The Morning Ledger: Deutsche Bank Should Avoid Lehman Fate


Sep 30, 2016 6:56 am ET

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A statue is seen subsequent to a trademark of Germany’s Deutsche Bank in Frankfurt, Germany, Jan. 26, 2016.
Reuters

Good Morning. The good news is that Deutsche Bank AG is substantially not going to spin into a subsequent Lehman Brothers, though a bad news is distinguished sidestep supports are streamer for a hills, pulling billions of dollars in bearing to a German banking giant, James Mackintosh writes. While a same form of exodus helped propel Lehman into oblivion, Deutsche Bank has a opposite and some-more diversified patron and item base, and many softened liquidity.

Still, a clients have changed to take billions out of Deutsche Bank amid concerns about a health in a arise of a suggested $14-billion allotment with a U.S. Justice Department associated to a doing of debt securities, Rob Copeland and Jenny Strasburg report. It says it skeleton to compensate reduction than “anywhere near” that amount. The patron shelter outlines a little fragment of patron deposits, though shows excitability about Deutsche Bank’s ability to continue a challenges, some of that are specific to a bank and others wrought by mercantile conditions plaguing European banks as a group. The DOJ reportedly would like to organisation a Deutsche Bank allotment with others it skeleton to replenish from Britain’s Barclays PLC and Switzerland’s Credit Suisse Group AG (more on that below).

CFO JOURNAL TODAY

Drives like a dream, though compensate courtesy to a wheel. Unlike many other financial chiefs, BMW AG’s new financial arch won’t have to do any firefighting though inherits a solid, essential association from his predecessor, attention experts said. He will, however, have to keep shareholders assured amid a elemental changes available a Bavarian automobile maker, Nina Trentmann reports. BMW promoted Nicolas Peter as house member for finance, effective in January. He will attain Friedrich Eichiner, who will retire.

Coming money-market manners changes quell CP issuance. Banks, both unfamiliar and domestic, continue to diminish their distribution of blurb paper, as new manners ruling income marketplace supports are set to take outcome on Oct 14, according to a news by Fitch Ratings Inc. The volume of U.S. bank blurb paper superb fell by 16%, or $46 billion, from a finish of Apr until Sep 23, formed on a Fitch research of Federal Reserve data. Foreign bank blurb paper fell even more, by 23%, or $66 billion, Richard Teitelbaum reports.

Zynga’s EA dais expands. Zynga Inc. plucked another executive with knowledge during Electronic Arts Inc., stuffing a scarcely yearlong cavity during financial arch during a mobile videogame maker., Sarah E. Needleman reports. Gerard Griffin had spent a past decade during EA, where he many recently was comparison clamp trainer of finance. He is a latest in a fibre of comparison hires underneath Chief Executive Frank Gibeau, a former two-decade EA veteran.

THE DAY AHEAD


A protester cleans adult a ridicule oil brief outward BP PLC Melbourne domicile in Australia, April 14, 2016.
European Pressphoto Agency

‘Deepwater Horizon’ Film Poses Fresh Woes for BP.The national recover Friday of “Deepwater Horizon” brings a British appetite hulk BP PLC back into a spotlight. The new movie, a $100 million-plus prolongation from Lions Gate Entertainment Corp., stars Mark Wahlberg and Kate Hudson and doesn’t bashful divided from unflattering portrayals of BP executives, who are decorated as some-more endangered about budgets and schedules than safety.

Chinese yuan becomes haven currency. China’s long-held enterprise to yield an choice to a U.S. dollar will get a boost on Oct 1, when a yuan enters a International Monetary Fund’s basket of haven currencies, fixation it alongside a pound, euro, yen and dollar. However, there is still a prolonged approach to go for a yuan to turn a world’s go-to currency, Bloomberg reports.

CORPORATE NEWS


The Robert F. Kennedy Department of Justice Building in Washington.
Associated Press

U.S. seeks pre-election allotment of bank mis-selling claims. The U.S. Department of Justice hopes to determine an omnibus allotment with Barclays PLC, Credit Suisse Group AG and Deutsche Bank AG, extracting multibillion dollar fines from 3 of Europe’s biggest lenders for mis-selling debt securities, according to a story by a Financial Times. By organisation a 3 banks together into a singular understanding a DoJ hopes to grasp limit open impact by collecting an eye-catching sum in penalties from a contingent usually weeks before a US presidential election.

Qualcomm in Talks to Acquire NXP Semiconductors. Qualcomm Inc. is in talks to acquire NXP Semiconductors NV, a understanding that approaching would cost some-more than $30 billion and accelerate a converging rush in a semiconductor industry. The companies could strike an agreement in a subsequent dual to 3 months, according to people informed with a matter. As always, it is probable there won’t be one, and some of a people pronounced Qualcomm is concurrently exploring other understanding options.

Coca-Cola to Produce, Distribute Bottled Dunkin’ Donuts Coffee. Dunkin’ Brands Group Inc. pronounced Thursday that it would launch bottled Dunkin’ Donuts coffee in U.S. stores early subsequent year. The ready-to-drink coffee will be constructed and distributed by Coca-Cola Co. Coke and Dunkin’ are holding aim during a fast-growing canned and bottled coffee marketplace that has prolonged been dominated by a corner try between PepsiCo Inc. and Starbucks Corp., with their top-selling Starbucks Frappuccino.

Samsung starts offered Galaxy 7 again. Samsung Electronics Co. Ltd. is going to put a Galaxy Note 7 smartphone behind on sale in South Korea this weekend, a BBC reports. Earlier this month it dangling sales of a phone and removed those already sole due to inadequate batteries that could locate glow while charging. Around 2.5 million phones have been sole worldwide. The phone is due to go behind on sale in a US on 21 Oct and in Europe from 28 October.

Telefónica forced to check IPO of Telxius. Telefónica SA, a Spanish telecommunications group, was forced to check a designed €1.2 billion levity of a infrastructure section on Thursday after unwell to attract sufficient direct for a share sale, a Financial Times reports. The inventory of Telxius Telecom SA was partial of a devise for Telefónica to revoke a debt burden, though investors demanded a high reward given of a spin-off’s undersea wire business.

Nissan Seeks Brexit Trade Assurances Before New U.K. Investment. Nissan Motor Co. might throw a vital investment in a U.K. though some-more clarity on nation’s skeleton for post-Brexit trade family with a European Union, pronounced Chief Executive Carlos Ghosn. Mr. Ghosn pronounced in remarks during a Paris engine uncover on Thursday that Nissan, owners of a U.K.’s largest automobile bureau by volume, “will not make an critical investment preference in a dark.” He was referring to where it would furnish a entrance chronicle of a Qashqai sport-utility vehicle.

Revived British Steel behind in distinction 100 days after Tata sale, says boss. The trainer of a regenerated British Steel Ltd. has claimed that Tata Steel Ltd. “lost interest” in a Scunthorpe steelworks, one of usually dual left in Britain, and that a site is behind in distinction usually 3 months after it was sole by a Indian company, a Guardian reports.Roland Junck, executive authority of British Steel, pronounced a Scunthorpe steelworks had turn “inward-looking” and “stopped comparing themselves with a best.”

REGULATION


Wells Fargo CEO John Stumpf testifies on Capitol Hill in Washington, Thursday, Sept. 29, 2016, before a House Financial Services Committee.
Associated Press

Lawmakers take some-more swings during Wells Fargo CEO John Stumpf. Wells Fargo Co. Chief Executive John Stumpf struggled to mountain a invulnerability Thursday in a face of steady attacks over a bank’s sales practices from members of a House Financial Services Committee. In his second Capitol Hill coming in as many weeks, Mr. Stumpf again voiced bewail for his company’s actions and pronounced Wells Fargo’s house was operative to examine how problems with sham accounts and unapproved nosiness in patron business snowballed over 5 years.

Salesforce.com to press regulators to retard Microsoft-LinkedIn deal. Salesforce.com Inc. pronounced it would press regulators in a U.S. and Europe to retard Microsoft Corp.’s $26.2 billion partnership of LinkedIn Corp., arguing a understanding would harm foe by giving a business-software opposition too many control over a social-networking company’s immeasurable pool of data. Salesforce’s open handbill opposite a understanding on Thursday came 3 months after it mislaid a behest fight for LinkedIn to Microsoft.

China to contention homegrown nuclear-reactor pattern for U.K. review. China will contention a homegrown Hualong One nuclear-reactor pattern for U.K. examination as it moves toward building a span of reactors in southern England and seeks to enhance exports to other nations, Bloomberg reports. State-owned China General Nuclear Power Corp. will send a pattern of a reactor to U.K. regulators for approval, that a association aims to finish in 5 years, it pronounced in a matter Thursday after signing an atomic appetite settle in London. The regulator contingency transparent a reactor pattern before construction can begin.

Glencore’s Congo tie adds another source of unease. A Justice Department review into a Glencore PLC business partner in a Democratic Republic of Congo could poise another headache for a Swiss mining-and-trading company, that has been struggling with flighty commodity prices and concerns about a debt. The Justice Department on Thursday announced a allotment with New York hedge-fund organisation Och-Ziff Capital Management Group LLC in that a association concluded to compensate $412 million in rapist and polite penalties and a section pleaded guilty to rapist charges associated to a activities in Africa.

Germany’s Bosch sues South Korea’s Mando in U.S. for purported obvious infringements. German automotive tools tradesman Robert Bosch GmbH has lodged a lawsuit in a U.S. opposite South Korean counterpart Mando Corp. alleging transgression of 4 of a patents, according to a U.S. justice filing. According to Reuters, shares in Mando tumbled 13% on Friday to their lowest levels in some-more than dual months after a fit was filed during U.S. District Court for a Eastern District of Michigan on Thursday.

Samsung in U.S. ‘exploding soaking machines’ probe. Samsung Electronics Co. Ltd. has reliable it is in talks with US consumer watchdogs after a lawsuit opposite a organisation over “exploding” soaking machines, a BBC reports. The Consumer Product Safety Commission warned of problems with some of Samsung’s top-load machines. It comes as a U.S. law organisation filed a fit opposite a South Korean firm, observant a error can lead to repairs or damage. Models sole outward North America are not influenced by this issue.

RBS to rename investment bank in ringfencing revamp. Royal Bank of Scotland PLC is to rename a investment bank as partial of skeleton to approve with supposed ringfencing law designed to strengthen taxpayers from ever carrying to bail out a bank again, a Financial Times reports. Lenders with some-more than £25 billion of deposits contingency hive off their consumer-facing business from riskier investment banking activities underneath a rules, that come into force in 2019. RBS pronounced on Friday it will place a bulk of a U.K. and western European banking business within a ringfence by a finish of 2018.

Norway’s Telenor warns Ofcom over bursting BT. Telenor ASA, a Norwegian telecommunications provider, has warned a U.K. regulator Ofcom that posterior a “legal separation” of BT Group PLC and a Openreach section is a “dead end,” in a pointer that European telecoms companies fear Britain could set a dangerous conform for a sector, a Financial Times reports. Ofcom has come underneath vigour to suggest that BT and Openreach, a network division, be totally damaged up, though it has instead pushed for a “legal separation” of a dual companies, with opposite government structures.

EARNINGS


Cans of Pepsi are displayed during a Roland Garros track in Paris, France, May 28, 2016.
Reuters

PepsiCo Boosts Earnings Forecast as Results Top Views. PepsiCo Inc. lifted a 2016 distinction opinion after income surged in pivotal abroad markets like China and as a U.S. libation business picked adult steam in a third quarter. The builder of Lay’s potato chips and Tropicana extract pronounced Thursday it now expects practiced gain per share to grow 10% instead of 9% this year, a second true entertain it has lifted superintendence as a cost-cutting pull also helped lift a bottom line.

Costco Earnings Get Boost From Switch to Visa. Costco Wholesale Corp.’s Jun switch to Visa Inc. is profitable off. The room bar sequence reported aloft quarterly distinction Thursday increasing by reduce credit label fees and other terms from a new understanding to accept Visa-brand cards. For a entertain finished Aug. 28, Costco’s distinction rose 1.6% to $779 million notwithstanding aloft wages, reduce gasoline sales and deflationary vigour on food apparatus including beef and eggs.

HM increase strike by prohibited weather. Swedish conform sequence Hennes Mauritz AB pronounced increase in a third entertain were strike by a multiple of prohibited weather, increasing markdowns and a stronger dollar, a Guardian reports. The tradesman pronounced a autumn trade deteriorate got off to a tough start given unusually prohibited Sep continue in a UK and other European countries put people off shopping warmer wardrobe and led to increasing discounting. Pre-tax distinction fell 9.2% to SEK 6.3 billion ($731.4 million) between 1 Jun and 31 August, descending brief of analysts’ expectations.

HMV sales tumble as decrease in earthy media continues. Sales during HMV went retrograde final year as it retreated from a severe video games market, and Britons’ pierce divided from earthy CD, films and games collections continued, according to a Guardian.

ECONOMY

Dealmaking falls to three-year low. Global dealmaking has sunk to a lowest turn in 3 years due to a record value of cold bids, a pointy dump in U.S. activity and a 20-year low for British impasse in takeover deals, a Financial Times reports. Data from Thomson Reuters uncover that partnership and partnership activity has slowed considerably in a initial 3 buliding of 2016, with companies so distant similar to $2.37 trillion value of deals – a 22% dump compared with a record-breaking activity of a year ago.

UK mercantile expansion revised adult to 0.7%. The U.K. economy grew by 0.7% in a 3 months to a finish of June, adult from a 0.6% initial estimated, a BBC reports. The figures, from a Office for National Statistics uncover mercantile expansion accelerated faster than suspicion in a run-up to a EU referendum. Second-quarter sum domestic product accelerated from a prior quarter. Other central total uncover a U.K.’s services zone grew many some-more strongly than approaching in July.

U.K. Consumers Shake Off Brexit as Economic Optimism Surges. U.K. consumers seem to be shrugging off some initial Brexit concerns as their misfortune fears about a economy are allayed, Bloomberg reports. GfK pronounced Friday that a certainty index increasing 6 points to reduction 1 in September, convalescent a belligerent mislaid after a opinion to leave a European Union in June. Households’ expectations for their personal finances improved, as did a opinion for a economy. That magnitude jumped 13 points to a second top this year.

CFO MOVES

American Eagle Outfitters Inc., a Pittsburgh attire retailer, named Robert Madore financial chief, effective Oct. 28. He will attain Scott Hurd, who has served as halt CFO given April. Mr. Hurd will sojourn with a association as a accounting chief. Mr. Madore many recently was CFO of clothier Ralph Lauren Corp. At American Eagle, Mr. Madore will accept a income of $850,000, a signing reward of $500,000 and relocation reimbursement. He will have a event for a income reward targeted during 85% of his income and equity awards subsequent year valued during $850,000.

THE WEEKEND READER

Asset-light business models win over investors. Since a industrial revolution, companies have raced to amass a many tender materials, properties, plants, and equipment, desiring that owning and carrying some-more was a homogeneous of being value more, Harvard Business Review writes. But suddenly, in a digital age, a earthy resources that a large industrial companies have acquired are apropos some-more and some-more burdensome.

EB-5 visa module has drawbacks. Bloomberg BusinessWeek has a fascinating story about a EB-5 program, started in 1990 to concede impending immigrants to deposit in hard-up U.S. regions in sell for proxy residency. But it is abundant with abuse and fraud. These initiatives don’t always emanate a compulsory jobs, lapse investors’ capital, or assistance unsettled communities.

Winners and losers in government-funding compromise. Funding for Zika relief, a H2O predicament in Flint, Mich., and Louisiana inundate victims were helped by a government’s agreement to keep a nation saved until during slightest December, Vox writes. On a other hand, people who caring about income in politics, Democratic parliament possibilities in bridgehead states and regressive efforts to quell termination are approaching to be disappointed.

The Morning Ledger from CFO Journal cues adult a many critical news in corporate financial any weekday morning. Send us tips, suggestions and complaints: maxwell.murphy@wsj.com. Get a giveaway Morning Ledger emailed to we any weekday morning by clicking here, or at: http://on.wsj.com/TheMorningLedgerSignup

 

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