Deutsche sees first annual loss

Deutsche Bank says it made an annual loss last year, its first since being restructured after World War II.

The global financial crisis meant Germany's biggest bank made a net loss of 3.9bn euros ($5bn; £3.5bn) in 2008 following a 6.5bn euros profit in 2007.

The fourth quarter saw the biggest deficit, with the bank reporting a net loss of 4.8bn euros.

Deutsche boss Josef Ackermann warned that the banking industry faced a tough future as the global economy worsened.

"We see continuing very difficult conditions for the global economy, posing significant challenges for our clients and for our industry," he said in a statement.

"We are very disappointed at our fourth quarter result, and at the consequent full year net loss in 2008," he added, citing "completely unprecedented" market conditions that exposed weaknesses in its business model.

While still struggling, Deutsche Bank has fared better than its rivals from the credit crunch and has not sought government help.

The bank said it would pay shareholders a divided of 0.5 euro per share, but this is well below the 4.50 euros dividend paid in 2007 .

Shares rattled

Shares in Deutsche Bank fell in Frankfurt trade, down 3% to 20.63 euros, on news of the bank's first loss since it was restructured following World War II.

The bank said compensation and benefits paid to employees had fallen 36% to 2.1bn euros, reflecting lower performance-related pay.

There was no mention of this year's bonuses, but banks have come under pressure from government to limit such payments.

US President Barack Obama has announced a $500,000 limit on executive pay at US firms that need substantial fresh government aid.

Deutsche is one of the first major European banks to report earnings, with Barclays and RBS due to report later this month.

The bank managed to increase its core capital ratio, which cushions banks against financial shocks, from 8.6% of total assets at the end of 2007 to 10.1%.

RBI Reference rate for US dollar and euro

The Reserve Bank of India on Thursday fixed the Reference rate for the US currency at Rs 48.82 per dollar and the single European unit at Rs 62.69 per euro from Rs 48.65 per dollar and Rs 63.46 per euro respectively on Wednesday.

In a press note issued in Mumbai on Thursday by the apex bank, the exchange rates of Great Britain's Pound and Japanese Yen against the Rupee have been given as Rs 70.4790 per pound and Rs 54.57 per 100 yen respectively, based on the Reference rate for US dollar and middle rates of the cross currency quotes at noon.


The Reference rate is based on 12 noon rates of a few select banks in Mumbai and the SDR-Rupee rate will be based on this rate, the release added.

Inflation slips to 5.07 pc; more scope for RBI to cut rates

Falling prices of fruit and vegetables and certain manufactured items pulled down inflation after a gap of two weeks, to 5.07 per cent, raising hopes of a further cut in policy rates by the Reserve Bank.

Inflation, measured by movement in wholesale prices, dropped by 0.57 percentage points for the week ended 24th January from 5.64 per cent a week earlier, mainly on account of softening prices of food items like coffee and khandsari and metal products like iron and aluminium.


Having declined for 10 consecutive weeks, the rate of price rise moved up to 5.60 per cent for the week ended 10th January and inched up further to 5.64 per cent the next week.


When asked by reporters on how he as former Finance Minister views the fall in inflation, P Chidambaram, who is currently Home Minister, said, "Very happily."



Falling inflation after a gap of two weeks, Axis Bank economist Saugata Bhattacharya said, "gives more leeway to the Reserve Bank to go in for further rate cuts. The central bank might slash the repo and reverse repo rates by 50 basis points in the coming days."


Crisil Principal Economist D K Joshi too opined "decline in inflation certainly provides more scope for a further cut in policy rates by the RBI."



The drop in inflation during the reporting week has been mainly on account of fall in prices of vegetables, which dipped by 2.7 per cent. Fruit too became cheaper by 1.2 per cent.


A sharp dip was also visible in metal prices, with basic metals and alloys down 6.1 per cent, iron and steel by 8.3 per cent and non-ferrous metals by 4.8 per cent. The prices of aluminum also declined by 7.9 per cent.


Coffee powder and khandsari became cheaper by one per cent each, while prices of woollen cloth went down by 2 per cent.


However, the important items that became expensive during the week include oil cakes (11 per cent), scented chewing tobacco (8 per cent), rape and mustard oil (4 per cent), baby food (3 per cent) and imported oil and sugar (one per cent each).


In the paper and paper product groups, prices of pulp rose by 18 per cent.


The fuel index too rose by 0.6 per cent on account of higher prices of naphtha (15 per cent) and furnace oil and light diesel oil (two per cent each).


Inflation for the week ended 29th November was revised downwards to 7.86 per cent from 8 per cent in the provisional estimates.

Murthy named Satyam CEO; co gets Rs 600-cr bank sanctions

Taking two important key decisions towards a revival path, Scam-hit Satyam Computer Services has appointed A S Murthy as the CEO and said it has received bank sanction for Rs 600 crore for meeting working capital requirements.

"A S Murty has been appointed as Satyam's Chief Executive Officer with immediate effect," Member of the Board Deepak Parekh said in a statement on Thursday.

Besides, the board on Thursday confirmed receiving bank sanctions for a total sum of Rs 600 crore (USD 130 million) as a planned fund infusion towards working capital requirements.

This funding, along with healthy collections, is expected to help the company tide over its financial challenges.

Satyam also reaffirmed that 9th January salaries (globally) and the fortnightly salary in 9th February (for its US-based associates) have been met from its internal accruals.

"US payroll is run fortnightly for US based associates and has been so since company's inception," he said.

The Board also announced the appointment of Homi Khusrokhan and Partho Datta as Special Advisors to the Board, to assist in Management and Finance areas, respectively.



The Special Advisors, along with Boston Consulting Group, will work pro bono and will assist the newly-named CEO and the Board, in defining priorities and executing them, effectively.

Buffett makes Swiss Re investment

US investment guru Warren Buffett is to inject three billion Swiss francs (£1.8bn; $2.6bn) into the world's second largest reinsurer Swiss Re.

Mr Buffett already owns 3% of Swiss Re, which he bought a year ago.

The news came as the Swiss company warned investors they should expect a net loss of one billion francs for 2008 as funds have been hit by writedowns.

Swiss Re also said that it may consider raising a further two billion francs on the capital markets.

Mr Buffet has made a series of investments as the economic downturn has continued to bite.

Last week motorcycle firm Harley-Davidson secured $300m from the 78-year-old Berkshire Hathaway chief.

"Disappointed"

Towards the end of last year Mr Buffet bought $5bn of shares in US investment bank Goldman Sachs, which needed additional funds to improve its finances.

Swiss Re has had a difficult time recently and reported a surprise third-quarter loss of 304m Swiss francs in November. Analysts had been expecting a profit.

"We are disappointed with our overall results in 2008, but our core business is performing well," said Swiss Re chief Jaques Aigrain.

The company has made losses on contracts sold to protect clients against drops in fixed-income securities.

So far this year, its stock has declined some 40%.

Chairman arrested in Japan 'scam'

Japanese police have arrested the chairman of a Tokyo bedding supplier over an alleged investment scam reportedly worth $1.4bn (£970m).

Kazutsugi Nami, chairman of the now bankrupt L&G, had offered investors 36% annual returns and issued special electronic money termed "Enten".

The 75-year-old businessman had built a cult status among those who invested in his company.

He is reported to have swindled 37,000 investors, but denies any wrongdoing.

Police have confirmed his arrest but not the size of the alleged fraud.

Mr Nami and other L&G executives allegedly collected huge investment funds from clients despite knowing they could not pay the promised investment returns.

He also collected funds by issuing ''Enten'', saying that the quasi-currency could be used at company-sponsored bazaars nationwide and internet markets, according to an investigation reported by Kyodo news agency.

'Enten' fair

Mr Nami has denied any wrongdoing, AFP news agency reports.

"I'm leading 50,000 people. Can they charge a company this big with fraud?" he asked reporters.

Questioned over whether he was sorry for his investors, he was quoted as replying: "No! I have put my life at stake." He was then led away by the police.

Kazutsugi Nami had built up a cult-like following among customers.

Mr Nami wooed his so-called "shareholders", saying he had a "divine decree" to "eliminate poverty from this world", according to lawyers representing victims.

"Enten" was fed into investors' mobile telephones and used to buy items ranging from vegetables to futons, clothes and jewellery.

The name "Enten" is apparently a combination of the Japanese words for the yen currency and paradise.

The NTV network aired footage of an "Enten fair" where participants sang the praises of the investment plan.

L&G was established in 1987, at first selling bedding and health products.

It began its investment scheme, including the issuance of "Enten", in 2001.

The company stopped paying cash dividends in February 2007, and by September of that year had sacked most of its employees, Kyodo reported.

It folded in November 2007 and is now undergoing a court-led bankruptcy process.

US Senate eases 'trade war' bill

The US Senate has voted to soften a controversial "Buy American" clause in an economic recovery package, after warnings it might spark a trade war.

The clause had sought to ensure only US iron, steel and manufactured goods were used in projects funded by the bill.

But senators approved an amendment requiring that provisions in the bill comply with international trade agreements with Canada and the EU.

Earlier President Barack Obama said the US should avoid seeming protectionist.

The BBC's Jonathan Beale in Washington says the climb-down by the US Senate follows warnings from the EU and Canada that the stimulus bill could spark a trade war.

The White House has said it supports giving preference to domestic manufacturers in public works programmes - but only if it does not violate existing trade agreements, our correspondent says.

There will be a sigh of relief from many people at the Senate's move, he adds, but it remains to be seen whether the House of Representatives will back the watered-down version of the bill.

Retaliatory moves

US senators voted overwhelmingly, late on Wednesday, to require the "Buy American" provisions "be applied in a manner consistent with US obligations under international agreements".

However, an amendment put forward by Republican Senator John McCain which would have removed the clause altogether was defeated.

Speaking before a vote on that amendment, Mr McCain warned that if the provisions were passed it would "only be a matter of time before we face an array of similar protectionism from other countries - from 'Buy European' to 'Buy Japanese' and more".

European and Canadian ambassadors to Washington had already warned that the clause could provoke protectionism and trigger retaliatory moves.

The EU had said the clause in the $800bn (£567bn) US economic recovery package would send "the worst possible signal".

A European Commission spokesman said the EU would launch a complaint with the World Trade Organization (WTO) if the clause remained.

Canada's ambassador to the US, Michael Wilson, had also urged the US Congress to drop the provision.