July 12, 2020

Chinese Imports and Exports Soar in January

HONG KONG — January trade data from China on Friday showed a surge in exports and imports from a year earlier — a phenomenon that was largely due to the timing of the Lunar New Year holiday, but that also supported the view that the Chinese economy is firming.

Economic data from China are often severely distorted by the holiday, the highlight of the Chinese calendar, when many factories shut down for a week or more.

The holiday this year takes place in February — the first day of the Lunar New Year is on Sunday — but last year it fell squarely in January, cutting down on the number of working days during that month.

The trade data released Friday reflected this with a large increase compared with the year before, as analysts had expected. Exports climbed 25 percent from January 2012, according to the General Administration of Customs, and imports soared 28.8 percent.

Both figures beating expectations by a wide margin, however, supported the view that the rise was also caused in part by healthier domestic and overseas demand.

“This strong export number cannot be fully explained by the Chinese New Year effect alone,” Zhiwei Zhang, chief China economist at Nomura in Hong Kong, said in a research note.

“These data suggest that external and domestic demand are both strong, which supports our view that the economy is on track for a cyclical recovery” in the first half of this year, he added.

Dariusz Kowalcyk, an economist at Crédit Agricole in Hong Kong, said “we need to wait for February results to have the full picture of trade at the start of 2013.”

However, he added, “one trend is clear: exports have been doing very well recently. This may be a sign of improved external demand, but is also a testimony to the resilience of Chinese exporters and to their competitiveness.”

The Chinese economy has been accelerating gradually in the past few months, reversing a marked slowdown that had raised fears of a possible “hard landing” in China early last year.

Improved overseas demand, combined with a string of government-mandated stimulus measures, have gradually propped up growth and dispelled those fears.

Data released last month showed the Chinese economy expanded just 7.8 percent last year — down from 9.3 percent in 2011 and 10.4 percent in 2010 — but many analysts expect slightly faster growth again in 2013.

Article source: http://www.nytimes.com/2013/02/09/business/global/chinese-imports-and-exports-soar-in-january.html?partner=rss&emc=rss

DealBook: Anglo American Takes $4 Billion Charge on Mining Deal

LONDON – Anglo American took a $4 billion charge on Tuesday on an iron ore project bought at the top of the market.

The company said it would take a post-tax charge on its Minas-Rio iron ore project in Brazil because production costs at the site had skyrocketed.

A rival, Rio Tinto, announced a $14 billion charge this month against some aluminum and coal mining assets for similar reasons. Rio Tinto’s chief executive, Tom Albanese, resigned on the same day.

The charges show how mining companies are facing up to increasing costs for labor and infrastructure that started to weigh on the profitability of assets acquired during the takeover frenzy about five years ago. Rising commodity prices, spurred largely by a construction boom in China and other emerging economies, had tempted mining executives to pay ever larger sums for production sites.

“Over the past 12 months there was a shift from aggressive growth to capital efficiency,” said Sam Catalano, an analyst at Nomura. He added that there could be more write-downs to come as mining industry executives adopted a more conservative approach and reviewed the value of past acquisitions.

Shares of Anglo American rose 2.3 percent in London on Tuesday.

Like Rio Tinto, Anglo American appointed a new chief executive this year. Mark Cutifani, the chief executive of AngloGold Ashanti, will succeed Cynthia Carroll in April. Mr. Cutifani is expected to focus on streamlining operations and returning money to shareholders.

Ms. Carroll, who announced her resignation in October, led the initiative to acquire Minas-Rio from the Brazilian billionaire Eike Batista for about $5.15 billion in cash between 2007 and 2008. The deal was supposed to help Anglo catch up with rivals and give it a significant share of the iron ore market. But costs to develop the project have been climbing ever since, turning the asset into a major headache for management.

Total capital expenditure for Minas-Rio is now expected to reach $8.8 billion instead of the $2.6 billion the company had initially expected, Anglo American said on Tuesday. The company had to increase the spending estimate several times before – once when the discovery of caves at the site needed special geological expertise – and there were delays in obtaining some permits. Anglo American said the most recent cost increase related to gaining access to additional land, more expensive license conditions and a one-year delay in shipping the first ore from the new site.

“We are clearly disappointed that the diversity of challenges that our Minas-Rio project has faced has contributed to a significant increase in capital expenditure,” leading to the charge, Ms. Carroll said in a statement.

Anglo American had warned investors about spiraling costs at the site two months ago. But even though the charge on Minas-Rio was expected, it is “still a big number,” Ben Davis, an analyst at Liberum Capital, wrote in a note to clients.

Anglo American will book the charge as part of its 2012 full-year results, which it is scheduled to announce next month.

Article source: http://dealbook.nytimes.com/2013/01/29/anglo-american-takes-4-billion-charge-on-mining-deal/?partner=rss&emc=rss

Spain Recession Deepened in 4th Quarter

The Bank of Spain said gross domestic product (GDP) contracted 0.6 percent in the fourth quarter from the third, compared to a drop of 0.3 percent in the July to September period.

The forecast in the central bank’s monthly economic report precedes preliminary growth data from the National Statistics Institute on January 30.

“These numbers are slightly better than we thought, but it is a confirmation the economy is in a very bad state,” said Silvio Peruzzo, economist at Nomura.

“We expect a contraction of GDP of similar size in the first quarter of this year, with that to be protracted through this year.”

Spain’s economy fell into its second recession since 2009 at the end of 2011 on fallout from a burst property bubble and is struggling to return to growth amid efforts to cut high public and private debt and dire consumer sentiment.

A recent return by international investors to Spain’s battered debt market, where risk premiums have fallen significantly from euro-era highs hit over the last year, has not translated into the real economy, the central bank said.

“Despite positive developments in the international financial markets in the last few months of the year, a combination of a factors … meant a notable weakening of final demand in the fourth quarter,” the bank said.

While the government expects the economy to expand again before the end of 2013, many economists say this is optimistic.

GDP shrank 1.3 percent in 2012 year-on-year, the Bank of Spain said, better than an official forecast of a 1.5 percent drop and after growing 0.4 percent a year earlier.

The economy contracted 1.7 percent in the fourth quarter from a year earlier, the central bank said, after falling 1.6 percent year-on-year in the third quarter.

(Reporting By Paul Day; Editing by Sonya Dowsett)

Article source: http://www.nytimes.com/reuters/2013/01/23/business/23reuters-spain-growth.html?partner=rss&emc=rss

Influx of Cash in Asia Raises Familiar Worries

Asia’s fast-growing economies have weathered a tough 2012 relatively well, and economists say that unless the U.S. and euro zone economies take a sharp hit in 2013, the region could pick up steam again next year.

But that good news comes with a price tag. Analysts have begun to warn recently that Asia’s relative economic buoyancy could once again attract large amounts of cash, possibly leading to a repeat of what happened two years ago.

Back then, big inflows, mostly from the West, caused many emerging-market currencies to surge and prompted talk of “currency wars” as central bankers scrambled to keep their currencies from rising too fast.

Now, with growth in Asia picking up, and central banks in developed nations stepping up their efforts to oil the wheels of their beleaguered economies, the influx of cash is again starting to have worrying side effects.

Property prices, for example, have risen across much of the region. The South Korean won has climbed more than 5 percent against the U.S. dollar since late August. The Philippine peso has risen about 4 percent, to its highest level since early 2008. The Taiwan dollar, the Thai baht and the Malaysian ringgit also have strengthened.

“We could be heading back towards where we were in 2010,” said Frederic Neumann, regional economist at HSBC in Hong Kong. “Capital is pouring back into emerging Asia.”

Next year, said Rob Subbaraman, chief economist for Asia ex-Japan at Nomura in Hong Kong, “could be a bumper year” for net capital inflows. “The stars are aligned.”

For many parts of the world, a tide of capital would be a blessing. The United States, Europe and Japan have spent much of the last four years trying to reinvigorate their economies by lowering rates and injecting cash into strained financial systems through purchases of financial assets.

More is in store.

Last Wednesday, the U.S. Federal Reserve announced that it would continue to buy large amounts of Treasury securities and mortgage-backed securities until the job market improved.

Likewise, the Japanese central bank may step up its existing asset-buying and lending program at a policy meeting this week, analysts believe.

Over the years, some of that liquidity has seeped into parts of the world where growth is faster and returns are higher. The amounts of money flowing into developing Asia have, at times, been vast. During the rush in late 2009 and 2010, David Carbon, an economist at DBS in Singapore, estimated, the region saw inflows to the tune of $2 billion a day, for example.

Economists at the Japanese bank Nomura estimate that between early 2009 and mid-2011, net capital inflows to Asia, excluding Japan, totaled $783 billion — far more than the $573 billion that came in during the preceding five years.

The renewed inflows in recent months have not been so large. Moreover, not all countries have attracted cash in equal measure. Investors have been wary this year of India’s seeming inability to push through important economic overhauls, for example. That has caused the rupee to sag more than 11 percent since February. China, meanwhile, restricts incoming foreign investments to relatively small amounts.

Elsewhere in the region, however, there are signs of renewed pressure.

An index compiled by Nomura that gauges capital inflow pressures has risen in recent months, said Mr. Subbaraman, the Nomura economist. Although it remains below where it was during the spike in 2010, it is now at its highest since May 2011.

Said Mr. Neumann of HSBC, “currencies have strengthened despite resistant central banks, real estate markets are frothing away, and lending to consumers and companies has accelerated.”

All of that has reignited the concerns that traditionally accompany major — and potentially fickle — capital inflows.

For exporters, stronger currencies are a headache, as they make the exporters’ goods more expensive for consumers elsewhere.

For ordinary citizens, rising property prices make homes increasingly unaffordable. Soaring property prices are also vulnerable to painful reversals if conditions change.

Underscoring that point, the International Monetary Fund warned on Wednesday that a sharp rise in house prices in Hong Kong raised “the risk of an abrupt correction.”

Likewise, a big increase this year in corporate bond issuance — while a positive in that it supports growth and diversifies corporate funding — bears risks.

Article source: http://www.nytimes.com/2012/12/18/business/global/influx-of-cash-in-asia-raises-familiar-worries.html?partner=rss&emc=rss

DealBook: Macy’s to Review Martha Stewart Relationship

Macy’s is raining on Martha Stewart‘s parade.

The retailer said Wednesday that its relationship with Martha Stewart is under review. The decision comes after news that rival J.C. Penney is buying a 16.6 percent stake in Martha Stewart Living Omnimedia.

Ms. Stewart has several exclusive product lines at Macy’s, including cookware and bed linens, and is a star of their ads.

But with the J.C. Penney deal, she has promised products and marketing heft to a major competitor. In a note to clients, Paul Lejuez, an analyst with Nomura, said the new line, to be introduced in February 2013, should help Penney’s take market share from Macy’s, along with Kohl’s and Target.

In a tart statement, Macy’s suggested that the brand had gotten too ubiquitous.

“In light of the proliferation of Martha Stewart-branded product in the marketplace, Macy’s is reviewing the Martha Stewart products sold at Macy’s for potential changes in the future. No decisions have been made at this time,” the statement said. It added that the Martha Stewart products will be available at Macy’s “until further notice.”

Article source: http://feeds.nytimes.com/click.phdo?i=45def2e681cc9c0e6206a7e0303140cb

Banks Aided in Olympus Cover-Up, Report Finds

TOKYO — Top executives at Olympus, the Japanese maker of cameras and medical equipment, devised an elaborate scheme to cover up investment losses involving at least $1.7 billion and should face legal action, a third-party panel said Tuesday in a highly anticipated report that called the company’s management “rotten to the core.”

The panel’s findings appeared to vindicate, to a great extent, the company’s ousted president, Michael C. Woodford, who had made public allegations and called for an inquiry into a series of exorbitant acquisition payments made by the company before his tenure. Mr. Woodford has called for the entire Olympus board to resign and has said he is in talks with shareholders to help install fresh management at the company.

The report also highlights the role played by three former Nomura bankers in arranging the cover-up, as well as alleged failings of Olympus’s auditors, especially KPMG’s Japan affiliate, in exposing fraud at the company. It alleges that several banks, including Société Générale, submitted incomplete financial statements to auditors, in effect aiding the cover-up.

“The management was rotten to the core, and infected those around it,” said the report, more than 200 pages long with appendices.

Still, concerns remain over the true independence of a panel appointed by the Olympus board, as well as just how fully a monthlong investigation could have investigated a complicated program involving numerous overseas funds and financial advisers. The panel cleared the cover-up of alleged links to Japan’s notorious criminal underworld, for example, despite acknowledging that it did not know for sure where some of the money ended up or whether individuals had pocketed money.

The possibility of organized crime involvement in the cover-up had become a critical issue in the investigation, as any proof of mob links could wipe out all shareholder value in the company by causing its shares to be delisted from the Tokyo Stock Exchange. The Japanese police are investigating possible links to organized crime, according to several people close to the inquiry.

Tatsuo Kainaka, the panel’s chairman and a former judge of Japan’s Supreme Court, acknowledged that a forensic accounting by Olympus’s auditors, as well as an investigation by the Japanese and overseas authorities, was needed to bring all facets of the scheme to light.

“We do not know for sure where funds ultimately flowed to and how,” Mr. Kainaka said at a news conference after the report’s release. But the panel “could not find any evidence of a flow of funds to organized crime,” he said.

In a separate statement, the Tokyo Stock Exchange warned that the company could still be delisted if it failed to meet a Dec. 14 deadline to submit its latest financial statement. Olympus shares have already lost half their value in the scandal.

According to the report, Olympus executives plotted with several former investment bankers to hide ¥117 billion in losses made from investments that went sour in Japan’s stock bubble crash in the early 1990s.

The company later used a series of acquisition-related payouts to settle those losses, including an outsize $687 million in fees paid to a now-defunct fund incorporated in the Cayman Islands for Olympus’s takeover of a British medical equipment maker in 2008. Olympus also paid $773 million for three companies in Japan that appeared unrelated to its main business, including a face cream maker, only to quickly write down the bulk of their value.

The report denied speculation that those acquisitions had been made solely to cover up losses. However, Olympus executives saw the purchases as an opportunity to hide irregular transactions, the report said.

The report also alleged that Olympus’s auditors KPMG AZSA and Ernst Young Nippon had not done enough to expose Olympus’s financial maneuvers. In 2009, KPMG AZSA raised serious concerns with the company’s recent acquisitions, the report said, but backed down and gave Olympus’s finances the all-clear when the company insisted that a third-party inquiry had found nothing wrong.

Article source: http://feeds.nytimes.com/click.phdo?i=268859554921b69788eabf2a8da9de12

Banks Build Contingencies for Euro Zone Breakup

But some banks are no longer so sure, especially as the sovereign debt crisis threatened to ensnare Germany itself this week, when investors began to question the nation’s stature as Europe’s main pillar of stability.

On Friday, Standard Poor’s downgraded Belgium’s credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week cautioned that France could lose its AAA rating if the crisis grew. On Thursday, agencies lowered the ratings of Portugal and Hungary to junk.

While European leaders still say there is no need to draw up a Plan B, some of the world’s biggest banks, and their supervisors, are doing just that.

“We cannot be, and are not, complacent on this front,” Andrew Bailey, a regulator at Britain’s Financial Services Authority, said this week. “We must not ignore the prospect of a disorderly departure of some countries from the euro zone,” he said.

Banks including Merrill Lynch, Barclays Capital and Nomura issued a cascade of reports this week examining the likelihood of a breakup of the euro zone. “The euro zone financial crisis has entered a far more dangerous phase,” analysts at Nomura wrote on Friday. Unless the European Central Bank steps in to help where politicians have failed, “a euro breakup now appears probable rather than possible,” the bank said.

Major British financial institutions, like the Royal Bank of Scotland, are drawing up contingency plans in case the unthinkable veers toward reality, bank supervisors said Thursday. United States regulators have been pushing American banks like Citigroup and others to reduce their exposure to the euro zone. In Asia, authorities in Hong Kong have stepped up their monitoring of the international exposure of foreign and local banks in light of the European crisis.

But banks in big euro zone countries that have only recently been infected by the crisis do not seem to be nearly as flustered.

Banks in France and Italy in particular are not creating backup plans, bankers say, for the simple reason that they have concluded it is impossible for the euro to break up. Although banks like BNP Paribas, Société Générale, UniCredit and others recently dumped tens of billions of euros worth of European sovereign debt, the thinking is that there is little reason to do more.

“While in the United States there is clearly a view that Europe can break up, here, we believe Europe must remain as it is,” said one French banker, summing up the thinking at French banks. “So no one is saying, ‘We need a fallback,’ ” said the banker, who was not authorized to speak publicly.

When Intesa Sanpaolo, Italy’s second-largest bank, evaluated different situations in preparation for its 2011-13 strategic plan last March, none were based on the possible breakup of the euro, and “even though the situation has evolved, we haven’t revised our scenario to take that into consideration,” said Andrea Beltratti, chairman of the bank’s management board.

Mr. Beltratti said that banks would be the first bellwether of trouble in the case of growing jitters about the euro, and that Intesa Sanpaolo had been “very careful” from the point of view of liquidity and capital. In late spring, the bank raised its capital by five billion euros, one of the largest increases in Europe.

Mr. Beltratti said that Italy, like the European Union, could adopt a series of policy measures that could keep the breakup of the euro at bay. “I certainly felt more confident a few months ago, but still feel optimistic,” he said.

European leaders this week said they were more determined than ever to keep the single currency alive — especially with major elections looming in France next year and in Germany in 2013. If anything, Mrs. Merkel said she would redouble her efforts to push the union toward greater fiscal and political unity.

Keith Bradsher contributed reporting from Hong Kong, Julia Werdigier from London, David Jolly from Paris and Elisabetta Povoledo from Rome.

Article source: http://www.nytimes.com/2011/11/26/business/global/banks-fear-breakup-of-the-euro-zone.html?partner=rss&emc=rss

French Economy Ground to Halt in 2nd Quarter

PARIS — The French economy ground to a halt in the second quarter, the government reported Friday, posing a challenge to President Nicolas Sarkozy as France grapples with the growing costs of managing Europe’s debt crisis.

The French slowdown comes as growth stalls in a number of other countries across Europe. The continent’s biggest economy, Germany, is also likely to feel the impact as France, its largest trading partner, pulls back on imports.

“What worries us is that the core euro area countries were the ones carrying the growth” for Europe, Jens Sondergaard, a senior European economist at Nomura, which cut its forecast for German growth after the French economy’s poor showing. “And now you suddenly have flat growth in one of them, and that in itself is worrying.”

News that France’s gross domestic product fell unexpectedly to zero from April to June capped a tumultuous week in which Mr. Sarkozy interrupted his vacation to fight concerns that the country might lose its AAA credit rating if it cannot bring down a high debt and deficit.

The government also closed ranks to protect French banks after they slumped on rumors over their health. It imposed a 15-day ban on short-selling starting Friday, and opened an investigation into the market turbulence.

Although the French finance minister, Francois Baroin, pledged Friday that France would cut the budget deficit despite the gloomy growth report, a cooler economy could make it harder. It means the French government might need to resort to even to deeper budget cuts if it is to meet its target of paring its deficit to 5.7 percent this year.

French growth had been on a more positive trajectory — first-quarter growth, although only 0.9 percent, was the economy’s best quarterly showing in five years.

But consumers pulled back on spending in the second quarter, especially after the expiration of a cash-for-clunkers program the government had used to stoke new car sales.

While the government stuck to its optimistic forecast of 2 percent growth for the whole year, French shoppers seem inclined to remain prudent.

“People are anticipating future difficulties, not necessarily because of austerity yet, but because everything from gas to food is expensive,” Thomas Richard, a consultant at Kurt Salmon, said as he passed by a Monoprix grocery store in a leafy suburb of Paris. “They are paying more attention to their spending.”

While few people think France can come under market attack the way Italy and Spain have recently, they acknowledge the country can’t stay immune from the troubles of their euro-zone neighbors.

“The government does a lot, and we must leave time for programs to be put in place,” said a bank teller who would only give her first name, Isabelle. “But France is intertwined with Portugal, Ireland, Greece and even the United States, which have been hit. So we are waiting for a slowdown.”

The French economy is far more dependent on domestic demand than Germany, with its strong export sector. Unemployment in France remains high at 9.2 percent, while joblessness among youth, a particularly sensitive problem, is 22.8 percent.

Mr. Baroin played down the figures Friday, saying slower growth was expected after a faster run in the first quarter. But he acknowledged on French radio that the government would need to reduce the deficit with savings that “won’t hurt the most vulnerable in the economy.”

The International Monetary Fund said in a recent report that it expected France to experience a “robust” recovery over the next two years, despite plans to further consolidate its finances. In a sign things were calming for the moment, the yield on the French 10-year bond fell below 3 percent on Friday, and the spread with German bunds — considered the safest in Europe — shrank to 63.1 percentage points, after spiking at 89 points last week.

But there is a big risk that growth and exports would weaken if the economies of France’s major trading partners did not revive, the I.M.F. said. Any major downturn in the Spanish and Italian economies in particular would post a “significant” problem for French growth, the fund added.

What is more, because France has high public debt, and its banks are significantly exposed to weak southern European countries, the risks to growth would become bigger if the euro crisis is not stemmed, the fund said.

The deficit is expected to fall to 5.7 percent of gross domestic product this year, the I.M.F. said, while the ratio of debt to gross domestic product will be 85.3 percent — a source of concern among investors who have started targeting Spain, Italy and any country with high debt and low growth, no matter what their stature.

Mr. Sarkozy this week instructed his ministers to find ways to cut the deficit and debt, which are the highest of any AAA country. Still, Mr. Sondergaard cautioned against looking too darkly at France’s fiscal position. The ratings agencies reaffirmed France’s AAA rating this week, and the budget situation in France “is considerably better than other countries, not just in the euro area but around the globe,” he said.

Article source: http://www.nytimes.com/2011/08/13/business/global/french-economy-ground-to-halt-in-second-quarter.html?partner=rss&emc=rss

Reports Heighten Concerns About German Economy

FRANKFURT — Underwhelming earnings reports Thursday from several of Germany’s largest companies, along with a report showing a slump in confidence among European business and consumers, raised concerns that growth could be slowing even in the Continent’s strongest economies.

Siemens, the electronics and industrial conglomerate that is a bellwether for German industry, reported that net profit in the three months ending June 30 fell 65 percent to €501 million, or $716 million, worse than expected. The decline was caused partly by charges related to Siemens’s exit from a joint venture with the French nuclear technology company Areva, but also by lower demand for health care equipment and the effects of a strong euro.

Volkswagen, Europe’s largest carmaker, said that profit in the quarter more than tripled to €4.8 billion, in line with expectations, as it sold more cars both in Germany and abroad. However, the company’s preferred shares plunged 5 percent after Martin Winterkorn, the chief executive, warned that Europe’s sovereign debt crisis could hurt sales.

“The coming months will be challenging for us,” Mr. Winterkorn said.

Meanwhile, the European Union’s economic sentiment indicator fell by 2.2 points to 103.2 in the euro area, as both businesspeople and consumers became less optimistic about their prospects. The reading, the lowest in almost a year, indicates that growth is likely to continue, but at a slower pace.

“The slowdown should be temporary,” Lavinia Santovetti, an analyst at Nomura, said in a note. However, “uncertainty remains on the spillover effects from the ongoing sovereign debt crisis onto the economy directly and through confidence indirectly,” she added.

Italy and Spain showed the biggest declines in overall confidence, but a sharp fall in optimism among German exporters could be a bad omen.

A deceleration of German growth would add to the challenges Europe faces in getting the sovereign debt crisis under control.

Germany’s success in exporting cars and machinery to China and other foreign markets has helped drive growth for the Continent and compensate for economic weakness elsewhere, especially in countries like Greece, Spain and Italy that are trying to cope with excessive debt.

“All in all, this survey provides more evidence of the loss of momentum in the euro area economy in the beginning of the third quarter,” analysts at Barclays said in a note.

In another sign that the economic outlook remains tentative, the European Central Bank reported that the increase in demand for business loans slowed, while demand for consumer credit declined.

“Prospects for loan demand remain generally subdued,” the E.C.B. said in a statement Thursday.

Banks are hoarding cash while there is little activity on debt markets, said Dougald Middleton, head of capital and debt advisory at the consulting firm Ernst Young.

“What this means for corporate borrowers is that funding will be more difficult to come by and is increasingly expensive,” he said in a statement. “This will be most acute for smaller borrowers and the peripheral economies inside or outside the euro zone.”

Credit Suisse, the second-largest bank in Switzerland, continued a pattern of weak earnings from big banks this week. Credit Suisse said Thursday that it planned to cut about 2,000 jobs after a “disappointing” second quarter that saw a big drop in earnings in investment banking.

Net income fell more than expected to 768 million Swiss francs, or $958 million, in the three months ended June 30, from 1.6 billion francs in the period a year earlier.

On Tuesday UBS, Switzerland’s largest bank, said it would also have to cut jobs after profit fell by half, also largely because of poor results in investment banking.

Deutsche Bank, Germany’s largest bank, said Tuesday that net profit rose 6 percent, but that was below analyst forecasts.

There was some good news, as German unemployment continued to decline on a seasonally adjusted basis. The jobless rate remained at 7 percent, according to official data.

But hiring could slow if demand for German autos and industrial technology, the two pillars of Europe’s largest economy, begins to slow.

Siemens reported that profit improved in a division that supplies products and services for industry, such as factory automation equipment. But earnings declined sharply in the division that supplies health care equipment like X-ray scanners, as well as the energy division.

Siemens said its renewable energy unit, which had been one of its fastest-growing businesses, was suffering from increased price pressure in the market for wind turbines.

While Volkswagen’s profit met expectations, some analysts expressed concern about a dip in the profit margin on cars carrying the company’s core Volkswagen badge. The company makes a host of other brands including Audi and Skoda.

Growth in China, VW’s largest market, also slowed.

“Although Audi and Skoda still shine,” Christian Aust, an analyst at UniCredit in Munich, said in a note, “the lower gross margin and margin decline at the VW brand raise some questions.”

Julia Werdigier contributed reporting from London.

Article source: http://feeds.nytimes.com/click.phdo?i=dc2a7137a39e50528c07967d03ec6f04