Spain to face tough budget cuts
Mar30

Spain to face tough budget cuts

Spain’s newly elected Prime Minister Mariano Rayoy on Friday is expected to push ahead with one of the nation’s most hard-hitting budgets in recent times. The news comes as almost a million protestors took to the streets late on Thursday after a general strike paralysed heavy industry and disrupted transport in Madrid and Barcelona. But Rayoy said he is adamant and will stand by his promise to the other eurozone members to decrease the deficit in spite of the country’s soaring unemployment and current recession. Rayoy’s Popular party will attempt to bring down the public deficit from last year’s 8.51 percent to 5.3 percent of GDP. This would mean an estimated €20bn to €30bn in austerity measures in addition to the already announced €8.9bn spending cuts and tax increases of €6.3bn. Those in opposition believe Spain will struggle to deal with such austere budget cuts. The action is likely to lead to a rigid recession, which would make the adjustment even harder to meet.

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Japan retail sales beat expectations – up 3.5 percent
Mar29

Japan retail sales beat expectations – up 3.5 percent

Retail sales in Japan rose 3.5 percent year on year in February, said the Ministry of Economy, Trade and Industry on Thursday. Japan’s retail figures saw the largest advance since August 2010 and beat analysts’ expectations of 1.3 percent, published figures showed. Sales were helped by a strong demand in the motor industry, according to the Ministry. Car sales increased 21.4 percent, with Toyota Motors saying its global output grew 28 percent to 811,310 vehicles from a year earlier. Meanwhile, retail sales for fuel gained 4.8 percent year on year in February. Sales of beverages and food rose 2.5 percent, up 1.9 percent from the previous month. The Nikkei 225 climbed to pre-earthquake levels this week indicating consumer confidence is returning. However, the country’s economy contracted 0.7 percent annually in the final quarter of 2011.

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UK in talks to sell a third of RBS to Abu Dhabi
Mar28

UK in talks to sell a third of RBS to Abu Dhabi

High profile Abu Dhabi investors have been in talks concerning a £10bn investment into Royal Bank of Scotland it was alleged on Wednesday. Shares in the UK bank rose sharply by 4.6 percent in early trade following the news that Abu Dhabi’s ruling family including Sheikh Mansour and other Abu Dhabi and Middle Eastern investors could invest up to £5bn in RBS stock. As much as a third of RBS could be sold to Abu Dhabi wealth funds but shares are still short of the average 49.9 pence the UK government paid for its stake. Critics say a sale at the current share price would therefore leave UK taxpayers with billions of pounds in losses. Discussions have been ongoing for several month and the deal could happen by the end of this year sources familiar with the matter indicated.

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Coutts pays £8.75m over money laundering compliance
Mar27

Coutts pays £8.75m over money laundering compliance

Coutts, the 320-year old private bank famous for handling the finances of the Queen, has been fined £8.75m late on Monday by the FSA for money laundering violations in its dealings with high risk customers. The RBS-owned bank, which specialises in private banking and wealth management, was found to suffer “serious and systematic” failings, which were “allowed to persist for almost three years,” according to the FSA. Investigators found issues in almost three quarters of the client files it scrutinised. The problems discovered included lack of information gathering to establish the source of the money and failing to closer inspect customer transaction in customer accounts. Coutts would have paid the higher fine of £12.5m if it had not chosen to settle out of court early.

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CaixaBank edging closer to €1.1bn Civica merger
Mar26

CaixaBank edging closer to €1.1bn Civica merger

Spanish lender CaixaBank, the Barcelona-listed arm of La Caixa, and smaller competitor Banca Civica SA have both suspended trading on Monday, said stock market regulator CNMV. The move is in anticipation of a deal announcement that could see CaixaBank take over Banca Civica in an all-share deal that will value the bank at €1.1bn or €2.2 a share, reports showed. According to local media, CaixaBank is planning to slash the combined workforce by about 3,000 to 3,500 employees, or 10 percent, and shut down around 15 percent of its branches. Banca Civica shares on Friday closed at €2.22 while CaixaBank, which is worth an estimated €12bn, closed at €3.15. The boards of both entities are due to meet Monday afternoon to approve the tie-up.

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