May 9, 2024

You are here: Home / 2013 / Archives for April 2013

Archives for April 2013

CNN Gets a Ratings Boost From Boston

April 30, 2013 by Leave a Comment

Breaking news is always good news for CNN, and April’s ratings are the latest example.

Total viewership was up nearly 80 percent compared with the same month a year ago; among the viewers news advertisers pay to reach, the increase was more than 100 percent.

By comparison, MSNBC was actually down in viewers from the same month a year ago — despite the enormous interest in the Boston bombings — which may say something about how viewers see one of CNN’s news channel competitors.

Meanwhile, Fox News, which did not grow nearly as much as CNN, still had plenty of regular viewers to win in all categories.

In total day ratings for April, CNN jumped to an average 638,000 viewers from 356,000 viewers last year. Among viewers 25 to 54, the age group that news advertisers buy, the increase was bigger, to 228,000 from 109,000.

Fox News’s overall numbers were much bigger, with a total average audience for the month of 1.2 million, up from 1.08 million a year ago, a 14 percent increase. In the 25-to-54 group, Fox was up 2 percent, to 278,000 from 273,000.

MSNBC somehow lost viewers, dropping to 407,000 total viewers from 426,000 a year ago. It had no increase in the 25-to-54 group, staying at 139,000.

One reason may have been that MSNBC viewers turn to NBC network coverage when breaking news is on, and the broadcast network did have the most-watched coverage — and among the most critically praised — for two nights of the breaking Boston story.

But not getting any kind of ratings bump at a time of such intense news interest may also be an indication that MSNBC’s viewers look to that channel for opinion-based reporting instead of straight news reporting.

For example, the network’s flagship morning program, “Morning Joe,” was down 10 percent this April, despite the heavy news. And its strongest prime-time hour, with Rachel Maddow, was down 7 percent in total viewers.

Article source: http://www.nytimes.com/2013/05/01/business/media/cnn-gets-a-ratings-boost-from-boston.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Bucks Blog: The Cost to Consumers of a Data Breach

April 30, 2013 by Leave a Comment

A new analysis of a huge data breach last year in Utah estimates that more than 120,000 cases of fraud will occur as a result of information stolen.

Javelin Strategy Research’s analysis also estimates that each incident will result in more than $3,300 in losses, on average, and each consumer who is ultimately victimized as a result of the breach will spend about 20 hours and $770 on lawyers and time lost from work to resolve the case.

Ripple effects from the incident in the spring of 2012 will also prove costly to banks and businesses that may also suffer fraud as a result of the stolen information, said Al Pascual, a security, risk and fraud analyst at Javelin.

“We all need to be aware that breaches are occurring,” he said. “Breaches lead to fraud, and fraud affects all of us.”

Using the specifics of the Utah breach, Javelin applied what it has learned from its prior research about the impact of such breaches — namely, that having your personal information compromised makes you more likely to become a victim of fraud. Javelin estimates that roughly one in four recipients of a data-breach letter ultimately become fraud victims. (The estimate is based on information provided by consumers themselves, rather than law enforcement.)

“These breaches are driving fraud,” Mr. Pascual said. Criminals, he said, are generally not digging through trash or stealing mail to obtain personal data. “They’re stealing it digitally,” he said.

In the Utah case, about 280,000 Social Security numbers belonging to participants in the state Medicaid and Child Health Insurance Program were stolen from a database maintained by the Utah Department of Health. In addition, less sensitive pieces of information on another 500,000 participants were stolen.

Social Security numbers are particularly dangerous in the hands of criminals, because they can be used in combination with other information about you to create or access bank accounts and obtain credit.

The Social Security numbers were used by the department to verify eligibility for the insurance programs. But a contractor did not safeguard the server where the data was stored. The information was not encrypted and was protected only by a weak password that was easily hacked, the Javelin report said.

There may be little that individual consumers can do to prevent such a breach. But there are steps they can, and should, take to protect themselves, if they are notified that their Social Security number has been compromised in a data breach, Mr. Pascual said.

First, you should contact your bank and explain what has happened because many banks still use Social Security numbers to verify customer identity. You can ask for an alternative means of verification, like a specially assigned PIN, or a series of questions known as “dynamic” authentication. For instance, the bank may ask you about the size of recent transactions, or other details that only you would be likely to know, before allowing access to your account online or over the phone.

If the bank isn’t willing or able to provide an alternate method of verification, “It may be worth looking at institutions that offer better protection,” Mr. Pascual said.

Even if you haven’t had your information compromised, you should make use of your bank’s automatic account alerts. Such systems send you an e-mail or text message if unauthorized changes are made to your account, like the addition of a new authorized user or a new bill payment account, or a change of address. They can also notify you of significant transactions, like large withdrawals or transfers. “The consumer is going to know first whether a transaction is valid or not,” he said.

If you’re the victim of a breach and are offered free credit monitoring, you should take advantage of the service, he said. In the Utah case, victims were offered two years of credit monitoring and identity theft insurance.

Ultimately, banks should stop using Social Security numbers as identifiers, he said.

Have you had your personal information stolen? Did fraud occur as a result?

Article source: http://bucks.blogs.nytimes.com/2013/04/30/the-cost-to-consumers-of-a-data-breach/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Bucks Blog: Credit Reports More Accurately Reflect Debts Discharged in Bankruptcy

April 30, 2013 by Leave a Comment

When you file for personal bankruptcy protection and have debts discharged by the court, your credit report is supposed to be updated to reflect that you no longer have to pay those bills.

In the past, the big three credit reporting bureaus weren’t always so good about doing that. But over the past few years, the bureaus have become much better, says John Ulzheimer, president of consumer education at SmartCredit.com.

The reason, he said, is a settlement that the bureaus agreed to as part of a class-action lawsuit. (Mr. Ulzheimer was an expert witness on behalf of plaintiffs in the lawsuit.)

The class-action case, which began as multiple suits in 2005 and 2006, said that the major credit bureaus — Experian, Equifax and TransUnion — issued credit reports stating that consumers were delinquent in making payments on debts that had been eliminated in bankruptcy. Some plaintiffs also said that the credit bureaus didn’t investigate the errors, even after they made the bureaus aware of the problem.

A $45 million financial settlement in the suit was approved by the trial court, but was thrown out in April by the United States Court of Appeals for the Ninth Circuit. The appeals court found that some plaintiffs in the case stood to benefit more than others, creating an improper conflict.

Improvements in the bureaus’ bankruptcy reporting procedures, however, had already gone into effect, as part of an earlier agreement reached as part of the suit in 2008, Mr. Ulzheimer said. As part of that settlement, the credit bureaus agreed to put in place systems to make sure debts accrued before bankruptcy are accurately reported as being included in a bankruptcy filing. (As long as the debts are eligible, of course. Some debts, like student loans, aren’t dischargeable in a bankruptcy.)

The bankruptcy and its negative impact remains on your credit report for years — 10, in the case of a Chapter 7 filing. So is it really a big deal, if your report incorrectly shows that you still owe some debts, since your credit is ruined anyway?

Well, yes, Mr. Ulzheimer said. It’s true that in the year or two immediately after a bankruptcy filing, your credit rating will suffer greatly. If you stay on top of new debts, though, it should gradually begin to improve. But if old debts are still incorrectly shown as due and payable, your credit score would be worse than it should be.

Accurately reflecting the status of your debts “makes the best out of a bad situation,” he said.

You shouldn’t expect all traces of prior delinquency to magically disappear overnight, however. Experian’s Web site notes that after a debt is discharged in a bankruptcy, the associated account isn’t immediately deleted from your credit history. Rather, the site explains, the accounts are “updated” so show they are included in the bankruptcy, so there’s no balance due.

Have you checked your credit report after a bankruptcy filing? Did the report accurately reflect your debts?

Article source: http://bucks.blogs.nytimes.com/2013/04/30/credit-reports-more-accurately-reflect-debts-discharged-in-bankruptcy/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Frequent Flier: Ankasa Executive Sees Airport Security in Action

April 30, 2013 by Leave a Comment

I know some people complain about airport security, but I’ve always been pretty impressed. I remember being on a flight to London that just left the gate when the pilot announced that we had a mechanical issue and we were headed back to the gate. He also told us we had to stay in our seats and we weren’t allowed to even get up to use the restroom.

I thought that was kind of weird, but as soon as we stopped, a bunch of armed men dressed in military fatigues boarded and stormed the cabin. I quickly went from thinking things were weird to thinking things were pretty scary. Everything happened really fast. The military guys, or at least I think they were military, grabbed two men sitting behind me and rushed them off the plane.

I guess I was a little naïve because I thought we would now be on our way. But instead we were asked to exit the plane and to leave all of our stuff behind. That meant everything like briefcases, purses, coats, you name it. We were held in a room just outside the boarding gate and didn’t have a clue what was going on. What was interesting is that not one of us talked to each other.

We had to stay in the room for the next four hours, and if someone had to use a restroom, that person was escorted. When I was escorted to the restroom, I saw that the whole terminal was evacuated.

We did eventually board the plane and when I got back home, I searched everywhere to try to find some information on the incident, but came across nothing. From that point on, I’ve been really aware of how much protection security does without anyone ever realizing it.

The Leonardo da Vinci airport in Rome has to be the most confusing airport in the world. On one of my earlier trips from Rome to Milan, I got to my gate early and decided to have a coffee across from what I thought was my gate.

There were several gates in the same vicinity and every five minutes there would be an incoherent announcement in Italian and the passengers, like a herd of sheep, would shuffle from one gate to the other.

Amused, I paid for my coffee and boarded the plane. I sat down next to an elderly gentleman wearing an old suit that looked like it was from an old classic Sophia Loren movie. I tried to strike up a conversation. I asked in English if he lived in Milan, which was my destination, and if he was traveling for work.

He replied in fluent Italian, which was completely incomprehensible to me. But he ended the sentence in “Bologna.” Not having understood a word he said except “Bologna,” I asked the same question again in my poor Italian, Spanish and French. He replied again in fluent Italian, and was perturbed with me, but he kept ending his reply in “Bologna.”

After a few failed attempts, I looked around the plane, which was almost completely boarded, and heard my name called out on loudspeaker. I pressed the call button and several staff members rushed over to me and start screaming at me in Italian. Again, I had no clue what they were saying. I tried to explain our language predicament, but was getting nowhere. The woman sitting behind me was American and yelled: “Get off this plane, you fool. It’s going to Bologna, not Milan.”

It was not one of my finer travel moments.

By Sachin Ahluwalia, as told to Joan Raymond. E-mail: joan.raymond@nytimes.com

Article source: http://www.nytimes.com/2013/04/30/business/ankasa-executive-sees-airport-security-in-action.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Japan Household Spending Surges

April 30, 2013 by Leave a Comment

A recent run of data has provided encouraging early hope that Abe’s push for aggressive fiscal and monetary policies to get the world’s third-largest economy motoring is having the desired effect.

Separate data on Tuesday also showed the jobless rate fell to the lowest in more than four years, providing another piece of evidence that domestic demand could play a critical role in underwriting economic growth in coming months.

While Japan’s industrial production rose less than expected in March due to tepid demand overseas, economists are confident that exports and factory output will eventually pick up due to a weaker yen.

On the whole, the figures suggest that expectations for Abe’s combination of fiscal spending, monetary stimulus and structural reforms, known as “Abenomics,” are having a positive impact on the household sector although the corporate sector is lagging behind.

“I expect the first quarter gross domestic product growth to exceed an annualized 2 percent, and if the corporate sector catches up with households, the pace of growth could accelerate,” said Yoshiki Shinke, senior economist, Dai-Ichi Life Research Institute.

“Recovery in exports has been slow and so has industrial output, but as a weak yen is expected to impact shipments from now on, exports and factory output will pick up in coming months.”

Abe’s policy mix has so far driven the yen to a four-year low against the dollar and sparked a 50 percent rally in Japanese share prices from November, which has helped buoy consumer sentiment.

Confidence in Japan received another boost on April 4 when the Bank of Japan launched its radical monetary expansion campaign, promising to inject about $1.4 trillion into the economy in less than two years.

Household spending soared 5.2 percent in March from a year earlier in price-adjusted real terms, Ministry of Internal Affairs and Communications showed on Tuesday, as some individual investors cashed in on gains in stocks to increase spending on cars and home repairs.

That blew past the median estimate for a 1.8 percent annual increase and was the fastest gain since a 5.3 percent rise in the year to February 2004.

Such a big increase in spending is unlikely to be sustainable, and there are worries that wages have been slow to improve.

Economists have also warned in the past that the sample size for household spending is small and easily swayed by big ticket purchases.

Still, they expect consumer spending will continue to expand at a more reasonable pace as individual investors cash in on stock gains.

The seasonally adjusted unemployment rate fell to 4.1 percent in March, the lowest since 4.0 percent in November 2008, figures from the Internal Affairs ministry showed. That compared with economists’ median forecast of 4.3 percent,

The jobs-to-applicants ratio was at 0.86, which matched the level seen in August 2008, separate data from the labor ministry showed.

One worrying sign was the slow uptick in industrial production, which rose a less-than-expected 0.2 percent in March, according to data from the Ministry of Economy, Trade and Industry.

Manufacturers surveyed by the ministry expect output to rise 0.8 percent in April and fall 0.3 percent in May, the data showed.

Japanese retail sales fell 0.3 percent in March from a year earlier, according to a separate release from the Ministry of Economy, Trade and Industry.

That was counter to the median estimate for a 0.6 percent annual increase, but economists say the data may not accurately reflect consumption, because it does not include spending on services.

Overall, policymakers will be encouraged by the improving mood among consumers. Data earlier this month showed Japanese consumer confidence rose in March to the highest level in almost six years, an important signal as Abe’s policies rely heavily on expectations for future growth and prices.

Household spending is a crucial leg in reigniting growth, and in this respect Tuesday’s data should come as a relief to BOJ Governor Haruhiko Kuroda as he aims to get the economy to generate 2 percent inflation in roughly two years.

Kuroda wants to raise inflation expectations in order to boost consumer spending and encourage capital consumption, leading to a virtuous circle that pushes consumer prices higher.

(Editing by Shri Navaratnam)

Article source: http://www.nytimes.com/reuters/2013/04/30/business/30reuters-japan-economy.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: JPMorgan Executives Come and Go as Vote Nears

April 30, 2013 by Leave a Comment

Clockwise from top left: James Staley, William Winters, Heidi Miller, Steven Black, Charles Scharf, Barry Zubrow, William Daley, Jay Mandelbaum, Frank Bisignano and Ina Drew.Clockwise from top left: James Staley, William Winters, Heidi Miller, Steven Black, Charles Scharf, Barry Zubrow, William Daley, Jay Mandelbaum, Frank Bisignano and Ina Drew.

10:35 a.m. | Updated

In the depths of the financial crisis, Jamie Dimon, the chief executive of JPMorgan, and his top lieutenants were hailed as “The Survivors” on a Fortune magazine cover. Today, of the 15 executives featured in that article, only three remain — and one of them has been demoted.

The most recent high-level exit at the bank — that of the co-chief operating officer, Frank J. Bisignano, regarded within JPMorgan as something of an operational wizard — has heightened worries about the persistent executive turnover at the bank and raised fresh questions about who is ready to succeed Mr. Dimon one day.

Revolving Door
View all posts


For Mr. Dimon, who is 57, the latest departure comes at a precarious time, just weeks before the results are tallied on a shareholder vote on whether to split the roles of chairman and chief executive. Mr. Dimon currently holds both jobs. With voting now under way, the bank had hoped to keep a low profile, according to people briefed on the matter but not authorized to speak on the record.

In the last four years, Mr. Dimon’s inner circle has been winnowed by the departures of William Winters, Heidi Miller, Steven Black, Charles Scharf, William Daley and Jay Mandelbaum.

And while people close to the chief executive say he is not worried about the executive turnover, others wonder if the many reshufflings at the top point to a larger problem within the bank.

More changes in the executive suites could distract shareholders from the bank’s successes. Earlier this month, JPMorgan reported its 12th consecutive quarterly profit, bolstered by strong revenue from investment banking and mortgage-related businesses. JPMorgan executives are emphasizing the positives of the bank’s businesses in making their case to shareholders.

JPMorgan’s Trading Loss

Of the 15 leaders at JPMorgan profiled in a September 2008 article for Fortune magazine, only three remain with the bank.Of the 15 leaders at JPMorgan profiled in a September 2008 article for Fortune magazine, only three remain with the bank.

Still, the turnover at the top is a reminder of unfinished business at JPMorgan as the bank wrestles with the fallout from a multibillion-dollar trading loss in 2012. A number of agencies, including the Federal Bureau of Investigation, the Securities and Exchange Commission and the Commodity Futures Trading Commission, are investigating the trading losses. The inquiries and the need to improve relations with regulators promise to be a burden for those executives staying on.

The losses, which stemmed from a soured bet on credit derivatives, prompted a number of the recent departures.

Shortly after the losses were announced in May 2012, Ina R. Drew, who headed the unit at the center of the trades, resigned. In January, JPMorgan produced a 129-page internal report that dissected the bad bet and offered a rare window into the factors that led to the risk breakdowns. Losses on the trades have swelled to more than $6 billion.

The trading missteps also ensnared Barry L. Zubrow, who was a chief risk officer at the bank during the time that the chief investment office was making riskier bets. He announced his departure from the bank in October.

The trading debacle, however, explains only part of the executive exodus. In January, James E. Staley, who was the former head of JPMorgan’s investment bank, announced he would leave to join a hedge fund.

Another executive, S. Todd Maclin, ceded his spot on JPMorgan’s management committee and moved to Texas, where he is chairman of the consumer and commercial bank. Within the bank, some executives disagree that Mr. Maclin was demoted, noting that the move to Texas was prompted by the executive. Before the transition, they say, Mr. Maclin groomed a successor and has since agreed to help the bank bolster its Texas business.

Mr. Dimon has struck a positive tone about the turnover, writing in his annual letter to shareholders that the changes are “not as pronounced” as they may appear. He added that the exits did not leave a leadership vacuum, in part because the vacancies were being filled by people who already had experience in the roles they were stepping into.

For example, Matthew E. Zames, who now becomes the bank’s sole chief operating officer, already shared the job with Mr. Bisignano.

Mr. Bisignano, whose departure was announced on Sunday, is leaving JPMorgan to become chief executive of First Data, a payment-processing firm. His is a particularly difficult loss for the bank, according to people briefed on the matter, because he was widely considered to be skilled at tackling thorny problems at a time when the bank has been faulted over weak oversight in places.

The most recent departures put a spotlight on a handful of possible successors to Mr. Dimon, including Mr. Zames. Mr. Dimon lauded Mr. Zames in a statement on Sunday, calling him a “proven business executive” who will “continue to have an important impact on our company.” Mr. Zames joined JPMorgan in 2004 from Credit Suisse.

Another potential executive to succeed Mr. Dimon is Michael J. Cavanagh, who held the chief financial officer post from 2004 to 2010. As part of the management overhaul in the wake of the trading losses, Mr. Cavanagh, like Mr. Zames, gained more power within the bank. He became the co-chief executive of the corporate and investment bank.

Mr. Cavanagh has a long history with JPMorgan’s chief executive. He was head of strategy and planning at Bank One, where he worked closely with Mr. Dimon.

Mr. Dimon appears unfazed by the steady stream of departures. At meetings inside the bank he has lauded the executive team that remains, and although the bank’s succession plans are not known, he has told people close to him that he is confident the bank will be in good hands when he does decide to leave.

JPMorgan shareholders are scheduled to meet on May 21. At that time the company will announce the results of a shareholder proposal calling for the separation of the roles of chairman and chief executive officer.

In recent years, pension funds and other shareholders have pushed companies to split these roles. Wall Street executives have largely scoffed at the idea, saying a powerful lead director is just as effective as a nonexecutive chairman. Goldman Sachs recently reached an agreement with a shareholder group to withdraw a resolution to split its chairman and chief executive jobs.

Such a vote is still advancing at JPMorgan, however, and last year a similar proposal was supported by 40 percent of the shares voted. Last year’s vote happened not long after JPMorgan first disclosed the trading losses to its investors, and in recent interviews, many shareholders said the news was so fresh at the time that it did not play a factor in how they voted.

The trading losses — and Congressional hearings and a Senate investigation that looked into them — are expected to play a much bigger role this time around.

As a result, JPMorgan has been working behind the scenes to avert losing the vote, calling a wide swath of shareholders to encourage them to cast a ballot. Some big shareholders are scheduled to meet with some directors on the bank’s board so they can air any concerns they might have.

Voting to split the roles would send a powerful message to the bank, but could have serious side effects, something shareholders must weigh. If the vote goes against the company and the board decides to split the role, Mr. Dimon might resign rather than see his powers reduced.

JPMorgan is owned by a wide array of shareholders, from big institutions like the Vanguard Group to mom-and-pop investors. Despite the concerns over the trading loss, the firm’s biggest shareholders, including the asset managers BlackRock and Vanguard, have a history of voting with management, suggesting that it is unlikely the proposal to split the top roles will carry the day.

Nonetheless, firms that advise shareholders on how to vote are expected to recommend again that JPMorgan separate the two top posts. While voting has already begun, most shareholders typically vote in the two weeks leading up to the annual meeting. One big JPMorgan shareholder who has yet to vote and is not authorized to speak on the record said he believed the vote would be close.

“There is so much attention on JPM’s situation that shareholders who might previously have voted to keep the roles together will this year think twice about it because there is bound to be increased scrutiny on how everyone votes,” the shareholder said.

A version of this article appeared in print on 04/30/2013, on page B1 of the NewYork edition with the headline: Another Executive Leaves JPMorgan, Raising Questions as Vote Nears.

Article source: http://dealbook.nytimes.com/2013/04/29/another-executive-leaves-jpmorgan-raising-questions-as-vote-nears/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: European Banks Show Signs of Health

April 30, 2013 by Leave a Comment

UBS on Tuesday reported first-quarter earnings that were much stronger than predicted.Arnd Wiegmann/ReutersUBS reported first-quarter earnings on Tuesday that were much stronger than predicted.

11:33 a.m. | Updated
Despite persistent unemployment, malaise and continuing debt problems, one sector in Europe seems to be benefiting: European banks.

After years of painful job cuts and moves to make portfolios less risky, several large European institutions reported strong first-quarter results in recent days, helped by cost-cutting and better performance of major units.

On Tuesday, the Swiss bank UBS and the Lloyds Banking Group of Britain surprised investors by reporting better than expected earnings for the first quarter, sending their shares up.

European lenders certainly continue to confront broad economic challenges like the burden of euro zone debt and pressure from regulators to strengthen their capital reserves. But there have been signs that some of the bigger banks are returning to health.

UBS reported a first-quarter profit of 988 million Swiss francs ($1 billion). Those results were down slightly from 1 billion francs in the period a year earlier, but far exceeded the 412 million francs predicted by analysts surveyed by Bloomberg News.

Sergio P. Ermotti, the chief executive, said in a statement that he was very pleased with the performance. He cautioned that it was “too early to declare victory,” but said the earnings showed the company’s “business model works in practice.”

The British banks Royal Bank of Scotland and HSBC, along with the French bank BNP Paribas, are among those still scheduled to report first-quarter figures in the coming days. But so far, the first-quarter results paint a somewhat encouraging picture of banks that have managed to limit losses from bad loans linked to the credit crisis, while reducing costs and returning to their core banking operations: credit and mortgages for some and wealth management for others.

Some investors caution that the continuing difficulties in the euro zone and weak demand for loans mean that many European banks remain in trouble despite relatively good earnings in the first quarter.

“They are doing their utmost to have a decent banking model and the numbers across the board were very good, but going forward we now have the issue of where the growth is going to come from,” said Florian Esterer, a fund manager at the MainFirst Group in Zurich.

Still, European banks are moving actively to address their problems, including by sharply cutting costs in the face of changing regulations and a sluggish European economy. Deutsche Bank, which reported earnings on Monday, said first-quarter profit rose as cost-cutting offset a decline in revenue from investment banking. Deutsche Bank’s stock also rose rose 4.7 percent in Frankfurt on Tuesday afternoon on the news that it would issue new shares to bolster its capital reserves.

UBS, meanwhile, has been eliminating 10,000 jobs, reducing bonus payments, scaling back its investment banking trading business and focusing more on its successful wealth management operation. Those steps helped the bank’s first-quarter results.

Net new money at its global wealth management business was 23.6 billion francs in the first quarter, compared with 10.9 billion francs in the period a year earlier. Pretax profit at wealth management outside the Americas fell 28 percent, to 664 million francs, while earnings at wealth management in the Americas rose 19 percent, to 251 million francs.

UBS also joined other banks, including its Swiss rival Credit Suisse and Barclays of Britain, in benefiting from higher revenue at its investment banking operation. At Credit Suisse, pretax profit in its investment banking division rose 43 percent, the bank said last week. Barclays, which also reported earnings last Wednesday, said pretax profit for its investment bank rose 11 percent in the quarter.

Analysts say European banks are starting to recover from the fallout from numerous financial scandals that have hurt their reputations.

UBS, for example, has sought to rebuild trust among clients after it uncovered a $2.3 billion trading loss in 2011 connected with the activities of a former trader, Kweku M. Adoboli, who has since been sentenced to seven years in jail. In December, UBS said it would pay $1.5 billion in fines to settle a case related to the manipulation of the London interbank offered rate, or Libor.

Many of the other large European banks have also been ensnared in the rate-rigging scandal. Deutsche Bank has set aside 2.4 billion euros ($3.2 billion) to cover the potential cost of proceedings that include a tax evasion inquiry in Germany and an international investigation into accusations that its employees and those at other investment banks colluded to fix benchmark interest rates.

While financial institutions will continue to address such issues, there is a cautious optimism now about bank performance.

“There are still some headwinds, but banks are pretty much there when it comes to reaching the right level of capital and that is helpful,” said Cormac Leech, an analyst at Liberum Capital. “There is a new appetite for banks among investors. There’s a confidence that wasn’t there two years ago.”

Jack Ewing contributed reporting.

Article source: http://dealbook.nytimes.com/2013/04/30/during-earnings-season-european-banks-show-signs-of-health/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

You’re the Boss Blog: Bill Courtney Offers Leadership Lessons on the Field and in Business

April 30, 2013 by Leave a Comment

Bill Courtney: Lance Murphey for The New York Times Bill Courtney: “The great thing about all of this is that anybody can do it.”

Building the Team

Hiring, firing, and training in a new era.

A couple of weeks ago, I took to Twitter with the following imperative: “If you haven’t seen the film Undefeated, you should asap. @IamCoachBill is a real #leader who draws out the true #character of his players.”

I tweeted this message after watching “Undefeated,” which won the Academy Award for best documentary feature in 2011. The inspirational film takes place in Memphis and follows Bill Courtney and his Manassas Tigers high school football team through their 2009 season. It is a compelling human interest story — a school based in an impoverished part of Tennessee, where the average median income is less than $10,000, more than 70 percent of the homes don’t have a working car, and only 6 percent of the homes have a college graduate.

It is a great sports story about a football team that in the 10 years leading up to 2003 had accumulated a record of 5 wins and 95 losses and just six years later was casting an eye toward its first playoff appearance. Most important for readers of this blog, it is an extraordinary story of leadership.

Coaching football isn’t Mr. Courtney’s only accomplishment. He is a husband – celebrating his 22nd wedding anniversary this December — a father of four, and a successful entrepreneur. He started his lumber company, Classic American Hardwoods, out of his living room in 2001. Today, it employs 120 people and expects sales of approximately $40 million in 2013.

Mr. Courtney responded to my tweet. We exchanged e-mails and then had the chance to chat by phone. Here’s what I learned about his approach to building and leading a team.

Recruiting

In the film, you were shown recruiting folks at school to join the team. How did you approach recruiting?

I was always recruiting. I would be recruiting all day, every day with a smile and a pat on the back for students as they walked by in the school. If you walk in the hallways, recruiting kids, and they’ve already heard from their peers that you love the heck out of your team and help to get the best out of them, word gets around. All it takes is a sincere reaching out.

I also recruited great coaches to be on my staff. It wasn’t just me. I had nine men on my coaching staff, many of which had played big time college football. All of these guys were volunteers, but they bought into the vision of the football team and the vision for what we could do for the kids.

Practicing

What was your philosophy on practicing and training?

Kids at Manassas worked hard. I approached practice as key to our success and ran it like I run my business: coaches for different positions, organized, on time, and on schedule. The point of practice was to take the natural raw ability that we had recruited onto the team, and then teach them to be good at the fundamentals of the game – both general skills and specific positions.

Motivating

How did you get your team to work so hard?

By working hard. I really believe that. If you’re going to build an organization – a sports team, a business, or any organization, you have to figure out how to get the team members to work hard. At Manassas, the kids knew that I was running my own business, and had a family and my own kids at home, but they saw me working hard every day, volunteering at the school to be their coach. The kids on the team knew that I cared about them and worked hard for them, and as a result, they worked hard for me.

Data-driven decisions versus intuition

In the movie, you are shown watching a lot of game film, using data to inform your strategy. Yet, in one game, you made a spur-of-the-moment decision to put a different player, Chavis, in on defense. He was clearly a talented athlete, but he had never played the position before. How do you balance between data-driven decisions and intuition?

We do that every day in business. We’ve got systems, policies and procedures in place to make decisions based on information that we have gathered, but sometimes you have to make decisions that aren’t in the playbook. You go in with one plan, but you better have backup plans and instinct. The truth is, you’re not risking much when you make a decision with instinct, because what was currently happening wasn’t working. It also comes down to knowing the talent on your team. Players win games, not coaches. I knew Chavis, and I knew he would do what I asked him to do, and that he would win the game for us. Talent would prevail.

Doing something meaningful

One of the most moving parts of the film was when you arranged a sponsor for Money, one of the seniors on the team, so that his entire college bill would be paid. How did you think about doing things that would make such a big impact on the lives of these students?

When I first went to Manassas, long before the cameras were there, I went there to coach football. After a year, it became obvious that there was so much more to do than coach. As time wore on, and as the relationships became deeper, we recognized the opportunity to make a positive impact on kids’ lives.

Mr. Courtney stopped coaching at Manassas so he could spend more time with his family and at his company. He applied the same leadership skills to Classic American Hardwoods that he did to football, and his business has thrived. He had started the company after spending four years at another lumber company, where he rose to become executive vice president of sales. He realized, however, that he needed to start his own business.

Why do you think your company was a success?

Honestly, I tell everybody this, the exact same fundamentals that you use to build a football team are the very same things that enable you to have success in business:

  1. Act with character and integrity.
  2. Out-work the competition.
  3. Understand that sometimes you are going to get knocked down and just get back up.
  4. It’s not whether or not you make mistakes – you will – it’s how you handle them.
  5. Surround yourself with like-minded, hard-working people. Experience doesn’t matter. Character and hard work matters.
  6. Treat people well. Give them the help, tools and training that they need. Then get out of their way and let them grow.

Your business success is even more amazing in the context of raising a family of four and coaching the Manassas team at the same time. How were you able to do it all?

I know I’m repeating myself, but I cannot emphasize enough how important hard work is. In 2003, when the company was only two years old, and I started coaching the Manassas team, my schedule looked like this:

5 a.m.: at the office
2:45 p.m.: leave for practice
3-5:30: practice at Manassas
5:30: leave to attend my kids’ practice
6:30-8:30: kids’ practice
9:00: dinner
11:00: go to bed

Do it all again the next day. There’s no silver bullet. It is hard work. The great thing about all of this is that anybody can do it. To achieve success in America, you don’t need to be a Rhodes scholar or have a Harvard degree, great connections, or tons of money. You just have to be willing to work really, really hard. Isn’t that great?

Bryan Burkhart is a founder of H.Bloom. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/04/30/bill-courtney-offers-leadership-lessons-on-the-field-and-in-business/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Remaining South Korean Managers Leave Plant in North

April 30, 2013 by Leave a Comment

The withdrawal of the 43 factory managers meant that the Kaesong Industrial Complex, in the North Korean border town of Kaesong, was emptied out except for seven South Koreans who will remain for a few days to sort out a dispute over unpaid wages.

When that is settled, South Korea is expected to turn off the electricity it supplies to the complex, which until now has been one of the most brightly lighted parts of North Korea, a country shrouded in darkness at night because of a severe lack of fuel.

South Korea had planned to withdraw all 50 of its citizens from Kaesong by 5 p.m. Monday, but a dispute over the payment of some wages and taxes owed North Korea delayed their departure. In the end, 43 factory managers were allowed to cross the border shortly after midnight, while five officials and two communications technicians from the South agreed to stay on to sort out the dispute.

North Korea pulled out all of its 53,000 workers from Kaesong on April 9 in a protest against joint military exercises by the United States and South Korea that it said raised the possibility of war. It also blocked South Korean managers and supply trucks from entering the complex.

But it was not until Friday, when the North rejected a proposal for dialogue, that the South announced a decision to pull all of its 175 managers and officials, who had stayed in Kaesong hoping that the complex would reopen. Of those, 125 crossed the border on Saturday, loading as many finished products as they could carry on the trunks, seats, roofs and hoods of their cars.

The emptying out of the Kaesong complex represents a new low in inter-Korean relations. South Korea cut off all other economic ties with North Korea in 2010, blaming it for the sinking of a warship and the deaths of 46 sailors. North Korea cut off all military and Red Cross hot lines with the South last month, removing all official ties between the Koreas except for the lines of communication between their civil aviation authorities.

The American-South Korean military drills ended Tuesday. But there was no sign that the two Koreas would end their dispute over the Kaesong complex anytime soon.

“Our offer for dialogue still stands,” Unification Minister Ryoo Kihl-jae, South Korea’s point man on the North, said in a speech to government advisers on Tuesday. “But North Korea must abandon its trite behavior. If they act like this, who will invest in the North?”

Even if the Kaesong complex resumed operation, Mr. Ryoo said, it would take a lot of effort by the North to dispel the mistrust it sowed among South Korean and other potential investors by the way it forced the shuttering of the factory park.

Since it began operations in late 2004, the Kaesong industrial park, where South Korea ran factories with low-wage North Korean labor, had served as a symbol of Korean cooperation. But in recent years, as those ties deteriorated and the two Koreas shed other joint projects, the complex stood as the last vestige of the “sunshine policy” the South pursued from 1998 to 2008. That policy was built upon the idea that projects like the Kaesong complex would encourage North Korea to open up and engage more with the outside world.

But the complex, built in “a very carefully constrained environment” that essentially detached it from the rest of North Korea, “has not led to the kind of systematic openings and interactions” that the supporters of the project had hoped for, Kurt Campbell, a former American assistant secretary of state for East Asian and Pacific affairs, said during a conference organized by the Asan Institute for Policy Studies in Seoul on Tuesday.

So far, the Kaesong complex is the biggest casualty in the standoff that developed after North Korea’s nuclear test in February.

North Korea indicated that it was placing military priorities over the $90 million in hard currency its Kaesong workers earned annually at the factory park.

On Saturday, the North said shutting the complex down for good would allow the North Korean military to redeploy more troops, artillery and tanks along the border just north of Seoul, the South Korean capital, “thus opening up the route of advancing to the South.” The building of the Kaesong complex pushed those North Korean troops away from the corridor between Kaesong and Seoul, which had served as the North Korean Army’s main invasion route at the outset of the Korean War in 1950.

Article source: http://www.nytimes.com/2013/05/01/world/asia/remaining-south-korean-managers-leave-north-korean-plant.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

BP’s $4.2 Billion Profit Beats Forecasts

April 30, 2013 by Leave a Comment

LONDON — BP reported first-quarter profit of $4.2 billion on Tuesday, after adjustment for inventory changes and one-off items, handily beating analysts’ forecasts.

Even though profit was 11 percent lower than the same quarter last year, Peter Hutton, an analyst at RBC Capital Markets in London, called the report “a very positive set of results.” Shares in BP rose more than 3 percent in London trading after the earnings announcement.

Mr. Hutton said BP had earned 30 percent more than analysts’ forecasts thanks to start-ups in Angola and Norway and better performance in Trinidad. Mr. Hutton also said costs had been lower than expected.

The chief executive, Robert W. Dudley, said in a statement that “these strong first-quarter results demonstrate the progress BP is making.”

The main disappointment in the quarter was an 18 percent year-on-year fall in production in the United States, probably reflecting the company’s continued struggles to bring back its core deepwater production in the Gulf of Mexico after the blowout disaster of 2010.

BP is a much smaller company than it was before the disaster, which killed 11 people and spilled millions of barrels of oil. Since the start of 2010, BP has sold about $65 billion in assets to pay spill costs and reshape the company. Production in the first quarter, 2.3 million barrels a day, was down about 5 percent compared with the first quarter of 2012 and roughly half the output of ExxonMobil. In 2009, BP’s production was 4 million barrels per day, comparable to Exxon Mobil’s.

The big difference comes from the sale of BP’s 50 percent stake in its Russian affiliate, TNK-BP, to Rosneft for $12.5 billion in cash and $14 billion in shares of Rosneft, which is majority owned by the Russian government. BP’s stake in Rosneft, which rose to 19.75 percent in the transaction, will bring its overall output back over three million barrels per day, the company says.

BP has begun a share buyback worth $8 billion, acquiring shares worth $834 million since Friday, the company said. Mr. Dudley, trying to create a more focused and profitable company, has also trimmed BP’s holdings extensively, even in the Gulf of Mexico.

BP said its production outside Russia would be lower in the second quarter because of maintenance work in the Gulf of Mexico and the North Sea.

BP is drilling extensively in the Gulf of Mexico to bring key properties there to optimal levels. Production has plunged at some of these because of the industrywide moratorium after the oil spill. BP announced this month that it would not go ahead with a second phase of a major Gulf of Mexico field, Mad Dog, because of industry cost inflation.

BP was unable to do the drilling that was needed to maintain production at existing fields like Thunderhorse or to develop new fields like Tiber, which the company found a few months before the blowout. More than any other company, BP is dependent on the Gulf of Mexico for high-margin oil.

BP still faces huge uncertainties over how high the damages from the spill could go. On April 17, a federal judge in New Orleans ended the first phase of a trial to determine, among other matters, whether BP or other parties were grossly negligent in the series of events that led up to the spill. The second phase, focusing on the amount of oil spilled, is to begin in September. What the judge eventually rules could make a difference of tens of billions of dollars in penalties.

In the meantime, the flow of lawsuits continues. BP says it has been among the companies named as defendants in more than 2,200 suits filed in federal and state courts since March 6.

Article source: http://www.nytimes.com/2013/05/01/business/global/bps-4-2-billion-profit-beats-forecasts.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,
« Previous Page
Next Page »