Headlines

Credit unions cannot become complacent despite having avoided the worst case scenario envisaged at the time of the financial crisis, according to the Irish League of Credit Unions registrar. In a speech due to be given at the league’s AGM, Anne Marie McKiernan was to say that while the feared failure of a significant number of credit unions had not occurred, the sector could have false sense of security and should not undo the “hard-won financial improvements” of recent years.

UBS's chairman said a default by Greece is seen by the International Monetary Fund as "systemically controllable" and he believed it would have a negligible impact on the Swiss bank itself, according to a newspaper interview published on Saturday. Athens is lurching closer to bankruptcy, with its next big test on May 12, when it is due to pay 750 million euros to the IMF. Euro zone finance ministers told Greece on Friday that its leftist government would get no more aid until it agreed a complete economic reform plan.

A “stark” divide between the north and south of England has opened up since the recession in rates of personal insolvency, highlighting the uneven nature of the economic recovery, the Financial Times reported. In London and the home counties, insolvency rates fell 18 per cent and 16 per cent respectively in the five years from 2008 as the services industries staged a concerted recovery, according to research by the accountancy firm Moore Stephens. But in the northeast and northwest of England, personal insolvency rates rose by 5 and 4 per cent respectively.

Germany's largest power producer RWE will explore a split of its businesses if the sector's crisis intensifies, Chief Executive Peter Terium said, keeping open the option of a drastic overhaul similar to rival E.ON. Germany's utilities have seen their profits and share prices tumble as they grapple with a restructuring of the energy sector that has promoted solar and wind generation at the expense of their gas-fired power stations. "We want our company, RWE, to remain active in all parts of the value chain," he told shareholders at the group's annual general meeting on Thursday.

Factory activity in China contracted at its fastest pace in a year in April, an early reading of a survey showed on Thursday, suggesting that economic conditions are still deteriorating despite increasingly aggressive stimulus efforts by the Chinese central bank, the International New York Times reported. The HSBC/Markit preliminary purchasing managers’ index fell to 49.2 in April, remaining below the 50-point level, which separates growth in activity from a contraction on a monthly basis. Economists polled by Reuters had forecast a reading of 49.6, equal to March’s final figure.

The home province of defunct lender Hypo Alpe Adria, Carinthia, is asking Vienna for financial support, saying it will run out of money by the beginning of June without external help, Reuters reported. Carinthia provided debt guarantees for years to fuel Hypo's rapid expansion before the practice was stopped in 2007, but the last ones do not expire until around 2017. With an annual budget of 2.2 billion euros ($2.36 billion), Carinthian officials have said the province cannot honour nearly 11 billion euros of backing for Hypo debt that creditors facing a "haircut" could demand.

The slump in oil prices looks set to claim its highest-profile victim after a North Sea drilling firm warned it was facing collapse unless it can bring in urgent funding, The Scotsman reported. Trap Oil, which is quoted on London’s Alternative Investment Market, said yesterday it was “highly likely” to run out of cash within three months as a result of “depressed” Brent crude prices, which have tumbled by about half since last summer. The company’s only producing asset is the Athena oil field, in which it has a 15 per cent stake.

The enactment of the hotly-debated insolvency framework into law last Saturday was credit positive for Cypriot banks because it lays the groundwork for large-scale loan restructuring and improves the banks’ recovery prospects, Moody’s ratings agency said on Thursday.

Saudi Cable Company has signed a deal with three of its main lenders to restructure SR640 million ($170.7 million) of debt, it said in a statement, Arab News reported. The debt will be restructured over a period not exceeding eight years, it said without naming the lenders or giving other details of the restructuring. The company maintains “normal operational relationships” with one of its lenders, from which it has borrowed SR112.9 million, although it has not complied with covenants on those loans, Saudi Cable added.

Brazilian engineering conglomerate Grupo OAS expects revenue to shrink more than 50 percent by 2017 as it sells operations and refocuses on civil construction after filing for bankruptcy protection due to a bribery scandal at a state-run oil company, Reuters reported. The filing by OAS, the third-biggest builder in Brazil last year, was the highest-profile bankruptcy filing to follow a sweeping police investigation of a price-fixing and kickback scheme at state-controlled Petroleo Brasileiro SA, or Petrobras.