ReportWire

Tag: Breaking News: Europe

  • UK and EU agree to crucial Northern Ireland trade deal in Brexit breakthrough

    UK and EU agree to crucial Northern Ireland trade deal in Brexit breakthrough

    [ad_1]

    Speaking at a news conference, Sunak described the new agreement — known as the Windsor Framework — as “the beginning of a new chapter” for the relationship between the U.K. and the EU.

    Dan Kitwood | Getty Images News | Getty Images

    LONDON — British Prime Minister Rishi Sunak on Monday signed a new trade deal with the European Union designed to remedy problems caused by the Northern Ireland Protocol.

    Speaking shortly after the announcement, Sunak described the new agreement — known as the Windsor Framework — as “the beginning of a new chapter” for the relationship between the U.K. and the EU.

    “I’m pleased to report that we have now made a decisive breakthrough,” Sunak said at a news conference in Windsor, just outside London.

    “These negotiations have not always been easy,” he continued. “The U.K. and the EU may have had our differences in the past, but we are allies, trading partners and friends. This is the beginning of a new chapter in our relationship.”

    European Commission President Ursula von der Leyen added that the framework “respects and protects our respective markets and our respective legitimate interests. And, most importantly, it protects the very hard-earned peace gains of the Belfast Good Friday Agreement.”

    Exact details of the new arrangement were not immediately available, but the two leaders said the deal had three main components. Those include safeguarding trade flows within the U.K., protecting Northern Ireland’s place within the U.K., and giving the region’s assembly in Stormont say over new EU rules with the introduction of a “Stormont brake.”

    Sterling hit a session high of $1.2051, up 0.9%, shortly after the announcement. The euro also rose 0.7% hit a session high of $1.0613. The FTSE 100 stock market index was up 60 points or 0.7% at 7934.

    Sunak is due make a statement in Parliament at 1830 GMT. He said lawmakers would get to vote on the new agreement “at the appropriate time,” adding that vote will be “respected.”

    A deal years in the making

    The U.K. may have left the European Union on Jan. 31, 2020, but the Northern Ireland Protocol has sparked persistent disagreement ever since. This part of the Brexit deal mandates checks on some goods that travel to Northern Ireland from the rest of the U.K. — with the new negotiations aimed at easing these rules.

    Unionist parties in Northern Ireland — which is part of the U.K, unlike its neighbor Ireland, which is part of the EU — have argued that the checks place an effective border in the Irish Sea. The Protocol has also been criticized for jeopardizing the Good Friday Agreement — a long-standing peace deal that brought an end to three decades of sectarian violence in Northern Ireland.

    Sunak’s government has sought amendments to the deal signed by former Prime Minister Boris Johnson, who has led calls from the hardline Eurosceptic wing within the ruling Conservative Party to rip up the deal he himself negotiated.

    Breaking from predecessors Johnson and Liz Truss, Sunak has taken a less combative approach to engagement with the EU in the hope of reaching a resolution on key issues surrounding Northern Ireland by easing checks on goods traveling across the Irish Sea.

    However, he will need to convince his own party to vote for any prospective deal through parliament.

    Meanwhile, the devolved Northern Ireland Assembly has been suspended since Feb. 2022 after the Democratic Unionist Party resigned in protest at the Northern Ireland Protocol. The loyalist party renewed warnings over the weekend that it would not be strong-armed into accepting a deal that did not meet its “red lines.”

    [ad_2]

    Source link

  • ‘They started the war’: Russia’s Putin blames West and Ukraine for provoking conflict

    ‘They started the war’: Russia’s Putin blames West and Ukraine for provoking conflict

    [ad_1]

    A family watches a TV broadcast of Russian President Vladimir Putin’s annual state of the nation address in Moscow on February 21, 2023.

    Yuri Kadobnov | Afp | Getty Images

    Russian President Vladimir Putin on Tuesday used a widely-watched speech to deny responsibility for the war in Ukraine and lash out at his adversaries.

    In a more than hour-long speech, Putin claimed Russia had been attempting to allow citizens in the contested Donbas region to speak their “own language” and had been seeking a peaceful solution. He also cited the expansion of NATO and new European anti-rocket defense systems as provoking Russia, and said the objective of the west was “infinite power.”

    Western nations and Ukraine have repeatedly rejected Putin’s narrative. The U.S. administration on Saturday formally concluded that Moscow had committed “crimes against humanity” during its year-long invasion of its neighbor. Political analysts say Putin’s decision to invade Ukraine was the biggest mistake of his political career and has weakened Russia for years to come.

    Russia annexed Crimea in 2014 after a falsified referendum. The invasion was widely condemned by the international community and resulted in rounds of Western sanctions against Russian officials. Last year it also annexed four Ukrainian regions (Donetsk and Luhansk which cover much of the Donbas region, and Kherson and Zaporizhzhia) which Ukraine and its allies also condemned as illegal and illegitimate.

    Putin on Tuesday discussed the Donbas, claiming the Kremlin saw threats increasing in the contested region ahead of the Feb .24 invasion.

    “We had no doubt that by February 2022, everything was prepared for a punitive action in Donbas, where [the] Kyiv regime provided artillery and aviation and other weapons to attack Donbas in 2014. In 2015, they attempted again to directly attack Donbas, they continued shelling, terror,” he said, according to a Sky News translation.

    “All of this was completely against the documents that were accepted by the United Nations Security Council. I would like to repeat: they started the war. And we used the force in order to stop it.”

    Putin’s “state of the nation” address Tuesday was delivered in Moscow to lawmakers and military officials and was broadcast on state TV.

    Feb. 24 will mark one year since Russia mounted a large-scale invasion of Ukraine, beginning a ground war in Europe that Putin still refers to as a “special military operation.” Intense fighting continues across the war-torn nation with the death toll reportedly in the tens of thousands.

    Putin said Russia would create a highway to Crimea and enact a program of “social restoration” to territories it claims control over.

    Ukrainian officials are defiant, with President Volodymyr Zelenskyy repeatedly insisting the country will not surrender to anything but a restoration of the country’s pre-invasion borders.

    U.S. President Joe Biden made a surprise visit to the Ukrainian capital Kyiv on Monday, where he met with Ukrainian President Volodymyr Zelenskyy.

    Biden said the trip was to “reaffirm our unwavering and unflagging commitment to Ukraine’s democracy, sovereignty, and territorial integrity.” He also promised to deliver more artillery ammunition and anti-armor systems, and to announce new sanctions on Russian companies and its elites.

    Biden is due to deliver another speech, pointedly following Putin’s, in Poland. He is also meeting with Polish President Andrzej Duda.

    Biden's Kyiv visit shows administration is doubling down on its support for Ukraine, analyst says

    [ad_2]

    Source link

  • President Joe Biden makes surprise visit to Kyiv just days before one-year anniversary of Ukraine war

    President Joe Biden makes surprise visit to Kyiv just days before one-year anniversary of Ukraine war

    [ad_1]

    U.S. President Joe Biden on Feb. 16, 2023.

    Kevin Lamarque | Reuters

    U.S. President Joe Biden made a surprise visit to Kyiv, Ukraine Monday in a show of solidarity, nearly a year after Russia began its full-scale invasion of the country.

    Biden said in a White House statement that he was meeting with Ukraine President Volodymyr Zelenskyy to “reaffirm our unwavering and unflagging commitment to Ukraine’s democracy, sovereignty, and territorial integrity.”

    “I will announce another delivery of critical equipment, including artillery ammunition, anti-armor systems, and air surveillance radars to help protect the Ukrainian people from aerial bombardments,” he added. “And I will share that later this week, we will announce additional sanctions against elites and companies that are trying to evade or backfill Russia’s war machine.”

    Zelenskyy described Biden’s visit — the first by a U.S. president in almost 15 years — as “the most important visit in the history of Ukrainian-American relations.”

    “At this time, when our country is fighting for its freedom and freedom for all Europeans, for all people of the free world, it emphasizes how much we have already achieved and what historical results we can achieve together with the whole world, with Ukraine, with the United States, with the whole of Europe,” he said on Telegram, according to a NBC translation.

    The U.S. head of state left the Ukrainian capital after a more than five-hour visit, according to the Associated Press. Biden said that he will continue on to Poland where he will meet his counterpart Andrzej Duda. The Polish president could press Biden on post-war “security guarantees” for Ukraine, which he on Sunday told the Financial Times would be “important” for Kyiv.

    Biden’s visit to Ukraine comes after a concerted show of international support from global leaders and politicians during the Munich Security Conference over recent days. Allied forces have pledged financial support and weapons for Ukraine, but have fallen short of Zelenskyy’s pleas for the supply of jet fighters.

    On Feb. 18, Biden’s second-in-command, Vice President Kamala Harris, announced that Washington had determined that Russia had committed crimes against humanity in Ukraine, upgrading the U.S. administration’s March pronouncement that Moscow had committed war crimes.

    The latest round of U.S. sanctions will follow the EU’s tenth round of penalties against Russia for its war in Ukraine. European Commission President Ursula von der Leyen said last week that the sanctions will target exports worth 11 billion euros ($11.78 billion), dual use and advanced tech goods, as well as Russian propagandists. The latest EU package is subject to the approval of EU member countries.

    NATO Secretary-General Jens Stoltenberg on Saturday expressed doubts to CNBC’s Hadley Gamble that financial repercussions will deter Putin, however.

    “What we have seen is that Russia is actually willing to pay a hard price for this war,” he said.

    “There are no signs that President Putin is preparing or planning for peace. He is preparing for more war, or new offensive, mobilizing more troops, setting the Russian economy on a war footing and also actually reaching out to other authoritarian regimes like North Korea and Iran to get more weapons.”

    [ad_2]

    Source link

  • Barclays posts 19% slide in annual net profit after costly U.S. trading blunder; shares down 8%

    Barclays posts 19% slide in annual net profit after costly U.S. trading blunder; shares down 8%

    [ad_1]

    Barclays Bank building

    Chris Ratcliffe | Bloomberg | Getty Images

    LONDON — Barclays on Wednesday reported a full-year net profit of £5.023 billion ($6.07 billion) for 2022, beating consensus expectations of £4.95 billion but suffering a 19% fall from the previous year’s restated £6.2 billion in part due to a costly trading blunder in the U.S.

    Fourth-quarter attributable profit was £1.04 billion, above analyst projections of £833.29 million but down 4% from the £1.08 billion posted in the fourth quarter of 2021.

    Here are the other financial highlights:

    • Common equity tier one capital (CET1) ratio was 13.9%, compared to 13.8% in the previous quarter and 15.1% for the final quarter of 2021.
    • Return on tangible equity (ROTE) was 8.9% for the fourth quarter, compared to 12.5% in the third quarter and 13.4% for the fourth quarter of 2021. ROTE for the full year was 10.4%.
    • Net interest margin (NIM) was 2.86% for the full year, compared to 2.52% at the end of 2021.
    • The bank booked £1.2 billion in credit impairment provisions, versus a £700 million charge in 2021.

    The British lender took a substantial hit from an over-issuance of securities in the U.S., which resulted in litigation and conduct charges totaling £1.6 billion over the course of 2022.

    The British bank announced early last year that it had sold $15.2 billion more in U.S. investment products — known as structured notes — than it was permitted to.

    Barclays recognized a net attributable loss of around £600 million relating to the matter over the course of 2022, including a monetary penalty of $200 million following an investigation by the U.S. Securities and Exchange Commission.

    On Wednesday, Barclays CEO C.S. Venkatakrishnan said the group performed “strongly” in 2022.

    “Each business delivered income growth, with Group income up 14%. We achieved our RoTE target of over 10%, maintained a strong Common Equity Tier 1 (CET1) capital ratio of 13.9%, and returned capital to shareholders,” he said.

    “We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”

    The international unit, which includes Barclays’ investment bank, saw return on equity fall to 10.2% for the full year from 14.4% in 2021, and to 6.4% in the fourth quarter from 9.9% in the same quarter of the previous year. Profits also tumbled in the corporate and investment banking division.

    Barclays declared a total dividend for 2022 of 7.25 pence per share, up from 6 pence in 2021, including a 5 pence per share full-year dividend. The bank also intends to initiate a share buyback of £500 million, bringing the total buybacks announced in relation to 2022 to £1 billion, and total capital return equivalent to around 13.4 pence per share.

    Barclays shares fell more than 8% shortly after markets opened in London.

    [ad_2]

    Source link

  • Credit Suisse posts massive annual loss, CEO describes results as ‘completely unacceptable’

    Credit Suisse posts massive annual loss, CEO describes results as ‘completely unacceptable’

    [ad_1]

    Credit Suisse on Thursday reported a fourth-quarter and annual net loss that missed expectations, as the Swiss bank continued with its huge strategic overhaul.

    The lender’s fourth-quarter net loss attributable to shareholders came in at 1.4 billion Swiss francs ($1.51 billion), worse than analyst projections of a loss 1.32 billion Swiss francs, according to Eikon.

    It took the embattled Swiss lender’s full-year loss to 7.3 billion Swiss francs, worse than the 6.53 billion Swiss franc loss expectation by analysts. Shares were down 14% on Thursday afternoon.

    Credit Suisse is telegraphing another “substantial” full-year loss in 2023 before returning to profitability in 2024.

    CEO Ulrich Koerner told CNBC on Thursday that the full results were “completely unacceptable,” but underscored the need for the ongoing multi-year transformation program.

    Under pressure from investors, the bank in October announced a plan to simplify and transform its business in an effort to return to stable profitability following chronic underperformance in its investment bank and a litany of risk and compliance failures.

    Koerner in a statement accompanying results that 2022 was a “crucial year for Credit Suisse” and that it had been “executing at pace” on its strategic plan to create a “simpler, more focused bank.”

    “We successfully raised CHF ~4 billion in equity capital, accelerated the delivery of our ambitious cost targets, and are making strong progress on the radical restructuring of our Investment Bank,” he said in the statement.

    “We have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation by reshaping our portfolio, reallocating capital, right-sizing our cost base, and building on our leading franchises.”

    In November, the bank projected a 1.5 billion Swiss franc loss for the fourth quarter amid large-scale restructuring costs, while Credit Suisse shareholders greenlit a $4.2 billion capital raise aimed at financing the overhaul.

    The capital raise included the sale of 9.9% of Credit Suisse shares to the Saudi National Bank, making it the bank’s largest shareholder. The Qatar Investment Authority became the second-largest shareholder in Credit Suisse after doubling its stake late last year.

    The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021.

    Arnd Wiegmann | Reuters

    Reports of liquidity concerns led Credit Suisse to experience significant outflows of assets under management in late 2022, but Koerner told CNBC at the World Economic Forum in January that the bank had seen a sharp reduction in outflows, and that money was now coming back to some areas of the business.

    Despite this, net outflows hit 110.5 billion Swiss francs in the fourth quarter, taking the annual asset outflows for 2022 to 123.2 billion Swiss francs, compared to 30.9 billion inflows for 2021.

    The bank’s wealth management division alone saw net asset outflows of 95.7 billion in 2022, concentrated heavily in the fourth quarter.

    Credit Suisse revealed that around two thirds of the broader net asset outflows in the quarter occurred in October, and “reduced substantially for the rest of the quarter.”

    Koerner told CNBC that 60% of the total outflows came in October. Since then, the bank has embarked on an outreach program, speaking to 10,000 global wealth management clients and 50,000 clients in Switzerland.

    “That has created tremendous momentum, and I expect that momentum traveling with us throughout 2023 but you can see it if you look into January,” Koerner told CNBC’s Geoff Cutmore.

    “The group is net positive on deposits, wealth management globally net positive on deposits, Asia Pac net positive on deposits, Asia Pac positive on net new assets and also Switzerland positive on net new assets, so I think if you look at that situation which we experienced since January, I would say the situation has changed completely,” Koerner said.

    He also expressed confidence that the outreach program and “tremendous” levels of client loyalty would help the bank retain and build on returning inflows.

    In its report, the bank said its results were “significantly affected by the challenging macro and geopolitical environment with market uncertainty and client risk aversion.”

    “This environment has had an adverse impact on client activity across all our divisions. While we would expect these market conditions to continue in the coming months, we have taken comprehensive measures to further increase our client engagement, regain deposits as well as AuM and improve cost efficiencies,” the bank said.

    Other highlights from Thursday’s earnings:

    • CET 1 (common equity tier one capital) ratio, a measure of bank solvency, reached 14.1% from 14.4% a year ago.
    • Fourth-quarter net revenues stood at 3.06 billion Swiss francs, from 4.58 billion Swiss francs a year earlier.
    • Total fourth-quarter operating expenses were 4.33 billion Swiss francs, versus 6.27 billion a year ago.
    Credit Suisse making really good progress, says CEO

    Credit Suisse’s restructuring plans include the sale of part of the bank’s securitized products group (SPG) to U.S. investment houses PIMCO and Apollo Global Management, as well as a downsizing of its struggling investment bank through a spin-off of the capital markets and advisory unit, which will be rebranded as CS First Boston.

    The planned carve-out of the investment bank to form U.S.-headquartered CS First Boston moved ahead in the fourth quarter. Credit Suisse on Thursday announced that it had acquired The Klein Group for $175 million.

    The bank also confirmed the appointment of Michael Klein as CEO of banking and the Americas, as well as CEO designate of CS First Boston.

    [ad_2]

    Source link

  • SocGen reports 64% slide in annual profits but beats market expectations

    SocGen reports 64% slide in annual profits but beats market expectations

    [ad_1]

    SocGen reported its latest results Wednesday.

    SAMEER AL-DOUMY | AFP | Getty Images

    Societe Generale on Wednesday reported a 64% drop in annual net profits for 2022, weighed on by lower activity in its domestic banking unit, currency effects and increased operating expenses.

    The French bank said net income came in at 1.16 billion euros ($1.24 billion) for the final quarter of 2022, bringing its annual profit to 2.02 billion euros. In comparison, the bank had posted 5.6 billion euros in net profit at the end of 2021.

    The latest results came in higher-than-expectations. Analysts had estimated a net income of 905 million euros for the quarter and 1.5 billion euros for the full year, according to Refinitiv.

    “The Group is confident of being able to reap the benefit of ongoing projects and business developments, confirms its financial guidance for 2025, and is embarking with determination on 2023, a year of transition in many respects,” CEO Fréderic Oudéa said in a statement.

    Here are other highlights from the results:

    • Revenues rose 8% over the year to 28.1 billion euros.
    • Operating expenses increased by 5.9% over the last 12 months to 18.6 billion euros.
    • CET1 ratio, a measure of bank solvency, stood at 13.5%, versus 13.1% at the end of the third quarter.

    Shares of the French lender are down more than 20% over the last 12 months.

    This is a breaking news story and it is being updated.

    [ad_2]

    Source link

  • BP posts record 2022 earnings to join Big Oil profit bonanza

    BP posts record 2022 earnings to join Big Oil profit bonanza

    [ad_1]

    The extraordinary scale of the oil and gas industry’s earnings has renewed criticism and sparked calls for higher taxes.

    Sopa Images | Lightrocket | Getty Images

    Oil major BP on Tuesday reported record annual profits, more than doubling last year’s total as fossil fuel prices soared following Russia’s full-scale invasion of Ukraine.

    The British energy giant posted underlying replacement cost profit, used as a proxy for net profit, of $27.7 billion for 2022. That compared with $12.8 billion for the previous year.

    Analysts polled by Refinitiv had expected net profit of $27.6 billion for full-year 2022. BP said its previous annual profit record was $26.3 billion in 2008.

    For the fourth quarter, BP posted net profit of $4.8 billion, narrowly beating analyst expectations of $4.7 billion.

    BP announced a further $2.75 billion share buyback, which it expects to complete prior to announcing its first-quarter 2023 results in early May. It also boosted its dividend by 10% to 6.61 cents per ordinary share.

    Shares of BP are up 0.8% year-to-date.

    Speaking to CNBC’s “Squawk Box Europe” Tuesday, BP CEO Bernard Looney described the earnings as a “good set of results.”

    “First of all, I hope you can see a company that is performing well, performing while transforming. We had our highest operations reliability in our history, we had the lowest production cost in 16 years so the business itself is running very well,” he said.

    “Secondly, we’re leaning into our strategy today. We’re announcing up to $8 billion more investment into the energy transition this decade and up to $8 billion more into oil and gas in support of energy security and energy affordability this decade,” he added. “And thirdly, it’s about making sure we return to our shareholders.”

    The results see BP join Big Oil’s profit bonanza.

    British rival Shell on Thursday posted its highest-ever annual profit of nearly $40 billion. Before that, U.S. oil giant Exxon Mobil reported a $56 billion profit for 2022, marking a historic high for the Western oil industry. Chevron‘s 2022 profits came in at a record $36.5 billion.

    The West’s largest fossil fuel companies are expected to have raked in combined profits of almost $200 billion for the year, according to Refinitiv data. France’s TotalEnergies is slated to report full-year earnings on Wednesday.

    The extraordinary scale of the earnings has renewed criticism of the oil and gas industry and sparked calls for higher taxes.

    “People across the country need look no further than their own front door – one of Britain’s own oil companies – which has been making records profit while so many Brits face hardship through no fault of their own,” said Jonathan Noronha-Gant, senior campaigner at advocacy group Global Witness.

    “Implementing a windfall tax to aid those struggling financially, paired with a significant increase in renewable energy and home insulation, could be the start of the end to the damaging fossil fuel era, both for people and the planet. BP is richer because you’re poorer,” Noronha-Gant said.

    ‘Energy trilemma’

    In recent quarters, Big Oil executives have sought to defend their rising profits and said the significant disruption to global energy markets due to the war in Ukraine has reaffirmed the importance of solving “the energy trilemma.”

    According to a statement to investors from BP CEO Bernard Looney late last year, this refers to “secure, affordable and lower carbon energy.”

    BP, which in 2020 set out its ambition to become a net zero company “by 2050 or sooner,” recently predicted that oil and gas would become a dramatically smaller part of the global energy mix by the middle of the century.

    In its latest annual energy outlook, published on Jan. 30, the company said it sees the share of fossil fuels as a primary energy source falling from 80% in 2019 to between 55% and 20% by 2050. The share of renewables in primary energy, meanwhile, was projected to grow from 10% to between 35% and 65% over the same time period.

    The wide range of outcomes reflects several possible paths for the energy transition. But in each of BP’s three scenarios, the pace with which renewables enter the global energy system is “quicker than any previous fuel in history,” the report said.

    — CNBC’s Catherine Clifford contributed to this report.

    [ad_2]

    Source link

  • Deutsche Bank smashes profit expectations in fourth quarter as higher interest rates bolster revenue

    Deutsche Bank smashes profit expectations in fourth quarter as higher interest rates bolster revenue

    [ad_1]

    A statue is pictured next to the logo of Germany’s Deutsche Bank in Frankfurt, Germany, September 30, 2016.

    Kai Pfaffenbach | Reuter

    Deutsche Bank on Thursday reported its 10th straight quarter of profit, receiving a boost from higher interest rates and favorable market conditions.

    Deutsche Bank reported a 1.8 billion euro ($1.98 billion) net profit attributable to shareholders for the fourth quarter, bringing its annual net income for 2022 to 5 billion euros, a 159% increase from the previous year.

    related investing news

    CNBC Pro

    The German lender almost doubled a consensus estimate among analysts polled by Reuters of 910.93 million euro net profit for the fourth quarter, and exceeded a projection of 4.29 billion euros on the year.

    In 2019, Deutsche Bank launched a sweeping restructuring plan to reduce costs and improve profitability, which involved exiting its global equities sales and trading operations, scaling back its investment banking and slashing around 18,000 jobs by the end of 2022.

    The annual result marks a significant improvement from the 1.9 billion euros reported in 2021, and CEO Christian Sewing said the the bank had been “successfully transformed” over the last three and a half years.

    “By refocusing our business around core strengths we have become significantly more profitable, better balanced and more cost-efficient. In 2022, we demonstrated this by delivering our best results for fifteen years,” Sewing said in a statement Thursday.

    “Thanks to disciplined execution of our strategy, we have been able to support our clients through highly challenging conditions, proving our resilience with strong risk discipline and sound capital management.”

    Deutsche Bank CFO discusses the lender's highest profit since 2007

    Post-tax return on average tangible shareholders’ equity (RoTE), a key metric identified in Sewing’s transformation efforts, was 9.4% for the full year, up from 3.8% in 2021.

    Deutsche also recommended a shareholder dividend of 30 cents per share, up from 20 cents per share in 2021, but did not announce a share buyback at this stage.

    “On the share repurchases, given the uncertainty of the environment today that we see, also some regulatory changes that we’d like to see both the timing and the extent of, we’re holding back for now. We think that’s the prudent action to take, but we intend to revisit that,” CFO James von Moltke told CNBC on Thursday.

    He added that the bank would likely reassess the outlook in the second half of this year, and reaffirmed Deutsche’s target for 8 billion euros in capital distributions to shareholders through to the year 2025.

    Here are the other quarterly highlights:

    • Loan loss provisions stood at 351 million euros, compared to 254 million euros in the fourth quarter of 2021.
    • Common equity tier 1 (CET1) ratio — a measure of bank solvency — came in at 13.4%, compared to 13.2% at the end of the previous year.
    • Total net revenue was 6.3 billion euros, up 7% from 5.9 billion euros for the same period in 2021 but slightly below consensus estimates, bringing the annual total to 27.2 billion euros in 2022.

    Deutsche’s corporate banking unit posted a 39% growth in net interest income, aided by “higher interest rates, strong operating performance, business growth and favorable FX movements.”

    Some of the tailwinds were offset by a slump in dealmaking that has affected the wider industry in recent months.

    “The fourth quarter tailed off a little bit for us in November and December, but still was a record quarter in our FIC (fixed income and currencies) business for a fourth quarter, 8.9 billion [euros] for the full-year,” the CFO von Moltke told CNBC’s Annettee Weisbach.

    “We’re thrilled with that performance but…it came a little bit short of analyst expectations and our guidance late in the year.”

    He said that January had been a month of strong performance for the bank’s trading divisions, as market volatility persisted.

    “That gives us some encouragement that our general view, which was that volatility and conditions in the macro businesses would taper off over time, but would be replaced if you like from a revenue perspective with increasing activity in micro areas like credit, M&A, equity and also debt issuance,” he said.

    “We see that still intact as a thesis of what ’23 will look like.”

    [ad_2]

    Source link

  • Euro zone inflation dips for a third straight month as energy prices continue to fall

    Euro zone inflation dips for a third straight month as energy prices continue to fall

    [ad_1]

    Inflation in the euro zone eased in the last two months of 2022 but the economic indicator is still well-above the 2% mandate of the European Central Bank.

    Jeff Greenberg | Universal Images Group | Getty Images

    Inflation in the euro zone dropped for a third consecutive month in January on the back of a significant fall in energy costs.

    Headline inflation in the euro zone came in at 8.5% in January, according to preliminary data released Wednesday. In December, the rate was recorded at 9.2%.

    Energy remained the biggest cost driver in January, but once more softened from previous levels. Energy charges fell to an estimated 17.2% in January, down from 25.5% in December. However, food costs rose slightly from 13.8% in December to 14.1% in January.

    The 20-member region has gone through substantial price increases in 2022, after Russia’s invasion of Ukraine pushed up energy and food costs across the bloc. However, the latest data provides further evidence that inflation has started to ease.

    Core inflation, which strips out energy and food costs, stood at 5.2% in December — in line with the previous month.

    “The key point is that core inflation was unchanged at a record 5.2% so the ECB will remain very hawkish,” Jack Allen-Reynolds, senior Europe economist at Capital Economics, said via email.

    The performance of Europe’s main index over the last 12 months.

    “The apparent decline in euro-zone headline inflation in January, from 9.2% in December to 8.5%, came as a big surprise. But we wouldn’t be shocked if it was revised up significantly when the final euro-zone data are released on 23rd February,” he added, citing delays in receiving official data from Germany.

    What it means

    The economic indicator is being closely watched ahead of a new interest rate decision due out on Thursday from the European Central Bank. Higher inflation has led the ECB to raise rates four times in 2022, and market expectations point to at least two other increases in the coming meetings.

    “The upshot is that the larger-than-expected drop in headline inflation won’t deter the ECB from raising interest rates by 50 basis points tomorrow,” Allen-Reynolds said.

    In a note to clients last week, Morgan Stanley had said that “a 50 basis point hike in February seems like a done deal, with the Council discussion to centre on the size of rate hikes in March and beyond.”

    Market participants will be looking for clues on the central bank’s next steps. The main ECB rate is currently at 2%, but market expectations suggest an increase to 3.5% by the end of the first six months of the year, according to Reuters.

    “Investors will be looking ahead to whether Christine Lagarde doubles down on previous signals for another half-percent hike in March and what words she uses to describe any future additional tightening,” Tom Hopkins, portfolio manager at BRI Wealth Management, said Wednesday via email.

    Unemployment in the euro zone seemed steady at 6.6% in December . This is in line with the previous two monthly readings and also reduces fears of a significant recession in the euro zone.

    Data released Tuesday showed a better-than-expected growth activity in the euro zone at the end of 2022 — despite economic contractions in Germany and Italy, the euro zone grew 0.1% in the fourth quarter of last year.

    ECB's Lagarde: China reopening will cause increased inflationary pressure

    [ad_2]

    Source link

  • UBS gets a boost from higher rates, but lower client activity brings down revenues

    UBS gets a boost from higher rates, but lower client activity brings down revenues

    [ad_1]

    UBS reported fourth quarter and full-year earnings.

    Fabrice Coffrini | Afp | Getty Images

    UBS beat market expectations with its latest results on the back of lower expenses and higher interest rates. But the lender’s revenues declined because of weaker client activity.

    The bank reported $1.7 billion of net income for the fourth quarter of last year, bringing its total annual profit to $7.6 billion in 2022. Analysts had expected UBS would achieve a net income of $1.3 billion in the fourth quarter and of $7.3 billion for the year, according to Refinitiv data.

    Looking ahead, the Swiss lender said that revenues for the first quarter of 2023 are set “to be positively influenced” by higher client activity and interest rates, as well as by the easing of Covid-19 restrictions in Asia.

    “We delivered good full-year and solid fourth-quarter results in a difficult macroeconomic and geopolitical environment,” CEO Ralph Hamers said in a statement.

    Here are a couple of highlights from the latest release:

    • CET 1 capital ratio, a measure of bank solvency, stood at 14.2%, down from 14.4% in the previous quarter;
    • Revenues dropped to $8.029 billion from $8.705 billion a year ago;
    • Return on tangible equity, a measure of bank’s performance, rose to 13.2% at the end of the quarter, up from 10% a year ago.

    Among the bank’s units, Global Wealth Management posted a fourth-quarter net interest income increase of 35% on the year, given higher deposit margins off the back of higher interest rates. Personal and Corporate Banking also recorded a 21% year-on-year hike in net interest income over the same period, as a result of higher interest rates and loan revenues.

    But market uncertainty hit the investment banking and asset management arms of the business. The former saw a 24% yearly drop in revenues, whereas asset management revenues fell by 31% year-on-year due to the “negative market performance and foreign currency effects.”

    “The rate environment is helping the business on one side, and that offsets some of the lower activity that we see on the investment side,” Hamers told CNBC’s Geoff Cutmore on Tuesday.

    He added that, following the first half of last year, there was a shift in the markets that put pressure on the investment side of the bank.

    “We saw a move from what we would call micro focus, which is equity focused, to macro focus, which is rates focused,” he said, noting that the Swiss bank was not able to benefit from that transition as much as some of its peers, given its smaller presence in the U.S.

    ‘Uncertain’ Outlook

    UBS said it will be purchasing more shares this year.

    “We remain committed to a progressive dividend and expect to repurchase more than $5 billion of shares in 2023,” Hamers said in a statement.

    However, the Swiss bank is cautious about the economic outlook, citing central bank activity as a potential catalyst for market volatility.

    “While inflation may have peaked in the second half of 2022, and an energy crisis in Europe seems likely to be averted, the outlook for economic growth, asset valuations and market volatility remains highly uncertain, and central bank tightening may have an impact on market liquidity,” the bank said in its latest results.

    UBS shares are up by about 15% over the last 12 months.

    [ad_2]

    Source link

  • Germany resists intense pressure over tanks for Ukraine, saying ‘the situation has not changed’

    Germany resists intense pressure over tanks for Ukraine, saying ‘the situation has not changed’

    [ad_1]

    A new Leopard 2 A7V heavy battle tank, the most advanced version of the German-made tank.

    Sean Gallup | Getty Images News | Getty Images

    Germany has again refused to commit to allowing German-made tanks to be sent to Ukraine despite intense pressure.

    German Defense Minister Boris Pistorius said Tuesday there has been no change in Berlin’s position on whether to allow German-made Leopard 2 tanks to be sent to Ukraine, or on permitting other countries with German-made tanks to send their units to Kyiv. He added that the government still needed to assess the situation.

    “I can tell you there is no new information here, the situation has not changed, and we are preparing our decision, which will come very soon,” he said at a joint press conference with NATO Secretary-General Jens Stoltenberg.

    “We are looking into the matter, what the current status is regarding our Leopard tanks,” he said in translated comments. He noted that Berlin was looking not only at its inventory and industry stocks, but also at the compatibility of its tanks for combat in Ukraine, as well as issues around the logistics of supply and maintenance.

    Aware that Berlin’s reluctance over tanks has attracted widespread criticism, Pistorius insisted that Germany was one of Ukraine’s top military supporters aside from the U.S. and U.K., and that this was “often forgotten in the public discussion.”

    The latest comments from Berlin come after months of pressure on German government to offer Ukraine some of its Leopard 2 tanks, or to allow its allies to export their own German-made battle tanks to the war-torn country.

    A defense summit last Friday at the Ramstein air base failed to deliver an agreement on tanks for Kyiv and, until now, only the U.K. had pledged to send 14 of its own Challenger 2 tanks to Ukraine.

    A Challenger 2 main battle tank on display for The Royal Tank Regiment Regimental Parade, on Sept. 24, 2022, in Bulford, England.

    Finnbarr Webster | Getty Images News | Getty Images

    On Tuesday, NATO’s Stoltenberg sought to defend Germany from what is likely to be inevitable criticism following this latest refusal to budge on tanks, saying he was “confident that we will have a solution soon.”

    He noted that the war had reached a “pivotal moment,” however, and that allies “must provide heavier units to Ukraine. And we must do it faster.”

    Kyiv has for months pleaded with its allies for heavy battle tanks that it says could be decisive in the outcome of the war.

    Germany was believed to be reluctant to send its own tanks unless the U.S. delivered its own Abrams vehicles. Washington has been noncommittal, saying that just the training to maintain and operate its tanks would require months.

    German Defense Minister Pistorius insisted Tuesday that there was no disunity between Berlin and its allies, saying, “there are some partners that are still evaluating their decisions and others want to go a bit faster, but we are not un-united.”

    Allies’ frustration

    Despite Germany’s assurances, Kyiv’s allies have become frustrated with Berlin’s reluctance over tanks.

    On Saturday, the Baltic states of Estonia, Latvia and Lithuania issued a joint statement for Germany “to provide Leopard tanks to Ukraine now.” Poland and Finland have repeatedly expressed they are prepared to supply Leopard 2 units, with Reuters reporting that Polish premier Mateusz Morawiecki on Monday signaled Warsaw could proceed without Berlin’s approval.

    “We will ask for such permission, but this is an issue of secondary importance. Even if we did not get this approval … we would still transfer our tanks together with others to Ukraine”, Morawiecki said Monday, according to Reuters. “The condition for us at the moment is to build at least a small coalition of countries.”  Poland’s defense minister confirmed on Tuesday that Warsaw had asked Berlin for permission to re-export its own Leopard 2s to Ukraine.

    Germany’s position seemed to have been thawing over recent days. On Sunday, German Foreign Minister Annalena Baerbock told French news outlet LCI that Berlin would not block Poland from sending its own Leopard 2s to Ukraine. That same day, newly appointed German Defense Minister Boris Pistorius, who only assumed his post last Thursday, on Sunday said that he expected a decision imminently.

    France said it has not excluded sending its own Leclerc tanks to Ukraine. After meeting with his German counterpart Sunday, French President Emmanuel Macron told reporters that he had “asked the army minister to work on it, and nothing has been ruled out.”

    'The art of diplomacy': How the world responds to a pariah state

    He added that a decision would be made based on several criteria: ensuring any offer of tanks is not “escalatory” and accounts for the “reality in terms of capacity, maintenance in operational condition and training times.” The third criteria, Macron said, is not weakening France’s own defense capabilities.

    — CNBC’s Ruxandra Iordache contributed reporting to this story.

    [ad_2]

    Source link

  • Global economic outlook may be less bad — but we’re still not in a good place, IMF chief says

    Global economic outlook may be less bad — but we’re still not in a good place, IMF chief says

    [ad_1]

    International Monetary Fund (IMF) Managing Director Kristalina Georgieva attends a session at the World Economic Forum (WEF) annual meeting in Davos on January 17, 2023.

    Fabrice Coffrini | Afp | Getty Images

    The global economic outlook is not as bad as feared a couple of months ago — “but less bad doesn’t quite yet mean good,” according to the managing director of the International Monetary Fund.

    “We have to be cautious,” Kristalina Georgieva told a closing panel at the World Economic Forum in Davos moderated by CNBC.

    She said headline inflation was heading down and China’s reopening was expected to boost global growth, with the IMF forecasting its economy will outpace global growth of 2.7% this year, at 4.4%, after slipping below it for the first time in four decades last year.

    “Also what has changed in the positive is we have seen demonstrably the strength of labor markets translating into consumers spending and keeping the economy up,” she said.

    However, she also highlighted ongoing risks, including China’s growth resulting in higher oil and gas prices and the “horrible” war in Ukraine harming global confidence, particularly in Europe.

    And 2.7% global growth was still “not fabulous,” she added.

    But Georgieva said her biggest note of caution was that labor markets could lose some of their current tightness, with interest rates yet to significantly bite.

    “If they bite more severely, then we can see unemployment going up. And it is very different for a consumer to have a cost-of-living crisis and a job, than to have cost-of-living crisis and no job,” she said.

    “So we have to be thinking of possibly unemployment going up at a time when fiscal space in governments is very tight, there isn’t that much they can do to help people. And yet they would be pressed to do it.”

    Turning to European Central Bank head Christine Lagarde, a speaker on the same panel, she said: “All power to you. If fiscal policy works against purpose with monetary policy, then you may have to tighten even further.”

    ‘Stay in the middle of realism’

    Her message to business and policymakers was to “be careful not to get on the other side of the spectrum from being too pessimistic to being too optimistic. Stay in the middle of realism that seems to serve the world well.”

    She then called on Davos attendees to “keep the global economy integrated for the benefit of all of us.”

    “If we look at medium-term growth prospects, how we handle security of supply chains will matter tremendously on our future prospects of growth,” she said.

    “If we diversify rationally, the cost of this adjustment will be low. We put it down to 0.2% of GDP. If we are like an elephant in a china shop and we trash the trade that has been an engine for growth for so many decades, the cost can go up to 7% loss of GDP, $7 trillion.”

    “So a great deal of whether we can lift optimism depends on the people in this room. Be pragmatic, collaborate, do the right thing, keep the global economy integrated for the benefit of all of us.”

    [ad_2]

    Source link

  • Greta Thunberg says Davos elite are prioritizing greed and short-term profits over people and the planet

    Greta Thunberg says Davos elite are prioritizing greed and short-term profits over people and the planet

    [ad_1]

    Swedish climate activist Greta Thunberg on Thursday accused the political and business elite at the World Economic Forum in Davos, Switzerland, of prioritizing self-interest and short-term profits over people and the planet.

    “We are right now in Davos where basically the people who are mostly fueling the destruction of the planet, the people who are at the very core of the climate crisis, the people who are investing in fossil fuels etcetera, etcetera and yet somehow these are the people that we seem to rely on solving our problems,” Thunberg said.

    “They have proven time and time again that they are not prioritizing that. They are prioritizing self-greed, corporate greed and short-term economic profits above people and above planet.”

    “These people are going to go as far as they possibly can as long as they can get away with it. They will continue to invest in fossil fuels, they will continue to throw people under the bus for their own gain,” she added.

    Thunberg said it was an “absurd” situation that the world seems to be listening to Davos delegates rather than those on the frontlines of the climate emergency.

    The 20-year-old was released by police earlier this week after being detained alongside other climate activists for protesting the expansion of a coal mine in the tiny village of Luetzerath in Germany.

    “Yesterday I was part of a group that peacefully protested the expansion of a coal mine in Germany. We were kettled by police and then detained but were let go later that evening,” Thunberg said on Wednesday via Twitter. “Climate protection is not a crime,” she added.

    Thunberg said it was an “absurd” situation that the world seems to be listening to Davos delegates rather than those on the frontlines of the climate emergency.

    Fabrice Coffrini | Afp | Getty Images

    Alongside IEA Executive Director Fatih Birol, Thunberg took part in the CNBC-moderated panel with youth climate advocates Vanessa Nakate, Helena Gualinga and Luisa Neubauer.

    The four climate activists arrived in Davos having recently composed an open letter to the CEOs of fossil fuel companies through the non-profit website Avaaz. Thunberg, Nakate, Gualinga and Neubauer called on the executives of energy giants to “immediately stop” opening new oil, gas or coal extraction sites and said they intended to keep protesting in the streets in “huge numbers.”

    “We know that Big Oil knew for decades that fossil fuels cause catastrophic climate change, misled the public about climate science and risks [and] deceived politicians with disinformation sowing doubt and causing delay,” the letter says.

    What haven’t we said? What haven’t we done? What haven’t we communicated enough?

    Vanessa Nakate

    climate activist

    It adds that fossil fuel executives “must end these activities as they are in direct violation of our human right to a clean, healthy, and sustainable environment, your duties of care, as well as the rights of Indigenous people.”

    Failure to act immediately, the activists warn, comes at a time when citizens around the world “will consider taking any and all legal action to hold you accountable.” More than 900,000 people added their names to the letter as of Thursday afternoon.

    ‘Dirty deals’ in Davos

    Luisa Neubauer, climate activist and one of the main organizers of the Fridays for Future movement in Germany, on the same panel Thursday that she spent the last week with Thunberg and many others “defending livelihoods against coal diggers” in western Germany.

    “And many people then said ‘oh that is an interesting change in scenery coming from the mud in Luetzerath to Davos.’ We walked through the dirty mud in Luetzerath and now we are in Davos witnessing dirty deals being made so I’m not sure how much of a change that actually is,” Neubauer said.

    IEA chief Fatih Birol, Greta Thunberg and other youth activists discuss the climate crisis at Davos

    “We don’t see the sense of urgency reflected in action,” said Helena Gualinga, an Indigenous youth climate advocate from Ecuador.

    “Indigenous communities, Indigenous peoples, youth, scientists, we have all been pointing towards a direction [but] the oil industry is not going there, the world leaders are not going there,” she added.

    The fossil fuel industry has sought to underline the importance of energy security amid calls for a rapid transition to renewables, typically highlighting that demand for fossil fuels remains high.

    To be sure, the burning of fossil fuels such as coal, oil and gas, is the chief driver of the climate crisis.

    “What haven’t we said? What haven’t we done? What haven’t we communicated enough?” Ugandan climate activist Vanessa Nakate said on Thursday.

    Nakate said it was evident that in most cases, the countries and areas around the world least responsible for the climate emergency were typically the hardest hit.

    IEA says investment is ‘magic word’

    Asked why new fossil fuel production projects were going ahead despite opposition from both the IEA and climate campaigners, Executive Director Fatih Birol said, “The issue is we have to keep the temperature increase to 1.5 degrees Celsius. If it goes above that, the rather fragile equilibrium of our planet will be distorted — we will all be in trouble.”

    “We need to get energy from clean carbon-free form energy sources and to do that, the magic word is investment.”

    Birol said the world currently invests about $1.5 trillion in clean energy, but this needs to increase to $4 trillion in order to be in line with climate targets.

    “If we do that … then we don’t need any more coal, we don’t need any more oil and gas. [We don’t need any] new investments there, but the point of departure is making clean energy investments and having a clean, secure energy future for all,” Birol said.

    The IEA’s Birol said the world had “never, ever seen an energy crisis of this depth and complexity” following Russia’s full-scale invasion of Ukraine in February.

    Anadolu Agency | Anadolu Agency | Getty Images

    The climate emergency is one of the main themes for this year’s annual meeting in the Swiss Alpine town of Davos, which brings together roughly 1,500 business leaders.

    Addressing delegates during a special address on Wednesday, U.N. Secretary-General Antonio Guterres condemned fossil fuel giants for ignoring their own climate science. He accused the oil and gas industry of seeking to expand production despite knowing “full well” that their business model is incompatible with human survival.

    “Some in Big Oil peddled the big lie,” Guterres said. “And like the tobacco industry, those responsible must be held to account.”

    Thunberg has previously excoriated the climate inaction of the world’s political and business leaders at WEF, saying in Jan. 2019, “Our house is on fire.”

    [ad_2]

    Source link

  • Pope Emeritus Benedict XVI dies at 95

    Pope Emeritus Benedict XVI dies at 95

    [ad_1]

    Pope Benedict XVI pictured on February 28, 2013 in Rome, Italy.

    Franco Origlia | Getty Images News | Getty Images

    Pope Emeritus Benedict XVI, the Bavarian-born theologian whose conservative Roman Catholicism earned him the nickname “God’s Rottweiler” and who shocked his flock by suddenly resigning the papacy after just eight years, died Saturday, the Vatican said.

    He was 95.

    “With sorrow I inform you that the Pope Emeritus, Benedict XVI, passed away today at 9:34 in the Mater Ecclesiae Monastery in the Vatican,” the statement said. No cause of death was provided.

    Benedict was the longest-living pope, having surpassed Pope Leo XIII in September 2020.

    Benedict, the first pope to voluntarily give up the pontifical reins in nearly 600 years, spent his twilight years living at the Vatican in a refurbished monastery, rarely appearing in public with the man who replaced him, Pope Francis.

    But he continued to advise his far more liberal-minded successor in private. His influence was felt in August 2016, when Francis, who had made attempts to reach out to the LGBTQ community, took an unexpectedly hard line against schools’ teaching children that they could choose their gender.

    “We must think about what Pope Benedict said — ‘It’s the epoch of sin against God the Creator,’” Francis said at a gathering of Polish bishops.

    Born Joseph Aloisius Ratzinger on April 16, 1927, in Marktl, in Germany, Benedict, the son of police officer Josef and Maria, grew up in a Germany infected by NazismLike his father, Benedict opposed Hitler. But at age 14, he was forced to join the Hitler Youth. And two years later, while still in the seminary, the future pope was conscripted into the German army and sent to the front.

    With the Allies on the verge of victory, Benedict deserted and went home. After a brief stint in a POW camp, he returned to the seminary and, along with his brother Georg, was ordained a priest on June 29, 1951.

    Unlike most priests, Benedict logged little time in parishes. Instead, he embarked on an academic career and found himself moving to the conservative right as German campuses moved to the liberal left in the 1960s.

    Unlike the wildly popular John Paul II, Benedict was a stern and forbidding figure with little of his Polish predecessor’s charisma. He was seen more as a transitional pope — a keeper of John Paul’s flame.

    Like John Paul, Benedict was a witness to the Holocaust and made it his mission to reach out to Jews and to fight antisemitism. In 2008, Benedict became the first pope to visit a Jewish house of worship in the United States when he prayed at the Park East Synagogue in New York City.

    Benedict also made a historic pilgrimage to ground zero in New York City, where he prayed with the families of the victims of the terrorist attacks of Sept. 11, 2001.

    Benedict was considered a dominant intellectual figure in Roman Catholicism as he moved toward more conservative positions in the 40 years before he assumed the papacy. By 1981, he had become the prefect of the Congregation for the Doctrine of the Faith, the council — known during the 16th century as the Spanish Inquisition — that promotes and enforces church doctrine.

    His fierce resistance to what he saw as campaigns to secularize the church, promote women as priests, “normalize” homosexuality and encourage a liberal Latin American strain of Catholicism known as liberation theology led to his characterization as “God’s Rottweiler.”

    Among his more consequential actions as prefect was to issue a formal letter in May 2001 that was widely interpreted as declaring that investigations into allegations of clergy sex abuse were confidential church matters not subject to review by civil law enforcement agencies. Critics — and attorneys for victims of such abuse — often pointed to the letter as proof that the church was seeking to cover up the burgeoning scandal.

    The fallout dogged Benedict from the beginning of his papacy. In 2005, his first year as pope, he was accused in a lawsuit of having personally covered up a priest’s abuse of three boys in Texas. He avoided the lawsuit by requesting and receiving diplomatic immunity from the State Department.

    “He could go around and minister to victims, which he did, and I think that was a brave and profound thing to do, but he couldn’t change the definitive elements of the Catholic Church that enable abuse,” said Michael D’Antonio, author of “Mortal Sins: Sex, Crime, and the Era of Catholic Scandal.”

    Benedict asked for forgiveness in February for any “grievous faults” in his handling of clergy sex abuse cases, but denied any personal or specific wrongdoing after an independent report from a German law firm criticized his actions in four cases while he was archbishop of Munich.

    Benedict’s conservatism extended to the church’s public face. In addition to his native German, he was fluent in Italian, French, English and Latin — the last of which he sought to revive in church ceremony.

    Former Pope Benedict XVI presiding over a weekly audience in St. Peter’s Square at the Vatican.

    Alessandra Benedetti – Corbis | Corbis Historical | Getty Images

    In 2007, he issued an official document allowing performance of the Tridentine Mass, also known as the Traditional Latin Mass, in the European and North African countries whose histories had been shaped by Latin. The traditional Mass had been one of the prominent casualties of the Second Vatican Council of the early 1960s, when Pope John XXIII liberalized the church’s practices, liturgy and relations with other denominations.

    Benedict, who was often quoted rebuking more liberal theologians who argued that the reforms of the council were a rejection of the church’s previous practices, reinstituted many of the dormant symbols of the church’s power — he wore fur-lined vestments and jewel-laden rings, and he revived the papal tradition of wearing bright red leather shoes, symbolizing Jesus’ bloodied feet as he was sent to his crucifixion.

    Such symbols were on par with the massive visual statement the church made through its majestic churches and cathedrals and its unequaled collection of great works of art, Benedict contended.

    “All the great works of art, the cathedrals — the Gothic cathedrals and the splendid Baroque churches — are a luminous sign of God, and thus are truly a manifestation, an epiphany of God,” he said in 2008.

    Benedict was 78 and already frail in 2005 when he became pope — the oldest pope elected in almost three centuries — and by Feb. 11, 2013, then 85, he had had enough.

    “After having repeatedly examined my conscience before God, I have come to the certainty that my strengths due to an advanced age are no longer suited to an adequate exercise of the Petrine ministry,” he said at a Vatican meeting with his cardinals, referring to the Catholic doctrine of papal primacy. “Strength which in the last few months has deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me.”

    And with that, Benedict gave three weeks’ notice that he was stepping down at the end of the month.

    Benedict took the title pope emeritus and continued to wear the papal white. But he returned the Ring of the Fisherman, which traditionally is ceremonially destroyed with a blow from a hammer after a pope dies. And he asked that he be addressed as Father Benedict.

    The former pope also maintained a cordial relationship with Francis. Both men were beaming when they embraced Dec. 8, 2015, before opening the Holy Door at St. Peter’s Basilica to mark the start of the Catholic Holy Year, or Jubilee. In June 2016, Francis kissed Benedict on both cheeks to help celebrate the 65th anniversary of the former pope’s ordination.

    Their relationship was fictionalized in the 2019 movie “The Two Popes,” an adaptation of Anthony McCarten’s play “The Pope.” The movie depicts Benedict summoning Cardinal Jorge Mario Bergoglio, the liberal archbishop of Buenos Aires, Argentina, who would become Pope Francis, to the Vatican in secret to disclose that he intended to resign.

    Over a series of conversations, Benedict, played by Anthony Hopkins, confesses that he can no longer hear God’s words and his belief that perhaps Bergoglio should succeed him as the only man who might be able to shatter the Vatican bureaucracy and reform the institution.

    Change is needed, Benedict says, but “change is compromising,” and he is incapable of compromising. “For my entire life, I have been alone, but never lonely, until now,” he says.

    [ad_2]

    Source link

  • European stocks set to log worst year since 2018 as rate hikes, Ukraine war rattle markets

    European stocks set to log worst year since 2018 as rate hikes, Ukraine war rattle markets

    [ad_1]

    A stock trader looks at his monitors at the stock exchange in Frankfurt, Germany.

    Kai Pfaffenbach | Reuters

    LONDON — European markets are on course for their worst year since 2018 as Russia’s war in Ukraine, high inflation and tightening monetary policy hammered risk assets around the world.

    The pan-European Stoxx 600 index started the last trading day of 2022 down more than 12% since the turn of the year, its worst performance since a 13.24% annual decline in 2018. The European blue chip index enjoyed a bumper 2021, jumping 22.25% on the year.

    Morning trade on Friday saw the U.K.’s FTSE 100 slide 0.3%, the CAC 40 down 0.6% and the German DAX lower by 0.5%. The Stoxx 600 was down 0.4%.

    Economies around the world began the year still trying to emerge from the Covid-19 pandemic, with persistent lockdowns in China and other lingering supply bottlenecks forming what was now infamously mischaracterized by the U.S. Federal Reserve in 2021 as “transitory” inflationary pressure.

    Russia’s unprovoked invasion of Ukraine in February, and subsequent weaponization of its food and energy exports in the face of sweeping sanctions by Western powers, sent food and energy prices skyrocketing and compounded this pressure, helping to send inflation to multi-decade highs across many major economies.

    The cost-of-living crisis arising from soaring energy bills for businesses and consumers eventually began to weigh on activity, while the Fed and other major central banks were forced to tighten monetary policy with aggressive hikes to interest rates in order to rein in inflation.

    However, these efforts to suppress demand weighed heavily on already faltering economies. The U.K. is projected to already be in what will be its longest recession on record, while a downturn in the euro zone is also seen as highly likely.

    With the war in Ukraine showing no sign of abating and China in the process of reopening its economy as it ends three years of stringent Covid measures, investors are looking ahead with some trepidation to 2023.

    “What happened this year was driven by the Fed. Quantitative tightening, higher interest rates, they were pushed by inflation, and anything that was liquidity driven sold off — if you were equities and bond investors, came into the year getting less than a percent on a ten-year treasury which makes no sense,” Patrick Armstrong, chief investment officer at Plurimi Wealth LLP, told CNBC’s “Squawk Box Europe” on Friday.

    “Next year I think it’s not going to be the Fed determining the market, I think it’s going to be companies, fundamentals, companies that can grow earnings, defend their margins, probably move higher,” he said.

    Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

    —CNBC’s Natasha Turak contributed to this article.

    [ad_2]

    Source link

  • ECB hikes rates, sees significant increases ahead as it announces plan to shrink balance sheet

    ECB hikes rates, sees significant increases ahead as it announces plan to shrink balance sheet

    [ad_1]

    President of the European Central Bank Christine Lagarde attends a hearing of the Committee on Economic and Monetary Affairs in the European Parliament on November 28, 2022 in Brussels, Belgium.

    Thierry Monasse | Getty Images News | Getty Images

    The European Central Bank opted for a smaller rate hike at its Thursday meeting, taking its key rate from 1.5% to 2%.

    It also said that from the beginning of March 2023 it would begin to reduce its balance sheet by 15 billion euros ($16 billion) per month on average until the end of the second quarter of 2023.

    related investing news

    CNBC Pro

    It said it would announce more details about the reduction of its asset purchase program (APP) holdings in February, and that it would regularly reassess the pace of decline to ensure it was consistent with its monetary policy strategy.

    The widely-expected 50 basis point rate rise is the central bank’s fourth increase this year.

    It hiked by 75 basis points in October and September and by 50 basis points in July, bringing rates out of negative territory for the first time since 2014.

    “The Governing Council judges that interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive to ensure a timely return of inflation to the 2% medium-term target,” the ECB said in a statement.

    “We have more ground to cover … we are in a long game,” ECB President Christine Lagarde said in a press conference following the announcement.

    The euro rose from a 0.5% loss against the dollar to a 0.4% gain following the announcement, but European equities in the Stoxx 600 index plunged 2.4%.

    The central bank said it was working on inflation forecasts that had been “significantly revised up,” and sees inflation remaining above its 2% target until 2025.

    It now expects average inflation of 8.4% in 2022, 6.3% in 2023, 3.4% in 2024 and 2.3% in 2025.

    However, it sees a recession in the region being “relatively short-lived and shallow.”

    It comes after the latest inflation data for the euro zone showed a slight slow in price rises in November, although the rate remains at 10% annually.

    Lagarde told CNBC’s Annette Weisbach during the press conference: “One of the key messages, in addition to the hike, is the indication that not only will we raise interest rates further, which we had said before, but that today we judged that interest rates will still have to rise significantly, at a steady place.”

    “It is pretty much obvious that on the basis of the data that we have at the moment, significant rise at a steady pace means we should have to raise interest rates at a 50 basis point pace for a period of time,” she said.

    Regarding the announcement on quantitative tightening, she said the ECB wanted to follow the principles of being predictable and measured.

    The central bank’s decision to make on average 15 billion euro reductions in its APP over four months represents roughly half the redemptions over that period of time, and was based on advice from its market team and all central banks and other officials involved in its decision making, Lagarde explained.

    “It seemed an appropriate number in order to normalize our balance sheet, bearing in mind that the key tool is the interest rate,” she said.

    The U.S. Federal Reserve on Wednesday increased its main rate by 0.5 percentage points, as did the Bank of England and Swiss National Bank on Thursday morning.

    “In contrast to the Bank of England, this is a hawkish hike, given the language on [quantitative tightening] and a definitive start date,” said analysts at BMO Capital Markets.

    However, they noted the ECB was lagging other central banks in reducing its balance sheet and that reinvestments under its pandemic emergency purchase program would continue.

    “The language in the statement has an operational feel to it, and the Bank is leaving the path of QT open-ended,” they wrote in a note.

    [ad_2]

    Source link

  • OPEC+ agrees to stick to its existing policy of reducing oil production ahead of Russia sanctions

    OPEC+ agrees to stick to its existing policy of reducing oil production ahead of Russia sanctions

    [ad_1]

    Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November.

    Vladimir Simicek | Afp | Getty Images

    An influential alliance of oil producers on Sunday agreed to stay the course on output policy ahead of a pending ban from the European Union on Russian crude.

    OPEC and non-OPEC producers, a group of 23 oil-producing nations known as OPEC+, decided to stick to its existing policy of reducing oil production by 2 million barrels per day, or about 2% of world demand, from November until the end of 2023.

    Energy analysts had expected OPEC+ to consider fresh price-supporting production cuts ahead of a possible double blow to Russia’s oil revenues.

    The European Union is poised to ban all imports of Russian seaborne crude from Monday, while the U.S. and other members of the G-7 will impose a price cap on the oil Russia sells to countries around the world.

    The Kremlin has previously warned that any attempt to impose a price cap on Russian oil will cause more harm than good.

    Oil prices have fallen to below $90 a barrel from more than $120 in early June ahead of potentially disruptive sanctions on Russian oil, weakening crude demand in China and mounting fears of a recession.

    Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November. It came despite calls from the U.S. for the group to pump more to lower fuel prices and help the global economy.

    [ad_2]

    Source link

  • Credit Suisse shareholders greenlight $4.2 billion capital raise

    Credit Suisse shareholders greenlight $4.2 billion capital raise

    [ad_1]

    The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland March 24, 2021.

    Arnd Wiegmann | Reuters

    Credit Suisse shareholders on Wednesday approved a 4 billion Swiss franc ($4.2 billion) capital raise aimed at financing the embattled lender’s massive strategic overhaul.

    Credit Suisse’s capital raising plans are split into two parts. The first, which was backed by 92% of shareholders, grants shares to new investors including the Saudi National Bank via a private placement. The new share offering will see the SNB take a 9.9% stake in Credit Suisse, making it the bank’s largest shareholder.

    SNB Chairman Ammar AlKhudairy told CNBC in late October that the stake in Credit Suisse had been acquired at “floor price” and urged the Swiss lender “not to blink” on its radical restructuring plans.

    The second capital increase issues newly registered shares with pre-emptive rights to existing shareholders, and passed with 98% of the vote.

    Credit Suisse Chairman Axel Lehmann said the vote marked an “important step” in the building of “the new Credit Suisse.”

    “This vote confirms confidence in the strategy, as we presented it in October, and we are fully focused on delivering our strategic priorities to lay the foundation for future profitable growth,” Lehmann said.

    Credit Suisse on Wednesday projected a 1.5 billion Swiss franc ($1.6 billion) loss for the fourth quarter as it begins its second strategic overhaul in less than a year, aimed at simplifying its business model to focus on its wealth management division and Swiss domestic market.

    The restructuring plans include the sale of part of the bank’s securitized products group (SPG) to U.S. investment houses PIMCO and Apollo Global Management, as well as a downsizing of its struggling investment bank through a spin-off of the capital markets and advisory unit, which will be rebranded as CS First Boston.

    The multi-year transformation aims to shift billions of dollars of risk-weighted assets from the persistently underperforming investment bank to the wealth management and domestic divisions, and to reduce the group’s cost base by 2.5 billion, or 15%, by 2025.

    ‘Too big to fail’ but more transparency needed

    Vincent Kaufman, CEO of the Ethos Foundation, which represents hundreds of Swiss pension funds that are active shareholders in Credit Suisse, voiced disappointment ahead of Wednesday’s vote that the group was no longer considering a partial IPO of the Swiss domestic bank, which he said would have “sent a stronger message to the market.”

    Despite the dilution of shares, Kaufman said the Ethos Foundation would support the issuance of new shares to existing shareholders as part of the capital raise, but opposed the private placement for new investors, primarily the SNB.

    “The capital increase without pre-emptive rights in favor of new investors exceed our dilution limits set in our voting guidelines. I discussed with several of our members, and they all agree that the dilution there is too high,” he said.

    “We do favor the part of the capital increase with preemptive rights, still believing that the potential partial IPO of the Swiss division would have also been a possibility to raise capital without having to dilute at such a level existing shareholders, so we are not favoring this first part of the capital increase without pre-emptive rights.”

    At Credit Suisse’s annual general meeting in April, the Ethos Foundation tabled a shareholder resolution on climate strategy, and Kaufman said he was concerned about the direction this would take under the bank’s new major shareholders.

    ABRDN: Despite risks, their are pockets of real value in Credit Suisse

    “Credit Suisse remains one of the largest lenders to the fossil fuel industry, we want the bank to reduce its exposure, so I’m not sure this new shareholder will favor such a strategy. I’m a little bit afraid that our message for a more sustainable bank will be diluted among these new shareholders,” he said.

    Wednesday’s meeting was not broadcast, and Kaufman lambasted the Credit Suisse board for proposing a capital raise and entering in new external investors “without considering existing shareholders” or inviting them to the meeting.

    He also raised questions about “conflict of interest” among board members, with board member Blythe Masters also serving as a consultant to Apollo Global Management, which is buying a portion of Credit Suisse’s SPG, and board member Michael Klein slated to head up the new dealmaking and advisory unit, CS First Boston. Klein will step down from the board to launch the new business.

    “If you want to restore trust, you need to do it clean and that’s why we’re still not convinced. Again, a stronger message with an IPO of the Swiss domestic bank would have reassured at least the pension funds that we are advising,” he said.

    However, Kaufman stressed that he was not concerned about Credit Suisse’s long-term viability, categorizing it as “too big to fail” and highlighting the bank’s strong capital buffers and shrinking outflows.

    [ad_2]

    Source link

  • Credit Suisse projects $1.6 billion fourth-quarter loss as it embarks on strategy overhaul

    Credit Suisse projects $1.6 billion fourth-quarter loss as it embarks on strategy overhaul

    [ad_1]

    Switzerland’s second largest bank Credit Suisse is seen here next to a Swiss flag in downtown Geneva.

    Fabrice Coffrini | AFP | Getty Images

    Credit Suisse on Wednesday projected a 1.5 billion Swiss franc ($1.6 billion) fourth-quarter loss as it undertakes a massive strategic overhaul.

    The embattled lender last month announced a raft of measures to address persistent underperformance in its investment bank and a series of risk and compliance failures that have saddled it with consistently high litigation costs.

    “These decisive measures are expected to result in a radical restructuring of the Investment Bank, an accelerated cost transformation, and strengthened and reallocated capital, each of which are progressing at pace,” the bank said in a market update on Wednesday.

    Credit Suisse revealed that it had continued to experience net asset outflows, and said these flows were approximately 6% of assets under management at the end of the third quarter. The Zurich-based bank flagged last month that this trend continued in the first two weeks of October, after reports cast doubt over its liquidity position and credit default swaps spiked. Credit default swaps are a type of financial derivative that provide the buyer with protection against default. 

    Swiss pension fund foundation CEO says he's 'not convinced' by Credit Suisse restructure

    “In wealth management, these outflows have reduced substantially from the elevated levels of the first two weeks of October 2022 although have not yet reversed,” Credit Suisse said Wednesday.

    The group expects to record a 75 million Swiss franc loss related to the sale of its shareholding in British wealth tech platform Allfunds group, while lower deposits and reduced assets under management are expected to lead to a fall in net interest income, recurring commissions and fees, which the bank said is likely to lead to a loss for its wealth management division in the fourth quarter.

    “Together with the adverse revenue impact from the previously disclosed exit from the non-core businesses and exposures, and as previously announced on October 27, 2022, Credit Suisse would expect the Investment Bank and the Group to report a substantial loss before taxes in the fourth quarter 2022, of up to CHF ~1.5 billion for the Group,” the bank said.

    Credit Suisse plunges on huge Q3 loss and strategic overhaul

    “The Group’s actual results will depend on a number of factors including the Investment Bank’s performance for the remainder of the quarter, the continued exit of non-core positions, any goodwill impairments, and the outcome of certain other actions, including potential real estate sales.”

    Credit Suisse confirmed that it has begun working toward the targeted 15%, or 2.5 billion Swiss francs, reduction of its cost base by 2025 with a targeted reduction of 1.2 billion Swiss francs in 2023. Layoffs of 5% of the bank’s workforce are underway alongside reductions to “other non-compensation related costs.”

    Stock picks and investing trends from CNBC Pro:

    The bank announced last week that it would accelerate the restructure of its investment bank by selling a significant portion of its securitized products group (SPG) to Apollo Global Management, reducing SPG assets from $75 billion to approximately $20 billion by the middle of 2023.

    “These actions and other deleveraging measures including, but not limited to, in the non-core businesses, are expected to strengthen liquidity ratios and reduce the funding requirements of the Group,” it said Wednesday.

    Credit Suisse holds an extraordinary general meeting on Wednesday, at which shareholders will vote on the group’s restructuring plans and capital raising proposals.

    Credit Suisse shares fell more than 5% in early trade.

    [ad_2]

    Source link

  • New global climate deal struck at conference in Egypt

    New global climate deal struck at conference in Egypt

    [ad_1]

    Climate reparations, or “loss and damage” funding, is a highly divisive and emotive issue that is seen as a fundamental question of climate justice.

    Sean Gallup | Getty Images News | Getty Images

    Government ministers and negotiators from nearly 200 countries finally secured an agreement Sunday aimed at keeping a critically important global heating target alive.

    The new political deal reaffirms efforts to limit global temperature rise to the crucial temperature threshold of 1.5 degrees Celsius above pre-industrial levels and the creation of a new “loss and damage” fund that would compensate poor nations that are victims of extreme weather worsened by climate change.

    The two-week-long COP27 climate summit took place in Egypt’s Red Sea resort town of Sharm el-Sheikh against a backdrop of increasing extreme weather events, geopolitical conflicts and a deepening energy crisis.

    Delegates struggled to build consensus on an array of issues, even as a flurry of U.N. reports published ahead of the conference made clear just how close the planet is to irreversible climate breakdown.

    The scale of division between climate envoys saw talks run beyond Friday’s deadline, with campaigners accusing the U.S. of playing a “deeply obstructive” role by blocking the demands of developing countries. The final agreement was reached in the early hours of Sunday morning following tense negotiations throughout the night, with many delegates exhausted by the time the deal was announced.

    Some of the major sticking points included battles over whether all fossil fuels or just coal should be named in the decision text and whether to set up a “loss and damage” fund for countries hit by climate-fueled disasters.

    The highly divisive and emotive issue of loss and damage dominated the U.N.-brokered talks and many felt the success of the conference hinged on getting wealthy countries to agree to establish a new fund.

    The summit made history as the first to see the topic of loss and damage funding formally make it onto the COP27 agenda. The issue was first raised by climate-vulnerable countries 30 years ago.

    Lifting hopes of a breakthrough on loss and damage thereafter, the European Union said late Thursday that it would be prepared to back the demand of the G-77 group of 134 developing nations to create a new reparations fund.

    The proposal was welcomed by some countries in the Global South, although campaigners decried the offer as a “poison pill” given the bloc said it was only willing to provide aid to “the most vulnerable countries.”

    Rich countries have long opposed the creation of a fund to address loss and damage and many policymakers fear that accepting liability could trigger a wave of lawsuits by countries on the frontlines of the climate emergency.

    [ad_2]

    Source link