Blog Posts by Stacy Curtin

  • [$$] Barclays Profit Takes Hit From Asset Sales

    LONDON—Barclays PLC on Friday said that first-half net profit slipped nearly a third as the bank sucked up losses selling down unwanted assets and put aside cash to cover rising bad loans.

    Total income was down 9% to £11 billion ($14.49 billion) in the first six months of the year. Net profit fell to £1.1 billion from £1.6 billion the year before.

    Barclays is reshaping its operations. After cutting dividends the bank is in the process trying to speed its slimming down, finding a buyer for a range of Barclays’s businesses, including a stake in its African unit. The bank recorded a loss before tax of £1.9 billion selling down these assets.

    Barclays was also hit by sharply rising impairments in both its credit card business and lending to oil and gas companies. The bank put aside an extra £400 million to compensate customers sold insurance products they didn’t need.

    Income at its U.K. retail business was flat for the year, with growth in

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  • Daybreak: What You Need to Know Today July 29

    Countdown's Anna Edwards gives you the top stories on Daybreak, Bloomberg's new custom morning briefing. Details surrounding the yen's surge as Kuroda disappoints, European bank stress-test results - and more - are available on {DAYB}.

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  • Barclays pretax profit falls 21 percent as non-core business weighs

    British bank Barclays (London Stock Exchange: BARC-GB) reported a 21 percent drop in first-half group profit before tax as the costs of disposing its non-core business weighed on earnings.

    Statutory group profit before tax was £2.06 billion ($2.71 billion), down 21 percent from the same period a year ago.

    The bank said that its core business made a pretax profit of £3.97 billion, up 19 percent year-on-year, but that its non-core business had made a £1.9 billion loss, mainly due to a cost of £372 million related to the disposal of its French business.

    It stressed that as it wound up non-core assets, its earnings would improve.

    Barclays' share price opened up 1.89 percent in Friday trading.

    Barclays' Chief Executive Jes Staley told CNBC on Friday that he was looking forward to "clean air" in 2017 after its non-core business was wound-up.

    "Our core business of the transatlantic consumer, corporate and investment bank generated a return on tangible equity (ROTE) of 11 percent,

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  • British Airways parent IAG SA radically lowered its earnings target for 2016, citing the impact of the U.K.’s decision last month to quit the European Union.

    Operating profit excluding one-time items is now expected to grow by a low double-digit percentage, down from the 70 percent increase anticipated prior to the June 23 Brexit vote, the London-based company said in a statement Friday.

    IAG Chief Executive Officer Willie Walsh warned a day after the poll that earnings would no longer meet the earlier target as economic uncertainty following the “Leave” campaign victory puts some people off travel. The weakening of the pound also means U.K. receipts will be worth less when translated into euros, in which the group reports.

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    Operating profit in the second quarter, which ended a week after the EU poll, increased to 555 million euros ($615 million) from 530 million euros a year earlier, boosted by lower

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  • Want Want's New Currency Leaves Same Old Problems

    You know what I want, what I really really want?

    Snack and beverage maker Want Want China wants to change its reporting currency to yuan from U.S. dollars, because factors affecting the dollar “have no direct relevance” to its operations. The vast majority of its sales are in China. Fair enough, but that has been true since it was listed in Hong Kong in 2008.

    The real reason, probably, is that reporting in dollars no longer flatters Want Want’s results. The yuan has weakened 7% against the dollar since last summer.  And there is one thing the currency change can’t help. While its sales are in yuan, it actually does have a lot of dollar exposure. Want Want has $1.3 billion in borrowing, mostly in dollars, which it doesn't really need since it sits on $1.4 billion of cash. The dollars are essentially used for a giant “carry trade” – borrowing in dollars and depositing in yuan, a popular profit enhancer for Chinese companies over the years. That worked, once upon

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  • Engie CFO Confident Company Can Execute Asset Plan

    Engie SA, the French utility formerly known as GDF Suez, said first-half profit fell 6.9 percent as oil and gas prices dropped and warm weather at home curbed heating demand. Net recurring income declined to 1.5 billion euros ($1.7 billion) from 1.6 billion euros a year earlier, Engie said Thursday in a statement. The company, based in Courbevoie outside Paris, maintained full-year forecasts. Engie said in February it would sell 15 billion euros of assets and cut 1 billion euros of costs by 2018 to reduce its exposure to oil, gas and power prices that had tumbled amid oversupply and government subsidies for clean energy. Engie CFO Judith Hartmann discusses with Bloomberg's Anna Edwards on "Countdown."

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  • The world’s biggest pension fund posted the worst annual performance since the global financial crisis, with losses exacerbated by unfavorable currency moves and a foray into equity markets.

    Japan’s $1.3 trillion Government Pension Investment Fund lost 3.8 percent in the year ended March 31, or 5.3 trillion yen ($51 billion), the retirement manager said Friday in Tokyo. That’s the biggest drop since the fiscal year ended March 31, 2009. GPIF lost 10.8 percent on domestic equities and 9.6 percent on shares in other markets, while Japanese bonds handed the fund a 4.1 percent gain.

    The annual loss -- GPIF’s first since doubling its allocation to stocks and paring domestic bond holdings in October 2014 -- came during a volatile stint for markets. Japanese shares sank 13 percent in the year through March while the yen climbed 6.7 percent against the dollar, reducing returns from overseas investments. The only asset class to post a profit was local debt, which jumped in value as the Bank of

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  • Iron ore seems to be finally turning a corner

    The market for iron ore has in decline since 2011 amid an extended commodities crash, but things may be turning the corner for the steel-making commodity.

    How strong the recovery will be, however, remains uncertain. The world's biggest iron ore producers have maintained their output guidance for 2016, as China 's appetite for the commodity firms, but supply growth is unlikely to return to old highs anytime soon.

    On Thursday, Brazilian iron ore giant Vale (Sao Paulo Stock Exchange: VALE'A-BR) gave an encouraging outlook in its second-quarter results announcement, noting a rise in global steel production, which it said grew 6.1 percent on-quarter in Q2. In China alone, steel production growth was 9.2 percent in that period.

    "Steel demand improved in China, supported by the credit easing started in 2H15," Vale said.

    "Investments in the housing sector increased while investments in infrastructure remained stable in 1H16. The higher steel demand boosted prices and encouraged

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  • WWF calls for crack down on 'tiger farms'

    The World Wildlife Fund on Thursday urged Asian states to investigate all tiger breeding centres and crack down on any involved in black-market animal trade.

    On the eve of the International Day of the Tiger, WWF said it was crucial for governments to identify and close so-called "tiger farms", which are distinct from zoos or breeding centres with a legitimate conservation mission.

    Tiger farms have been linked to the highly lucrative and internationally prohibited trade in tiger parts.

    The conservation group estimated that there remained 200 tiger farms in Asia, mostly in China, Laos, Vietnam and Thailand.

    "Closure of these operations... would significantly boost efforts to save the world’s remaining wild tigers," WWF said in a statement.

    The tiger population in farms is about 8,000, more than double the estimated 3,900 living in the wild, WWF said in a statement.

    The so-called Tiger Temple in western Thailand was closed in May after Thai wildlife officials discovered dozens of dead

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  • Barclays Profit Drops on Loss From Asset Disposals

    Barclays Plc said profit fell by more than half in the second quarter as the bank posted a 1.1 billion-pound ($1.4 billion) pretax loss from the unit that houses the businesses and assets its trying to sell or wind down.

    Pretax profit, excluding notable items, fell to 763 million pounds ($1.01 billion) from 1.62 billion pounds a year ago, the lender said in a statement Friday. That missed the 985 million-pound average estimate of six analysts compiled by Bloomberg.

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    “Non-core rundown -- the key to unlocking the full earnings power of that core -- has good momentum, and we remain committed to closing the unit in 2017,” Chief Executive Officer Jes Staley, 59, said in the statement.

    Staley’s nascent turnaround effort at Barclays was dealt a blow by Britain’s vote in June to leave the European Union, just months after he decided to retreat from Asia and Africa and refocus on the U.K. to revive profitability.

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