by Ljubisav Orbović and representatives of worker unions from 40 companies undergoing restructuring. There is a total of 156 restructuring companies in Serbia.