1. Saudi’s Riyad Bank posts 30 pct rise in Q3 profits


    Analysts surveyed by Reuters expected the firm to post on average, 784.6 million riyals in the third-quarter.

  2. TEXT-Fitch affirms UniCredit Bank AG at ‘A+’;outlook stable


    The ratings reflect Fitch’s view of an extremely high likelihood of support by the Federal Republic of Germany if needed. Given its ownership structure, Fitch believes HVB would, however, first look to its 100% owner, UniCredit S.p.A. (UC; ‘A’/Rating Watch Negative/’F1’) for support, if needed. HVB’s Long-term IDR could be downgraded if Fitch came to the conclusion that government support in Germany was being diluted through a combination of regulatory, legal and political changes.HVB’s Viability Rating reflects the bank’s standalone credit strength which benefits from its well entrenched regional banking franchise and strong capitalisation (Fitch core capital ratio at end-H111: 18.1%). While the loan/deposit ratio (end-H111: 174%) shows some reliance on wholesale funding, sources seem well diversified by type and geography. HVB manages its liquidity prudently and has substantial counterbalancing capacity, based on its pool of central bank eligible and unencumbered assets. In this context, Fitch considers HVB’s exposure to its parent UC has increased over time. Fitch recognises that HVB’s relative funding advantage compared to its parent is positive for UC’s overall funding profile. However, at the same time, being part of UC group might pose potential contagion risk for HVB’s funding franchise from further negative developments in the European sovereign crisis, which cannot be fully excluded.HVB’s credit profile is also characterised by income volatility due to the bank’s corporate and investment banking focus, and moderate levels of sustainable operating profitability. However, Fitch expects income volatility to reduce, as the bank increases its focus on customer-driven business and reduces riskier exposures such as private equity.HVB’s CIB business continues to drive financial performance, with profit contribution from retail and private banking remaining small. Through an initiative to enhance the focus on clients’ needs and organisational efficiency called One4C (One for Customers), Fitch expects some improvement in the profitability of weaker segments. Fitch acknowledges that retail banking operations provide HVB with access to more stable retail deposits. However, a commercial benefit cannot be easily quantified.Across categories, asset quality continued to stabilise or improve in H111. Fitch expects this general trend to continue in coming quarters, but given the fragile economic recovery this trend could reverse quickly. In this context, some risk pockets remain, including risks from high concentrations in the bank’s leveraged buyout exposure and project finance business. Non-strategic assets are being worked out and the bank continues to reduce its exposure to riskier asset classes.The Short-term rating of the Commercial Paper Programmes of UniCredit US Finance LLC, which is wholly owned by HVB, is equalised with HVB’s Short-term IDR and reflect the likelihood of systemic support.The ratings of HVB’s hybrid capital instruments reflect the financial standing of the UniCredit group. While Fitch acknowledges that the German regulator could demand a deferral of coupon payment on these profit-linked instruments in line with the terms and conditions of the instruments, the agency does not anticipate such intervention in light of the bank’s standalone financial profile.

  3. WRAPUP 1-EU may offer banks time to hit new capital target


    * Losses on bonds, recaps could hit fragile economies* Greece banks could endure loss on bonds of up to 30 pctBy Philipp Halstrick and John O’DonnellFRANKFURT/BRUSSELS, Oct 13 (Reuters) - European banks could get up to six months to strengthen their capital under plans aimed at halting the region’s debt crisis, giving them time to raise funds privately in the hope of averting another damaging credit crunch.EU officials said on Thursday that weak banks may get the extra time to bolster their balance sheets after a rapid health check currently underway.Euro zone leaders are insisting that banks recapitalise, in an attempt to halt the euro zone crisis and shore up investor confidence.”A three- to six-month deadline is being considered,” said one EU official, speaking on condition of anonymity. “No decision has been taken.”The plan means Deutsche Bank and other top European banks could have to raise billions of euros to meet a 9 percent core capital target and withstand hefty losses on sovereign bonds.The European Banking Authority, which is assessing banks’ capital needs, is likely to mark down the value of banks’ holdings of sovereign debt to market value and require lenders to hold a 9 percent core Tier 1 capital ratio, an EU source told Reuters.Deutsche Bank, Germany’s flagship lender, would need 9 billion euros in fresh equity to reach that level, two people with direct knowledge of the bank’s finances said on Thursday.Deutsche Bank declined to comment, but in separate remarks the bank’s chief executive Josef Ackermann said it would do all it could to avoid a forced recapitalisation and added it had enough funds of its own to cope with a crisis.Setting the bar at 9 percent would leave European banks with a capital shortfall of about 260 billion euros, based on a two-year recession and applying current market prices to holdings of Greek, Irish, Italian, Portuguese and Spanish government bonds, according to Reuters Breakingviews data.Royal Bank of Scotland , Unicredit , Deutsche Bank, BNP Paribas and Societe Generale would all need over 12 billion euros based on that data. Some 67 of 90 banks tested would need capital.Banks are already attempting to sell assets and shrink their loan books to lift capital ratios. They could also be told to cut pay for staff and dividends for investors to preserve cash.But that could force them to cut lending to companies and risk derailing economic recovery, bankers have warned.”We need to find the right balance between stricter regulation of the financial sector and the impacts these have on the economy as a whole,” Ackermann said.All banks will be looking to cut back on lending that uses a lot of capital and costly funding such as asset finance, unsecured consumer finance, trade finance and some business lending, analysts at Morgan Stanley said.”The risks of a big credit squeeze are very real, and we hope the methodology and process looks to limit this,” said Huw van Steenis, analyst at Morgan Stanley.PRIVATE FUNDS… THEN TAXPAYERSEuropean officials said banks should first turn to private investors rather than governments to improve capital, signalling that they needed time to do this.”The timeline is very important,” said one official. “The current market circumstances are not ideal. At the same time, we need to (regain) confidence as soon as possible.”There is likely to be limited private funding available for banks, leaving many at risk of needing taxpayer funds or the new euro zone EFSF rescue fund as a last resort.Greece’s banks could have to raise over 30 billion euros under the plan, as they face big losses on their holdings of domestic bonds.Banks are facing losses of 39 percent on their Greek bonds under a private sector rescue plan agreed in July, above the original estimate of a 21 percent hit, due to a rise in Greece’s risk profile.Greek banks could endure a loss of up to 30 percent on the bonds but could not stand significantly bigger haircuts, which would also hurt the economy, Greek banking sources said.European leaders are still discussing the recapitalisation plans, with many details still subject to change, and face intense lobbying from banks and some countries who say it is too harsh. Proposals are expected to be presented to a meeting of European leaders on Oct. 23.The new standard is likely to be a 9 percent core tier 1 ratio, a key measure of a bank’s financial health, based on a tighter definition of capital than used now, although not as strict as that under new Basel III rules when in full forceAnalysts at Credit Suisse said a 9 percent capital level would leave banks in need of 220 billion euros, with RBS, Deutsche Bank and BNP Paribas most in need.Ackermann, Germany’s most high-profile banker, said it was doubtful whether a blanket recapitalisation of European banks — a measure being considered by politicians in Germany and France — would help solve the sovereign debt crisis.”It is not the capital position which is the problem, but the fact that sovereign debt as an asset class has lost its risk-free status,” Ackermann told a conference in Berlin. “The key to the solution is therefore in the hands of governments, to restore confidence in the solidity of state finances.”

  4. UPDATE 1-W.House working with Congress on yuan bill issues


    “If this legislation were to advance we would expect those concerns to be addressed,” said White House Press Secretary Jay Carney, reiterating Washington’s view that China needs to address the undervaluation of the yuan.The Democratic-controlled Senate passed a bill on Tuesday to slap tariffs on Chinese goods for keeping the yuan low to subsidize its exports at the cost of U.S. jobs. The bill now faces the Republican-controlled House of Representatives, who oppose the measure and warn that it could start a trade war.”We share the goal of the legislation in taking action to ensure that our workers and companies have a level playing field with China, including addressing the undervaluation of their currency,” Carney said, adding:”Aspects of the legislation do … raise concerns about consistency with our international obligations, which is why we are in the process of discussing with Congress those issues.”China on Wednesday urged the Obama administration to block the bill, raising the risk of further strains between the world’s top two economies.

  5. New Zealand charges captain of stricken ship as seas claim cargo


    The 47,230-tonne Liberian-flagged Rena has been stranded on a reef 12 nautical miles off Tauranga on the east coast of New Zealand’s North Island since running aground a week ago.The captain has been charged “for operating a vessel in a manner causing unnecessary danger or risk”, which carries a maximum fine of NZ$10,000 ($7,810) or 12 months in prison.Local media reported the ship’s master, a 44-year-old Philippine national, made a brief appearance in court and was bailed for one week, without making a plea. His name was suppressed.Heavy swells and strong winds pounded the vessel for a second day on Wednesday, sending empty containers tumbling off the ship, which is listing at around 18 degrees, into the heaving seas.”The bow appears to be still firmly wedged onto the reef, we have lost more than 30 containers from the stern and midships,” Maritime NZ director Catherine Taylor told reporters.Some of the containers were reported to be bobbing in the heavy seas and others have been washed up on a small island, Motiti, about eight km (five miles) from the ship.The ship was carrying 1,368 containers, 11 of which are said to have hazardous substances in them. Shipping using the port of Tauranga, which is the country’s biggest export port, was being re-routed from the containers.Authorities said the bad weather was helping to break up and disperse the estimated 300 tonnes of oil that escaped from the ship.”That’s a little bit frustrating because once the oil is on the beach we can actually deal with it, we can remove it from the beach relatively easily,” said Ian Niblock, a spokesman for the clean up operation.Oil is now scattered along 25 km (16 miles) of the district’s long, golden beaches, which are a magnet for surfers. Nearby waters have an international reputation for big-game fishing.Several hundred people were scraping the clumps of thick, toxic, fuel oil, some as large as dinner plates, into plastic bags and large bins.Booms have been placed over some harbour entrances to keep oil out of wetland and wildlife habitats. Around 50 seabirds have died and teams of naturalists have scrubbed and treated 20 more for oil contamination.Refloating and salvage of the ship are the responsibility of the owner, Daina Shipping, a unit of Greece’s Costamare Inc. , and salvage experts, but any plan needs official approval.A floating crane able to remove containers from the ship is on its way from Singapore.

  6. How to cope with a control-freak boss


    Controlling bosses can make the workplace a living hell, but winning their trust is essential to improving office relations. So says Kaley Klemp, an executive coach and co-author of “The Drama-Free Office: A Guide to Healthy Collaboration with Your Team, Coworkers, and Boss”. “Trust is a big, big deal,” said Klemp, who wrote the book with her fellow coach and dad, Jim Warner. “Controllers are looking for those who are on their side.” With “National Boss Day” right around the corner on Oct. 17, Klemp said now’s a good time to think about how to smooth things over with an unruly micromanager before a bad situation gets worse. According to Klemp’s statistics, some 46 percent of employees work for or have worked for an unreasonable boss at some point in their careers. Once underlings demonstrate support and willingness to go the distance for a micromanaging boss, that person is more apt to be receptive to the worker’s needs, said Klemp, noting that controllers typically reward loyalty. Beyond developing a good rapport, those under the grips of a controller would do well to ask for clear-cut goals and expectations, she said. That way the employee can deliver results that will make the boss look better. “Have their best interests in mind,” said Klemp, who notes controllers are typically poor delegators. “Understand where they’re coming from.” Launching a surprise attack on the boss to voice complaints – alone or with co-workers – is among several tactics that can backfire and even lead to dismissal, she said. Controllers are not intentionally trying to be difficult, she said, but are often subject to unseen pressures from above, such as a board of directors, or investors. “Their intention is they want the best results,” she said. “It’s not like they woke up one morning and said ‘I wonder if I can be a jerk.’”