Sun, Aug 05, 2012 - Page 15 News List

World Business Quick Take

Agencies

UNITED STATES

Treasury to sell off insurer

The Treasury Department said on Friday it expects to raise US$5 billion from its sale of American International Group stock, cutting the government’s stake in the bailed-out insurer to 55 percent. The sale, which would bring a profit of about US$300 million to the Treasury, comes as President Barack Obama campaigns for a second term and has been forced to defend his administration’s decision to use taxpayer money to prop up companies during the crisis. The Treasury Department priced the offering at US$30.50 a share, six percent above the US$28.72 price needed for the government to break even on its investment in the insurer. AIG intends to buy up to US$3 billion of the offering.

BANKING

Ex-banker in the spotlight

A 30-year-old former Barclays PLC swaps trader in New York, who was fired from the bank in 2010, is among those drawing scrutiny from prosecutors in the deepening scandal over the manipulation of global benchmark interest rates. US prosecutors in Washington are looking at Ryan Reich’s activities while at Barclays between August 2006 and March 2010, said several people familiar with the situation, who declined to be identified because the bid-rigging investigation is ongoing. Reich, now a portfolio manager with New York-based hedge fund WCG Management, was dismissed from Barclays for allegedly sending inappropriate e-mails seeking internal bank information, according to two sources familiar with the situation. One of those sources, who used to work for the bank, said the information Reich sought concerned how the LIBOR benchmark rate was going to be priced, information that could have been useful for his trading positions.

BANKING

UniCredit’s Q2 profits tumble

Italian bank UniCredit SpA on Friday said second-quarter profits dropped 67 percent as it reinforced its capital buffers by nearly 2 billion euros. The net profit of 169 million euros compared with 511 million euros in the same period last year and was below analyst forecasts for 269 million euros, according to a survey by Factset. The earnings were net of 477 million euros spent to buy back bonds in the first quarter. The bank, Italy’s largest by assets, raised provisions for bad loans by 60 percent to 1.9 billion euros “reflecting the deteriorating credit environment that unfortunately we see in Italy,’’ chief executive Federico Ghizzoni told analysts.

GREECE

ECB loans add to bailout

The European Central Bank (ECB) has saved Greece from bankruptcy for the time being by securing it interim financing in the form of additional emergency loans from the Bank of Greece, German newspaper Die Welt said yesterday. The ECB’s Governing Council agreed at its meeting on Thursday to increase the upper limit for the amount of Greek short-term loans the Bank of Greece can accept in exchange for emergency loans, the newspaper said in an advance copy of the article due to appear in yesterday’s edition. Until now the Bank of Greece could only accept T-bills up to a limit of 3 billion euros as collateral for emergency liquidity assistance (ELA), but it has applied to have this limit increased to 7 billion euros, the daily said, citing central bank sources.

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