Sat, Aug 04, 2012 - Page 15 News List

World Business Quick Take

Agencies

BANKING

RBS hurt by provisioning

The Royal Bank of Scotland (RBS) yesterday reported a net loss of £466 million (US$723 million) for the second quarter as it set aside £310 million to cover the costs of a computer crash and compensation for mis-selling products to customers. RBS, which is 82 percent owned by British taxpayers, said it had made a £125 million provision to pay the costs of a computer breakdown, which caused havoc with customer accounts in June. It also set aside £50 million for compensating loan customers who were mis-sold complex interest rate swaps. It also made an additional provision of £135 million to compensate customers who bought payment protection insurance that they didn’t need, raising the total provision for insurance mis-selling to £1.3 billion. The loss for the three months ending June 30 was down from a loss of £897 million a year earlier. Operating profit fell 22 percent to £650 million and revenue fell 5.4 percent to £6.4 billion.

EUROZONE

Private PMI shrank in July

Eurozone private sector activity contracted last month for the 10th time in 11 months, with data now consistently showing the downturn becoming “entrenched” in Germany, a key survey showed yesterday. The purchasing managers’ index (PMI) compiled by business research firm Markit was stuck at 46.5 last month according to a final reading, indicating another month of contraction in activity. “The final PMI data for July confirm the message from the earlier flash estimate that the eurozone continued to contract at a quarterly rate of approximately 0.6 percent in July, suggesting the region looks set for a second consecutive quarterly decline,” Markit said. The readings showed manufacturing activity at a three-year low last month, with Germany and France posting three-year-high rates of decline.

INTERNET

LinkedIn profit falls 38%

LinkedIn Corp’s net income fell in the latest quarter as the professional networking site spent more money to grow its business. However, revenue grew faster than expected, and the company raised its forecast for the year. LinkedIn’s stock increased after the results came out on Thursday, a reprieve after tepid news from other newly public Internet companies — namely Facebook and Zynga. LinkedIn, which went public more than a year ago, is among the best-performing stocks of the bunch. LinkedIn earned US$2.8 million, or US$0.03 per share, in the second quarter. That’s down 38 percent from US$4.5 million, or US$0.04 per share, a year earlier. Adjusted earnings, which exclude stock compensation expenses and other items, were US$18.1 million, or US$0.16 cents per share, matching analysts’ expectations. Last year, LinkedIn had adjusted earnings of US$10.8 million, or US0.10 per share.

MINING

BHP writes down assets

BHP Billiton yesterday wrote down the value of its US shale gas assets by US$2.84 billion, prompting CEO Marius Kloppers, who was reportedly paid more than US$15 million last year, to forgo his annual bonus. Mike Yeager, BHP’s head of petroleum division, will also not be paid any extra for the past fiscal year after the massive impairment charge on the assets bought last year. The company also cut the value of its Australian nickel division by US$450 million, with the price of the commodity down and costs rising. Plunging US gas prices forced the global mining giant to book a writedown on the value of the Fayetteville shale gas assets in Arkansas.

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