Citi, BofA, grapple with stress tests Citigroup has told US regulators it could fill the capital shortfall identified in the government's "stress test" by selling more businesses and taking fresh steps to reduce its balance sheet, in efforts to avoid extra government aid if the authorities insist on a capital increase. Bank of America, another lender whose test has highlighted the need for funds – possibly up to $70bn in extra capital - is in talks with regulators over its needs and the possibility of converting the government's preferred shares into common stock, bankers said. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55271/citi-bofa-grapple-wi
| Citi asks permission to pay bonuses Citigroup has asked US Treasury for permission to pay special bonuses and is looking for ways to free an energy-trading unit from government restrictions, reports the WSJ. Vikram Pandit, Citi's CEO, asked US Treasury secretary Tim Geithner earlier in April if it could pay stock-based "retention" bonuses to employees but the government has yet to decide. It is unclear how much Citi would pay out if the request is approved. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55270/citi-asks-permission
| Important request from FT Alphaville Posted at 05:30 by Paul Murphy This is a shameless appeal: FT Alphaville is proud to have been nominated for a Webby - generally regarded as the top awards across the internet. But we need your help. Each category has a judges' award and also a 'People's Voice' award, where you have the casting vote. Go here (http://pv.webbyawards.com/) to the People's Voice site. Register and then find the "Blog - Business" category under the "Marketplace" section. We're up against some tough competition - including Richard Branson's Business Stripped Bare blog. So thanks for reading - and thanks for your support. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55254/important-request-fr
| Chrysler's lenders agree concessions The Obama administration on Tuesday extracted deep concessions from holders of Chrysler's $6.9bn debt, buying time for the troubled carmarker. The four principal lenders, which hold about 70% of the debt, agreed in principle to swap the debt for $2bn in cash, paving the way for a heavily restructured Chrysler, part-owned by Fiat. The Italian carmaker expects to sign a partnership with Chrysler on April 30, the US government-set deadline for an alliance and a restructuring deal with the autoworkers union and creditors. See this article online.
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| Swine flu spread points to pandemic Barack Obama sought an extra $1.5bn from Congress on Tuesday to battle the spread of swine flu, as he called for funds to build stockpiles of antiviral drugs and vaccines as other countries took measures against a likely global pandemic. The US reported 64 infections across five states, although Bloomberg reports that NYC mayor Michael Bloomberg said "hundreds" of students in his city are sick with suspected cases. Israel and NZ also reported confirmed cases. Japan cancelled visa-free travel from Mexico, while the US, EU and other governments advised against non-essential travel to Mexico See this article online.
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| Moody's warns on swine flu impact As concerns over a swine flu pandemic continued to affect the financial markets, Moody's estimated in a research note on Tuesday that the macroeconomic impact of a mild flu pandemic could cost 1.4m lives and reduce global GDP by 0.8% or $330bn. Shares in airlines, tour operators and some agro-food producers dipped, along with prices of pork products and airline fuel, while pharmaceutical makers of antiviral medicines and vaccines performed strongly. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55267/moodys-warns-on-swin
| Pension funds call for new BofA board The two largest US pension funds, Calpers and Calstrs, are calling for removal of the board of Bank of America, including Ken Lewis, the chairman and chief executive. Both funds will vote against the election of all 18 BofA directors at Wednesday's board meeting in North Carolina. They join other institutional investors such as TIAA-Cref and the Florida pension plan, which oppose the re-election of Lewis and other directors. Even if they can muster enough votes to retain their positions, the opposition increases pressure on them. See this article online.
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| Fortis rebels fail to derail meeting A shareholder vote to approve the sale of Fortis Bank to BNP Paribas had to be adjourned after people hurled shoes at the management of the Belgian bank's erstwhile holding company. Jozef De Mey, chairman of Fortis Holding, which owned the bank before last year's nationalisation, was forced to call a temporary suspension to the meeting in Ghent. The sale to BNP of France was ultimately approved by 73% of votes, due to the support of large institutions, despite calls of "treachery" from some of the estimated 3,300 shareholders present. See this article online.
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| EDF, RWE teams lead UK nuclear bids The UK government could make more than £400m in the hotly-contested auction of land to build nuclear power stations, as skyrocketing prices on Tuesday forced out one of the three main bidders. The consortium of Spain's Iberdrola, French utility GDF Suez and Britain's Scottish and Southern Energy quit the race, leaving EDF of France and the German partnership of RWE and Eon to continue in a bid process launched almost two months ago. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55264/edf-rwe-teams-lead-u
| Deutsche Bank back in black Deutsche Bank on Tuesday said it bounced back into profit in the 2009 first quarter after a disastrous last quarter of 2008. Better trading for many of Deutsche's key debt businesses helped it lift net income to €1.2bn ($1.5bn), which exceeded analysts' forecasts and compared with a net loss of €141m a year ago. In the prior quarter – when Deutsche's trading positions went badly wrong following Lehman Brothers' collapse – the bank lost €4.8bn. The results came hours after Germany's largest bank said chief executive Josef Ackermann would stay on in his post for a further three years. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55263/deutsche-bank-back-i
| BBVA Q1 profits fall 14% BBVA, Spain's second-biggest bank, on Tuesday reported a 14.2% year-on-year decline in Q1 net profits, to €1.24bn ($1.6bn), as asset writedowns and bad loan provisions offset improved net interest income. The result was distorted by a one-off gain from asset sales last time, according to the bank. With this included, profits were down nearly 37% from a year ago, it said. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55262/bbva-q1-profits-fall
| ANZ H1 profit falls 28% ANZ, Australia's fourth-largest lender, said on Wednesday that profit fell 28% in the first half as bad debts almost doubled, reports Bloomberg. The stock slumped nearly 5%, the most in more than two months, after the bank reported that net income dropped to A$1.42bn ($1bn) in the six months to March 31, from A$1.96bn a year earlier. The bank's credit impairment charge jumped 98% to A$1.44bn. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55261/anz-h1-profit-falls-
| Australia's NAB sees profits slide National Australia Bank set the scene for Australia's bank reporting season on Tuesday, announcing a large increase in bad debt charges and warning that market conditions had worsened. Australia's largest lender said net profits slipped 1% to A$2.6bn in the six months ended March, while cash earnings fell 9% to A$2bn, at the lower end of market estimates. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55260/australias-nab-sees-
| UK's DSG plans £300m cash call DSG International, owner of the Currys and PC World retail chains, is poised to raise about £300m after sounding out shareholders on a rights issue and placing, which could come as early as this week. DSG's complex cash call is expected to involve a conventional rights issue alongside a placing of new shares with both existing and new investors, in an effort to broaden the shareholder base. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55259/uks-dsg-plans-300m-c
| JJB agrees unusual restructuring JJB Sports has become the first listed UK company to be saved from administration by agreeing a debt restructuring with creditors using a rarely successful insolvency process. Creditors of JJB Sports overwhelmingly supported the revised payment scheme that uses a company voluntary arrangement, saving 12,000 jobs. Richard Fleming, head of restructuring at KPMG, which is arranging the CVA, described the deal as ground-breaking and believes other companies, whose alternative is insolvency, will pursue similar deals. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55258/jjb-agrees-unusual-r
| Corus steel deal in jeopardy Nearly 2,000 jobs at Anglo-Dutch steel company Corus's plant on Teesside in north-east England were in jeopardy Tuesday night after it emerged that a deal to sell the plant to an Italian company was in danger of collapse. Corus, owned by Tata of India, three months ago concluded an outline agreement to sell the Teesside plant for $480m to a consortium led by Mantova-based Marcegaglia. But Steno Marcegaglia, chairman and founder of the family-owned company, is rethinking the deal in light of the steel industry crisis. See this article online.
http://ftalphaville.ft.com/blog/2009/04/29/55256/corus-steel-deal-in-
| Overnight markets: Fearful Japanese markets were closed but elsewhere in Asia, stocks rose for the first time in three days on signs of improved earnings in the region. Futures on the S&P500 index added 0.3% after the gauge lost 0.3% on Tuesday as concerns that banks need more capital and the swine-flu outbreak will thwart an economic recovery offset a jump in consumer confidence. Asian markets (Wed - Japan closed)
03:00 BST
Nikkei (Tues) down 232.57 (-2.67%) at 8,493.77
Topix (Tues) down 21.11 (-2.53%) at 811.99
Hang Seng (Wed) up 274.87 (1.89%) at 14,829.98 US markets (Tues)
S&P500 down 2.35 (-0.27%) at 855.16
DJIA down 8.05 (-0.10%) at 8,016.95
Nasdaq down 5.60 (-0.33%) at 1,673.81 European markets (Tues)
FTSE100 down 70.61 (-1.69%) at 4,096.40
Eurofirst 300 down 12.45 (-1.53%) at 801.24 Currencies
04:10 BST
€/$ 1.3151 ( 1.3013)
$/¥ 96.89 (96.50)
£/$ 1.4664 (1.4596) Commodities
04:05 BST
Brent Crude (ICE) down $0.30 at $49.69
Light Crude (Nymex) down $0.43 at $49.49
100 Oz Gold (Comex) down $4.10 at $889.50
Copper (Comex) up $1.15 at $192.75 10-year government bond yields (%)
03:50 BST
US 3.02 (2.93)
UK 3.46 ( 3.49)
Germany 3.16 ( 3.16)
Japan 1.42 (1.45) Sources: FT, Bloomberg See this article online.
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