UK banks are less than half way through posting £240 billion ($398 billion) of losses on loans and securities, a reflection of the country’s economic weakness, according to Moody’s Investors Service.
British banks are likely to record losses of at least £130 billion, in addition to £110 billion lost since the beginning of the credit crisis in 2007, Moody’s said in a report on Monday.
The company expects the sustained weakness of the UK macroeconomic environment to feed through into higher loan arrears with ensuing pressure on profitability and capital, it said.
British taxpayers have provided about £1.4 trillion of support to banks, becoming the biggest shareholder of Royal Bank of Scotland Group and Lloyds Banking Group, while seeking to shore up capital eroded by writedowns. British banks have raised about £120 billion of capital from the beginning of the credit crisis to mid-2009, Moody’s said. “We have been underweight on the banks for some time”, said Dave Bradbury who helps manage $6 billion at Canada Life in London.
Agencies
Showing posts with label losses. Show all posts
Showing posts with label losses. Show all posts
Tuesday, September 15, 2009
Wednesday, March 25, 2009
Will Infosys-Telstra deal cause job losses in India?
Bangalore-based software giant Infosys will pick up most of IBM Global Services’ multi-million dollar applications support contract with Australian software giant Telstra, after the latter’s deal with the former was scrapped following telco reducing its outsourcing partners from four to two.
According to The Australian, the decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres.
IBM GS staff was told the scratching of the vendor’s software support would represent about 50 per cent of its one billion dollar, six-year deal with Telstra, signed in early 2006.
Telstra’s decision to drop IBM was a big surprise to IBM GS staff, who expected the contract to continue until 2012.
The deal was lost not because of performance issues but because Infosys low-balled the IBM offer, sources said.
Telstra has been reviewing its IT outsourcing contracts with Satyam, EDS, IBM GS and Infosys since last year, when the telco announced it would trim its list of major IT suppliers from four to two in an effort to reduce costs and streamline its providers.
Earlier, Telstra had ended one of its information technology outsourcing contracts with International Business Machines Corp (IBM). It has now roped in Infosys Technologies for the same.
IBM Global Services' multimillion dollar applications support contract with Telstra has been scrapped as a result of the telco reducing its outsourcing partners from four to two, as per an Australian media report.
The decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres, the report said.
The Australian reported that IBM staff were told the scrapping of the vendor's software support would represent about 50% of its $1 billion, six-year deal with Telstra, signed in early 2006.
Less than a week ago, Telstra terminated its IT outsourcing contract with fraud-hit Satyam Computer Services. Telstra is the second major Australian company to do so after The National Australia Bank decided in February to suspend future work with the Indian outsourcer since the disgraced Indian outsourcer's accounting scandal came to light.
The IBM India spokesperson could not be reached for comment while the Infosys communication person said, "We are in our silent period and will not be able to comment on the issue."
Agencies
According to The Australian, the decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres.
IBM GS staff was told the scratching of the vendor’s software support would represent about 50 per cent of its one billion dollar, six-year deal with Telstra, signed in early 2006.
Telstra’s decision to drop IBM was a big surprise to IBM GS staff, who expected the contract to continue until 2012.
The deal was lost not because of performance issues but because Infosys low-balled the IBM offer, sources said.
Telstra has been reviewing its IT outsourcing contracts with Satyam, EDS, IBM GS and Infosys since last year, when the telco announced it would trim its list of major IT suppliers from four to two in an effort to reduce costs and streamline its providers.
Earlier, Telstra had ended one of its information technology outsourcing contracts with International Business Machines Corp (IBM). It has now roped in Infosys Technologies for the same.
IBM Global Services' multimillion dollar applications support contract with Telstra has been scrapped as a result of the telco reducing its outsourcing partners from four to two, as per an Australian media report.
The decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres, the report said.
The Australian reported that IBM staff were told the scrapping of the vendor's software support would represent about 50% of its $1 billion, six-year deal with Telstra, signed in early 2006.
Less than a week ago, Telstra terminated its IT outsourcing contract with fraud-hit Satyam Computer Services. Telstra is the second major Australian company to do so after The National Australia Bank decided in February to suspend future work with the Indian outsourcer since the disgraced Indian outsourcer's accounting scandal came to light.
The IBM India spokesperson could not be reached for comment while the Infosys communication person said, "We are in our silent period and will not be able to comment on the issue."
Agencies
Monday, February 9, 2009
After losses Lenovo announces management changes
Chinese PC maker Lenovo, which today announced a loss of $96.7 million for the quarter ended December 31, said CEO William J. Amelio resigned in a management reshuffle.
While Lenovo founder Liu Chuanzhi would return as the chairman of the company, present chairman Yang Yuanqing will return as CEO in the place of Amelio, Lenovo said in a statement.
Observing that the next several quarters will be "very challenging for Lenovo and the rest of the PC industry", Lenovo said the worldwide restructuring program announced on January 8 is expected to save the company approximately US$300 million in the 2009/10 financial year.
"In the past quarter, same as many other companies, Lenovo was deeply impacted by the global economic turmoil," said Lenovo CEO Yang Yuanqing. "We have taken actions to ensure that in an uncertain economy, our business operates as efficiently and effectively as possible, and continues to grow in the future."
The PC maker said its global sales of US$3.59 billion for the reporting quarter is 20 per cent less compared with the same period of 2007.
"The Group's results were impacted principally by slowdown of the Chinese PC market in which it has significant market share and demand reduction in the worldwide commercial PC segment," the company statement said.
On January 9, Lenovo had announced that the company is going tolay off 2,500 employees, nearly 11 per cent of its work force.
While Lenovo founder Liu Chuanzhi would return as the chairman of the company, present chairman Yang Yuanqing will return as CEO in the place of Amelio, Lenovo said in a statement.
Observing that the next several quarters will be "very challenging for Lenovo and the rest of the PC industry", Lenovo said the worldwide restructuring program announced on January 8 is expected to save the company approximately US$300 million in the 2009/10 financial year.
"In the past quarter, same as many other companies, Lenovo was deeply impacted by the global economic turmoil," said Lenovo CEO Yang Yuanqing. "We have taken actions to ensure that in an uncertain economy, our business operates as efficiently and effectively as possible, and continues to grow in the future."
The PC maker said its global sales of US$3.59 billion for the reporting quarter is 20 per cent less compared with the same period of 2007.
"The Group's results were impacted principally by slowdown of the Chinese PC market in which it has significant market share and demand reduction in the worldwide commercial PC segment," the company statement said.
On January 9, Lenovo had announced that the company is going tolay off 2,500 employees, nearly 11 per cent of its work force.
Saturday, January 3, 2009
US credit card cos losses could top $70 billion in 2009
Credit card companies have little to celebrate as many analysts brace for 2009 to be one of the worst years on record for consumer credit.
Losses for the industry could top $70 billion, but it is hard to predict how bad the pain will be.
US consumers have never before been so deeply in debt. There was nearly $1 trillion of credit and charge card debt outstanding as of October, up more than 25 per cent since 2003, according to the US Federal Reserve. That is in addition to $10.54 trillion in mortgage debt.
Unemployment, already at 15-year highs, is expected to rise to its highest levels since the early 1980s, when credit cards were not nearly as widespread.
In short, there's more debt than ever and fewer people are able to pay it.
"In many ways, we're in uncharted territory," said John Williams, an analyst at Macquarie Research.
Major credit losses are big trouble for Citigroup Inc, Bank of America, and other card issuers such as American Express Co and Discover Financial Services, which have seen their shares lose up to 80 per cent of their value in 2008.
The United States is not standing idly by. Citigroup received $45 billion of taxpayers' money in October and November. Bank of America has received $25 billion. American Express, which became a bank holding company, got approval last week to receive $3.4 billion from the taxpayer-funded Troubled Asset Relief Program.
Lenders, seeing potential big losses, are trying to protect themselves by tightening credit availability, which leaves consumers with fewer options.
This year's holiday shopping season was the worst since at least 1970, according to a report from the International Council of Shopping Centers.
"It is hard to see the light at the end of the tunnel," Williams said.
NOWHERE TO HIDE
No credit card company is safe. According to Citigroup analysts, more than one-fourth of the credit card portfolios of Citibank, Bank of America Corp, Capital One Corp, and Discover are subprime, which could lead to further losses.
Meanwhile, American Express is heavily exposed to troubled markets with high default rates such as Florida and California, and JP Morgan Chase & Co has to digest the portfolio of failed savings and loans company Washington Mutual.
Together, these six companies hold around 90 per cent of the total US outstanding credit card debt.
Citigroup and American Express have said they are tightening lending to mitigate their losses. JP Morgan and Bank of America declined to comment, while Capital One did not return calls seeking comment.
Credit card companies have reported increased losses. Discover, the No 4 US credit card network, posted worse-than-expected results in its fourth fiscal quarter, the first sign of the harsh deterioration of the industry, when the economic downturn picked up steam in October and November.
Discover almost doubled the money it set aside to cover credit losses. Analysts said its competitors would likely do the same in coming Credit Cards quarters, leading to lower earnings.
"Things have changed pretty rapidly in the last two months. I'm hopeful that we will see the worst in 2009, but I don't know yet," David Nelms, chief executive of Discover, told reporters in a recent interview.
Many analysts and credit card executives look at 2009 and remember the beginning of the mortgage crisis in early 2007, when lenders consistently underestimated what was coming up.
Said Chris Brendler, analyst at Stifel Nicolaus, "The risk is that things get much worse than expected."
Source: Agencies
Losses for the industry could top $70 billion, but it is hard to predict how bad the pain will be.
US consumers have never before been so deeply in debt. There was nearly $1 trillion of credit and charge card debt outstanding as of October, up more than 25 per cent since 2003, according to the US Federal Reserve. That is in addition to $10.54 trillion in mortgage debt.
Unemployment, already at 15-year highs, is expected to rise to its highest levels since the early 1980s, when credit cards were not nearly as widespread.
In short, there's more debt than ever and fewer people are able to pay it.
"In many ways, we're in uncharted territory," said John Williams, an analyst at Macquarie Research.
Major credit losses are big trouble for Citigroup Inc, Bank of America, and other card issuers such as American Express Co and Discover Financial Services, which have seen their shares lose up to 80 per cent of their value in 2008.
The United States is not standing idly by. Citigroup received $45 billion of taxpayers' money in October and November. Bank of America has received $25 billion. American Express, which became a bank holding company, got approval last week to receive $3.4 billion from the taxpayer-funded Troubled Asset Relief Program.
Lenders, seeing potential big losses, are trying to protect themselves by tightening credit availability, which leaves consumers with fewer options.
This year's holiday shopping season was the worst since at least 1970, according to a report from the International Council of Shopping Centers.
"It is hard to see the light at the end of the tunnel," Williams said.
NOWHERE TO HIDE
No credit card company is safe. According to Citigroup analysts, more than one-fourth of the credit card portfolios of Citibank, Bank of America Corp, Capital One Corp, and Discover are subprime, which could lead to further losses.
Meanwhile, American Express is heavily exposed to troubled markets with high default rates such as Florida and California, and JP Morgan Chase & Co has to digest the portfolio of failed savings and loans company Washington Mutual.
Together, these six companies hold around 90 per cent of the total US outstanding credit card debt.
Citigroup and American Express have said they are tightening lending to mitigate their losses. JP Morgan and Bank of America declined to comment, while Capital One did not return calls seeking comment.
Credit card companies have reported increased losses. Discover, the No 4 US credit card network, posted worse-than-expected results in its fourth fiscal quarter, the first sign of the harsh deterioration of the industry, when the economic downturn picked up steam in October and November.
Discover almost doubled the money it set aside to cover credit losses. Analysts said its competitors would likely do the same in coming Credit Cards quarters, leading to lower earnings.
"Things have changed pretty rapidly in the last two months. I'm hopeful that we will see the worst in 2009, but I don't know yet," David Nelms, chief executive of Discover, told reporters in a recent interview.
Many analysts and credit card executives look at 2009 and remember the beginning of the mortgage crisis in early 2007, when lenders consistently underestimated what was coming up.
Said Chris Brendler, analyst at Stifel Nicolaus, "The risk is that things get much worse than expected."
Source: Agencies
Friday, January 2, 2009
Job losses would be temporary, says Montek Ahluwalia
The government on Friday said the current economic situation could lead to some job losses, but these would only be temporary with economy poised to grow at seven per cent this fiscal.
"Certainly in sectors that are badly affected, if we are not able to completely counter the effect of recession, there may be some job losses. We hope they will be temporary," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters while briefing on the stimulus package.
He said the idea behind this package is to ensure that economy does not slow down too much.
Ahluwalia said the economy is expected to grow at seven per cent this fiscal and that will be a good performance.
"So, when I say that this package will hopefully generate a growth rate of seven per cent, that is a growth rate that is certainly consistent with the total number of jobs in the economy increasing," he said.
The Planning Commission Deputy Chairman, however, said it is not possible to completely counter the impact of an external slowdown.
"But with this package what we are doing is minimising the pain on that score," he added.
Source: Agencies
"Certainly in sectors that are badly affected, if we are not able to completely counter the effect of recession, there may be some job losses. We hope they will be temporary," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters while briefing on the stimulus package.
He said the idea behind this package is to ensure that economy does not slow down too much.
Ahluwalia said the economy is expected to grow at seven per cent this fiscal and that will be a good performance.
"So, when I say that this package will hopefully generate a growth rate of seven per cent, that is a growth rate that is certainly consistent with the total number of jobs in the economy increasing," he said.
The Planning Commission Deputy Chairman, however, said it is not possible to completely counter the impact of an external slowdown.
"But with this package what we are doing is minimising the pain on that score," he added.
Source: Agencies
Tuesday, November 18, 2008
Citigroup to fire 52,000 jobs globally
Citigroup Inc revealed plans to cut 52,000 jobs by early next year in a dramatic move to restore the No. 2 U.S. bank to health as it combats mounting debt losses and sagging economies worldwide.
The cuts announced by Chief Executive Vikram Pandit on Monday affect 15 percent of Citigroup's workforce, and are in addition to 23,000 jobs eliminated between January and September.
Citigroup plans to slash expenses by as much as 20 percent, and spend a total of $50 billion to $52 billion in 2009. That compares with $61.9 billion over the last four quarters.
The cuts will be global, affecting many regions and business lines, including the retail and investment banks, a person close to the matter said. About one-half will come from layoffs and attrition, and the rest from the sale of units, such as the German retail banking business.
Pandit became Citigroup's chief executive last December, and has faced much criticism from investors and others for failing to implement a workable turnaround plan. The New York-based bank has lost $20.3 billion in the last year, and some analysts do not expect it to make money before 2010.
"As the economy continues to weaken they will have greater credit losses," said Michael Holland, founder of money manager Holland & Co in New York. "Cuts will lessen the losses, but they in no way guarantee profitability."
Pandit told employees in a memo that Citigroup has spent the last year "getting fit," and projects a "difficult" 2009 for clients and customers.
Citigroup's latest cuts are the most by any U.S. company since the global credit crisis began last year. They are also the second most ever, trailing the 60,000 that International Business Machines Corp IBM announced in 1993, according to outplacement firm Challenger, Gray & Christmas Inc.
The latest cuts would leave Citigroup with about 300,000 employees, down 20 percent from the end of 2007 and about the same number it had at the end of 2005. People at the bank said the cuts should be made by the first couple of months of 2009.
The cuts announced by Chief Executive Vikram Pandit on Monday affect 15 percent of Citigroup's workforce, and are in addition to 23,000 jobs eliminated between January and September.
Citigroup plans to slash expenses by as much as 20 percent, and spend a total of $50 billion to $52 billion in 2009. That compares with $61.9 billion over the last four quarters.
The cuts will be global, affecting many regions and business lines, including the retail and investment banks, a person close to the matter said. About one-half will come from layoffs and attrition, and the rest from the sale of units, such as the German retail banking business.
Pandit became Citigroup's chief executive last December, and has faced much criticism from investors and others for failing to implement a workable turnaround plan. The New York-based bank has lost $20.3 billion in the last year, and some analysts do not expect it to make money before 2010.
"As the economy continues to weaken they will have greater credit losses," said Michael Holland, founder of money manager Holland & Co in New York. "Cuts will lessen the losses, but they in no way guarantee profitability."
Pandit told employees in a memo that Citigroup has spent the last year "getting fit," and projects a "difficult" 2009 for clients and customers.
Citigroup's latest cuts are the most by any U.S. company since the global credit crisis began last year. They are also the second most ever, trailing the 60,000 that International Business Machines Corp IBM announced in 1993, according to outplacement firm Challenger, Gray & Christmas Inc.
The latest cuts would leave Citigroup with about 300,000 employees, down 20 percent from the end of 2007 and about the same number it had at the end of 2005. People at the bank said the cuts should be made by the first couple of months of 2009.
Subscribe to:
Posts (Atom)