UPDATE 1-U.S. cannot overhaul tax code in 2 months-Geithner
A select group of lawmakers are grappling with how to find
at least $1.2 trillion in savings over the next decade.
Although there is pressure on the six Democrats and six
Republicans to fix the tax code, Geithner said it was not
possible to do so by a November deadline.”We are not going to do fundamental tax reform in two
months,” Geithner told the Senate Small Business Committee.
Geithner pointed to tax benefits for small businesses that are
part of the Obama administration’s $447 billion jobs program.Those include an extension of the employee payroll tax
holiday and allowing companies to deduct the value of their new
investments from their tax obligations.”This is a bridge to fundamental tax reform not a
substitute,” he said. Senate Republicans have already blocked
the overall bill, forcing the administration and Senate
Democrats to consider pushing parts of the bill through
Congress.Geithner urged Congress to support specific provisions in
the proposal. He said that small U.S. businesses still face a
very tough economy and are experiencing more challenges than
larger businesses after the recession.”The biggest problem facing the economy today… if you
look at what businesses say today, their overwhelming challenge
is they don’t see enough growth and demand for their products,”
he said.The congressional deficit reduction panel has until Nov. 23
to reach an agreement to curb federal spending. If lawmakers
fail to do so, automatic budget cuts will be triggered starting
in 2013 that would cut funding across the board.
Czech Home Credit to boost Russian ops, raise Chinese lending
In Russia, where it has been since 2002 and which is its
largest market by customers, Home Credit will boost its presence
this year, said Milan Tomanek, head of group communication for
Home Credit’s owner PPF.”Until the end of this year only, the Russian Home Credit
wants to increase the number of its offices to 840,” Tomanek
said.Home Credit’s Chinese operations want to double the size of
its lending. It lent out 730 million Chinese Yuan ($114.4
million) in the first half of 2011, he said.The group is also planning to double its presence in China,
start operations in India next month and move into Indonesia
next year, Tomanek said.Tomanek declined to comment on reports that PPF, which is
owned by the richest Czech Petr Kellner, wants to float a share
of the European and Russian division Home Credit B.V.Sources told Reuters in July that Home Credit was mulling an
initial public offering by possibly selling a 25 percent stake.A banking source told Reuters the market window is closed
now and it might not happen until next year.Home Credit B.V., which also operates in the Czech Republic,
Slovakia and Belarus, had net interest income of 339 million
euros ($464.6 million) in the first half of 2011 and net profit
of 133 million euros.Vietnamese and Chinese branches of Home Credit are not part
of Home Credit B.V.
($1=0.730 Euros=6.382 Chinese Yuan)
UPDATE 1-Fitch downgrades UBS, puts other banks on review
* Economic, market, regulatory challenges citedBy Lauren Tara LaCapraOct 13 (Reuters) - Fitch Ratings downgraded UBS AG
on Thursday and placed seven other U.S. and European banks on
credit watch negative, citing challenges in the economy and
financial markets, as well as the impact of new regulations.The ratings agency lowered UBS’s long-term issuer default
rating to A from A+.Fitch is also reviewing ratings for Barclays Bank Plc, BNP Paribas , Credit Suisse Group AG , Deutsche Bank AG , Societe Generale, Bank of America Corp , Morgan Stanley and Goldman Sachs Group Inc for further possible
downgrades.The cuts would in most cases be one notch and in some cases
two notches, Fitch said. A lower bond rating can make debt more
expensive to issue and lead to higher collateral requirements.Earlier on Thursday, Fitch also lowered its ratings on
Royal Bank of ScotlandLloyds Banking Group PLC two notches to A from AA-.Exposure to the European debt crisis and concern about the
business model of pure-play investment banks were catalysts for
most of the ratings actions, Joo-Yung Lee, a managing director
in Fitch’s financial institutions group, told Reuters.”Some of these banks have greater reliance on wholesale
funding and greater reliance on what we view as volatile
trading earnings,” Lee said. “That’s particularly true of
Goldman Sachs and Morgan Stanley in the U.S. They are less
diverse than their global universal bank peers.”In the case of Bank of America, its exposure to
mortagage-related litigation was a driver for Fitch’s review.
Competitors like Wells Fargo & Co and JPMorgan Chase &
Co were not targeted because they have diverse business
models, steady funding streams and no company-specific issues
that put them at serious risk, Lee said.Fitch does not have a specific deadline to finish its
review, but Lee said it hopes to resolve the matter quickly to
reduce market uncertainty.
UPDATE 1-Fitch downgrades UBS, puts other banks on review
* Economic, market, regulatory challenges citedBy Lauren Tara LaCapraOct 13 (Reuters) - Fitch Ratings downgraded UBS AG
on Thursday and placed seven other U.S. and European banks on
credit watch negative, citing challenges in the economy and
financial markets, as well as the impact of new regulations.The ratings agency lowered UBS’s long-term issuer default
rating to A from A+.Fitch is also reviewing ratings for Barclays Bank Plc, BNP Paribas , Credit Suisse Group AG , Deutsche Bank AG , Societe Generale, Bank of America Corp , Morgan Stanley and Goldman Sachs Group Inc for further possible
downgrades.The cuts would in most cases be one notch and in some cases
two notches, Fitch said. A lower bond rating can make debt more
expensive to issue and lead to higher collateral requirements.Earlier on Thursday, Fitch also lowered its ratings on
Royal Bank of ScotlandLloyds Banking Group PLC two notches to A from AA-.Exposure to the European debt crisis and concern about the
business model of pure-play investment banks were catalysts for
most of the ratings actions, Joo-Yung Lee, a managing director
in Fitch’s financial institutions group, told Reuters.”Some of these banks have greater reliance on wholesale
funding and greater reliance on what we view as volatile
trading earnings,” Lee said. “That’s particularly true of
Goldman Sachs and Morgan Stanley in the U.S. They are less
diverse than their global universal bank peers.”In the case of Bank of America, its exposure to
mortagage-related litigation was a driver for Fitch’s review.
Competitors like Wells Fargo & Co and JPMorgan Chase &
Co were not targeted because they have diverse business
models, steady funding streams and no company-specific issues
that put them at serious risk, Lee said.Fitch does not have a specific deadline to finish its
review, but Lee said it hopes to resolve the matter quickly to
reduce market uncertainty.
Paris real estate group FPF open to takeover
FPF’s board on Tuesday rejected an offer by rival Paris Hotels Roissy Vaugirard (PHRV) valuing it at 100 euros a share, arguing that the offer was too low, opportunistic and lacking in clarity as to its aim.The price was at a 26 percent discount to FPF’s net asset value per share of 135.19 euros and 10.6 percent below its average closing share price in July, before stock markets were hammered by the euro zone debt crisis, FPF said.”We are not excluding being bought, but two things interest us in the context of a merger transaction,” Dumortier said. “It must be supported by a true industrial project and at a price that is very close to the net asset value.”With Paris Hotels Roissy Vaugirard, “the industrial project doesn’t exist,” the CEO said. “Furthermore, we know that PHRV is a highly indebted group.”FPF is relatively light on debt, with a 33 percent loan-to-value ratio and 700 million euros ($955 million) of assets, mainly in Paris.Asked whether FPF could itself purchase a rival, Dumortier said he had no targets in mind at the moment.”It’s necessary to find targets that are coherent in terms of their business and which don’t have too much debt in order to be able to finance such a deal,” Dumortier said.FPF is focusing rather on organic growth as it is still targeting about 1 billion euros of assets within two or three years, the CEO said.Shares in FPF were 1.5 percent higher at 101.50 euros by 1102 GMT.($1 = 0.733 Euros)
