Greek leaders struggled to agree on required budget cuts yesterday as Citigroup raised the probability of the country’s exit from the euro to 90 per cent. The leaders of the three parties in the new coalition Government met for three hours in a session at which they were meant to sign off on a plan for €11.7bn (£8.5bn) in budget cuts demanded by Europe and the International Monetary Fund. The meeting ended shortly before talks began between Antonis Samaras, the Prime Minister, and José Manuel Barroso, the European Commission President. However, the party leaders were unable to reach a consensus, The Times reports.
Facebook shares dropped 10% in after-hours trading following its latest results. The Californian company had been under intense pressure to deliver strong figures given the almost 30% drop in its share price since the $104bn (£66bn) flotation in May. Although revenues climbed 32% to $1.18bn in the second quarter, beating analysts’ estimates, it failed to convince investors who had seen saw revenues climb 45% in the first quarter. At the same time its spending on sales and marketing more than tripled to $392m in the period. As had been forecast, the cost of share-based pay plan for employees saw Facebook report an overall loss of $157m for the quarter. But as founder and chief executive Mark Zuckerberg made an appearance on the company’s conference call with Wall Street analysts on Thursday night, the focus was squarely on how quickly the social network site will be able to drive revenues, The Telegraph reports.
It was obvious for the past few weeks that the April-June period would be tough for oil companies. So thank you, Shell, BG Group, Statoil, ExxonMobil and a handful of others for confirming as much on Thursday in your differing but inimitable ways. There is a pattern to the oil sector’s second-quarter numbers: production and operating cash flow mostly up, underlying profit mostly down. The latter was partly due to things such as maintenance costs (at Shell in particular) and partly to the volatile oil price. That will not change for the next few quarters. Oil stocks look cheap relative to the wider market, trading on a price to earnings multiple in many cases of under 10 times. That is well below the historic average. For now, however, given pricing pressures, it looks about right, The Financial Times´s Lex column writes.
NatWest has become the second financial institution to report technical problems with its systems today after up to 2m Nationwide transactions were duplicated. NatWest said on its Twitter feed: “Some customers may have issues with their online banking and using their debit cards at the moment. Working as hard as we can to resolve. We’ll post updates as soon as we have more information.” Cash machine withdrawals using debit cards are also affected, the bank added. Earlier in the summer the bank suffered a major systems collapse when millions of customers were unable to check their balances, withdraw cash or make payments. NatWest promised that no customers would be left out of pocket as a result of the technology problems, The Telegraph says.
George Osborne was yesterday urged to stick to his faltering economic strategy as the longest double-dip recession in modern history threatened to blow a gaping hole in his budget. Angel Gurria, the head of the Organisation for Economic Co-operation and Development(OECD), told the Chancellor to ‘stay the course’ despite the 0.7% slump in gross domestic product in the second quarter of the year. It came as analysts warned that the government will borrow £162bn more than planned over the next five years as the economic malaise takes its toll on the creaking public finances. Fears are also mounting that Britain will be stripped of the coveted AAA credit rating it has held since 1978 and on which Osborne has staked his political reputation, The Daily Mail reports.
Lloyds Banking revealed on Thursday that it had received subpoenas from government agencies investigating the Libor rate-rigging scandal. The bank, which is among a number being investigated, said: “Certain members of the group have received subpoenas and requests for information from certain government agencies and are co-operating with their investigations”. Chief executive Antonio Horta-Osorio said he was prevented from giving further details while the investigations continued but he felt there would be greater clarity on the issue over the next six months. His comments came as the bank took an extra £700m hit to deal with compensation claims for mis-selling payment protection insurance, The Scotsman says.