Banking union deal struck
Finance ministers on Wednesday reached a banking union accord which will hand Brussels unprecedented new powers to prevent failing banks from wrecking the bloc’s economy, official sources said. The Single Resolution Mechanism will close failing banks before they can damage the wider economy and, along with a new supervisory regime, forms the banking union. This was drawn up in response to the financial and debt crises that brought down many banks and nearly drove the eurozone to its knees as governments had to be bailed out after rescuing their lenders.
Citigroup, AIA ink contract
Citigroup Inc has chosen AIA Group Ltd to sell life insurance through its branch network in 11 Asia-Pacific countries as the US bank slashes the number of insurers it partners with in the region. The exclusive 15-year agreement allows AIA to sell products to the US bank’s customers in countries from China to Australia, Citigroup and AIA said in separate statements yesterday. The partnerships will be set up in each territory next year, Hong Kong-based AIA said.
Ford stock hit by guidance
Ford Motor Co shares tumbled more than 6 percent on Wednesday after the company forecast disappointing profit for next year and said its mid-decade profit margin target was at risk. The company expects full-year pre-tax profit to come in at US$7 billion to US$8 billion next year, below the US$8.5 billion expected for this year. Most analysts were projecting profits to rise next year. Ford said earnings will be dragged down from the effects of an unusually busy schedule of new car launches next year that will cause higher startup costs and force lower prices on vehicles being phased out.
Facebook, banks face suit
A US federal judge said Facebook Inc chief executive Mark Zuckerberg and dozens of banks must face a lawsuit accusing the social media company of misleading investors about its financial condition before its US$16 billion initial public offering last year. In a decision made public on Wednesday, US District Judge Robert Sweet in Manhattan said investors could pursue claims that Facebook omitted material information from its registration statement.
SAC manager convicted
A portfolio manager for one of the largest US hedge funds who was accused of using insider trading to boost sagging results in 2007 has been found guilty of all charges at a New York City trial. A jury in a Manhattan federal court issued the verdict for Michael Steinberg on Wednesday. Steinberg’s case was the first to result from the US’ crackdown on insider trading at SAC Capital Advisors. The Connecticut-based firm this month agreed to pay a record US$1.8 billion to settle insider trading charges.
Oracle Q3 income dips
Oracle’s net income for the three months ending last month edged down, hurt by flat revenue from new software licenses and cloud software subscriptions, but still beat Wall Street predictions. The business software maker earned US$2.55 billion, or US$0.56 per share, compared with US$2.58 billion, or US$0.53 per share, in the same quarter a year ago. Excluding charges, the firm posted an adjusted profit of US$0.69 per share for the recent quarter. Revenue rose 2 percent to US$9.28 billion from US$9.09 billion, it said.