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BANK

Nordea & Handelsbanken see earnings tumble

Nordic banking groups Nordea and Handelsbanken posted sharply lower second quarter earnings on Tuesday as they felt the sting of the ongoing global financial crisis.

For the April to June quarter, Nordea, the largest bank in the Nordic region, reported a 15 percent drop in net profits to 693 million euros ($1.1 billion) from 816 million a year earlier.

On a more positive note, the bank’s total operating income during the quarter came in two percent higher than the corresponding period of last year at 1.99 billion euros, the bank said in its earnings statement.

Nordea also lowered its outlook for the remainder of 2008 to around five percent growth, down from a previous estimate of between five and 10 percent.

“Signs of slowing international economic growth particularly in the United States and in large parts of Europe, are becoming increasingly apparent,” the group said in its statement.

“The Nordic economies have so far been relatively resilient in the face of the international slowdown, but the uncertainty has gradually increased.”

After issuing its report, Nordea saw its stock price slip 4.15 percent to 85.40 kronor ($ 14.37) per share in midday trading on the Stockholm stock exchange, which by 12pm was down 2.88 percent.

Nordea’s Swedish competitor Handelsbanken meanwhile also saw its earnings erode in the second quarter compared to the corresponding period of 2007, although results improved somewhat from the beginning of the year.

From April to June, the banking group’s net profit plunged 34 percent to 2.478 billion kronor, down from 3.733 billion kronor a year earlier.

Total income also slipped five percent year-on-year to 7.199 billion kronor, while its operating profit shrank 22 percent to 3.433 billion kronor.

In its earnings statement, Handelsbanken however stressed that its net profit increased by eight percent from the first quarter of 2008, while its operating profit jumped 18 percent and total income was up 19 percent in the same period.

After posting its results, Handelsbanken’s stock price inched up 0.64 percent to 156.50 kronor per share.

BANK

Deutsche Bank to pay $130m to settle US bribery probes

Deutsche Bank will pay $130 million to settle a foreign bribery probe and fraud charges in precious metals trading, US officials announced on Friday.

Deutsche Bank to pay $130m to settle US bribery probes
A woman walks past the offices of Deutsche Bank in London. Photo: Tolga Akmen / AFP
The bribery case relates to illegal payments and to false reporting of those sums on the bank's books and records between 2009 and 2016, the Department of Justice said in a press release.
   
The bank “knowingly and wilfully” kept false records after employees conspired with a Saudi consultant to facilitate bribe payments of over $1 million to a decision maker, the DOJ said.
   
In another case, the bank paid more than $3 million “without invoices” to an Abu Dhabi consultant “who lacked qualifications… other than his family relationship with the client decision maker,” the DOJ said.
   
In addition to criminal fines and payments of ill-gotten gains, Deutsche Bank agreed to cooperate with government investigators under a three-year deferred prosecution agreement.
 
   
In the commodities fraud case, Deutsche Bank metals traders in New York, Singapore and London between 2008 and 2013 placed fake trade orders to profit by deceiving other market participants, the DOJ said.
   
The agreement took into account Deutsche Bank's cooperation with the probes, DOJ said.
   
“Deutsche Bank engaged in a criminal scheme to conceal payments to so-called consultants worldwide who served as conduits for bribes to foreign officials and others so that they could unfairly obtain and retain lucrative business projects,” said Acting US Attorney Seth D. DuCharme of the Eastern District of New York.
   
“This office will continue to hold responsible financial institutions that operate in the United States and engage in practices to facilitate criminal activity in order to increase their bottom line.”
   
“We take responsibility for these past actions, which took place between 2008 and 2017,” said Deutsche Bank spokesperson Dan Hunter, adding that the company has taken “significant remedial actions” including hiring staff and upgrading technology to address the shortcomings.
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