Mon, Oct 17, 2016 - Page 14 News List

World Business Quick Take

Agencies

BANKING

Shareholders back merger

The shareholders of Banca Popolare di Milano (BPM) and Banco Popolare on Saturday approved a merger between the two lenders, giving the final green light to the creation of Italy’s third-largest bank by assets. Investors in Verona-based Banco Popolare, who approved the deal overwhelmingly, had been widely expected to back the move, but BPM had to overcome opposition from a group of retired employee-shareholders. The merger is the first prompted by reforms introduced by Italian Prime Minister Matteo Renzi early last year, aiming to promote such tie-ups and boost bank profitability. The creation of a new big bank, which is to be named Banco-BPM, is good news not only for the banking system but also for the government, which threw its weight behind the deal. Banco Popolare chief executive officer Pier Francesco Saviotti said the bank was working on the sale of 650 million euros (US$713.08 million) in bad loans to be completed by the year-end.

CHINA

CCB to assist Yunnan Tin

China Construction Bank Corp (CCB, 中國建設銀行), the nation’s second-largest lender, said it agreed to form an almost 5 billion yuan (US$742.94 million) debt-to-equity pact with Yunnan Tin Group Holding Co (雲南錫業集團). The agreement is part of a larger 10 billion yuan framework the two companies signed to cut Yunnan Tin’s debt ratio, the Beijing-based lender said in a statement on its Web site on Sunday. It did not provide any specifics of the agreement. The accord is the second debt-relief program Construction Bank has announced in the past week with state-owned enterprises. On Tuesday, the lender announced plans to raise 24 billion yuan for a fund to help lower Wuhan Iron & Steel Group’s (武漢鋼鐵) debt levels. The bank also flagged its involvement with Yunnan Tin Co, saying at the time it was seeking to cooperate with the company to lower its leverage.

MACROECONOMICS

Belgium agrees on budget

Belgium’s coalition government has agreed the basics of its budget, finding savings of some three billion euros to help balance the books. “Agreement,” Belgian Prime Minister Charles Michel said on Twitter late on Friday after lengthy talks finally produced an accord. Negotiations appeared blocked earlier in the week, with Michel promising to work “relentlessly” to get a deal by Saturday, when EU member states using the euro currency are supposed to submit their budgets for next year to scrutiny by Brussels. Spending cuts, especially in health, were a key sticking point along with plans to introduce a controversial capital gains tax broadly opposed by business.

SCOTLAND

Sturgeon eyes post-Brexit

The nation is to set up a trade office in Berlin, boosting its trade departments in readiness for all possibilities, including independence, after Britain leaves the EU, First Minister Nicola Sturgeon said on Saturday. The Scottish National Party (SNP) leader has raised the nation’s profile since June’s EU referendum in Britain, seizing on a new openness toward the nation in Europe since most of its population voted to remain in the bloc. Sturgeon told the SNP conference at its close that economic stability is threatened by the prospect of the UK leaving the European single market, taking Scotland with it. Sturgeon said that in order to protect business in the nation, the government would set up a board of trade, a new trade envoy scheme, expand its enterprise agency and establish a trade hub in Berlin.

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