Archive for February, 2010

FDIC: US Banking Industry Still Suffering

Posted by Amita Kalra on February 23rd, 2010

The Federal Deposit Insurance Corporation today released the fourth quarter report which revealed that the number of distressed banks in the US rose from 552 at the end of September to a whopping 702 in the last quarter. Based on the result, roughly one in 11 of the approximate 8,000 U.S. banks are on the troubled list, the highest in sixteen years.

Banks insured by the FDIC dropped to a total quarterly profit of $914 million in the fourth quarter, which ended Dec. 31, compared with $2.8 billion in the third quarter. The result was significantly better than the $37.8 billion loss for insured institutions during the fourth quarter of 2008, but well below historical norms.

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China Tightens Bank Lending Rules

Posted by Amita Kalra on February 21st, 2010

As a follow up to the recent increase in the reserve requirement ratio in China, the CBRC (China Banking Regulatory Commission today announced two more regulations aimed at monitoring working capital loans and personal loans.

The regulation on working capital loans stipulates, working capital loans cannot be used in investments including fixed assets and shareholding. The issuance of excessive loans and appropriation of loans should be also be avoided. Face to face interviews will be made necessary when approving personal loans, according to the regulation on personal loans. The two regulations both state lenders and borrowers should declare the purpose of loans before they are made. The regulator will punish lenders that freely distribute working capital loans and companies that use those loans for purposes such as capital expenditure, stake investment and some other areas that the government doesn’t allow, CBRC said.

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Posted in Asia Pacific, North America Tags: , , , , , 2 Comments »

General Motors To Invest $494 Million in Fuel Efficient Ecotec Engine

Posted by Amita Kalra on February 18th, 2010

Detroit based automaker, General Motors is planning on a massive revamp, to improve the fuel economy of its vehicles and at the same time, create jobs in its corporate units. It will invest about $494 million and create nearly 565 jobs, at three U.S. plants making its revamped four cylinder Ecotec engine.

GM is spending a major portion, $425 million of the total, and recalling 470 employees at its engine factory in Tonawanda, New York, Kimberly Carpenter, a GM spokeswoman, said today.

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Duane Reade Acquired By Walgreen

Posted by Amita Kalra on February 17th, 2010

The Walgreen Company, the largest drug store in the United States, today announced that it will acquire privately-held drugstore chain Duane Reade Holdings for $1.075 billion in cash including assumption of debt to the tune of $457 million from private-equity firm Oak Hill Capital Partners.

Calling the purchase of the 50-year-old Duane Reade “a compelling strategic acquisition,” Walgreen said it would fund the purchase and hopes to close the deal by the end of the current fiscal year on August 31. This acquisition will add to its portfolio of 7100 locations across the country. Walgreen, currently runs 70 of its own stores in the New York metropolitan area, compared to Duane Reade’s 257.

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U.S. Stocks Surge

Posted by Amita Kalra on February 16th, 2010

In the wake of some positive world developments, US stocks rose to almost a two week high. Between rally highs hit on January 19 and the lows of early February, the S&P 500 had fallen more than 9% and the Dow and Nasdaq lost more than 7%. After many such down sessions, worries about China curbing lending and Greece in a severe debt crisis, the market finally heaved a sigh of relief, as positive results for Barclays, U.K’s second largest bank, amongst many others, upped spirits.

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Tata Motors Hires Carl Peter Forster as CEO

Posted by Amita Kalra on February 15th, 2010

Tata Motors, the world’s fourth largest truck manufacturer, has hired Carl Peter Forster, former Europe head of General Motors Co, as the Chief Executive Officer. He will be in charge of Indian operations, both local and exports, along with the U.K. based premium brands Jaguar and Land Rover which were acquired in 2008. Forster, 55, will work out of Mumbai, and have “overall responsibility” of the company’s global operations. Tata Motors’ global operations also comprise Hispano Carrocera –the Spanish bus maker it completed acquiring in October 2009–and its South Korean commercial vehicle venture, Tata Daewoo Commercial Vehicle Co.

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Bharti Airtel Bids For Zain

Posted by Amita Kalra on February 14th, 2010

In a deal valued roughly at $10.7 billion, India’s largest mobile phone company (by subscribers), Bharti Airtel, today offered to buy the African operations of Zain, a Kuwaiti telecommunications company.

Zain currently has more than 40 million subscribers in Africa, about 62 percent of its client base. More than half of its $7.2 billion annual sales in 2008 came from Africa. Its shares have gone up nearly 23 percent last week, giving it a value of 4.64 billion Kuwaiti dinars (16 billion dollars).

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Posted in Africa, Asia Pacific, North America Tags: , , , , , , , 10 Comments »

Google Buzz And Privacy Violation

Posted by Amita Kalra on February 13th, 2010

Last Wednesday, Google added the much-buzzed-about Google Buzz, to its Gmail web-based email service. This social networking feature comes pre-populated with friends, added on the basis of which Gmail contacts users emailed most often.

In a nutshell, it offers its 176 million users the space to share updates, videos, photos and other content – providing them the functionality of Facebook and Twitter, with the organicity of Gmail. However, in the past few days, Google also faced the flak, for having made Gmail contacts public through Google profiles.

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China Increases Reserve Requirement for Banks

Posted by Amita Kalra on February 12th, 2010

In an effort to curb lending and put a limit to inflation, China, for the second time in the last 5 weeks, has increased the banks’ reserve requirement ratio, which the ratio of the money to be kept with the central bank, which cannot be lent out to consumers and earns very little interest. This effectively means that commercial banks have lesser money to lend out to customers.

The People’s Bank Of China, the Central Bank, has pushed up the ratio by half a percentage point, to 16.5% for large banks (with effect from February25). However, it remains unchanged at 14% for smaller financial institutions.

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Posted in Asia Pacific Tags: , , , , , 1 Comment »

Worries Over Greek Crisis, EU to Discuss Solution

Posted by Amita Kalra on February 11th, 2010

With soaring debts, a dipping economy, and an incredibly bloated public sector- Greece is clearly in big trouble. Will it succumb? Besides, it’s not just Greece, the problem is also that the stench is permeating. And Fast.

European leaders, who now face the noose, in the form of their credibility as a union and the Euro as a common currency, today agreed on a political statement to deal with the imminent crisis. Though the details will be worked out by the finance ministers on Monday, the countries of The Euro Zone are planning the financing of loans to Greece.

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Posted in Europe, North America Tags: , , , , , , , , , , , 2 Comments »
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