European Banks Fall on UK Bailout, UBS Loss

123jump.com Staff
03 Nov, 2009
New York City

Banks were under pressure in the European trading after UBS reported its quarterly loss in a row and UK offered its second bailout to Royal Bank of Scotland and Lloyds Banking Group under tighter conditions. Banks France, Germany, UK and Spain fell. BMW declined after quarterly net plunged 74%.

[R]7:00PM Frankfurt, Paris; 1:00 PM New York – Banks were under pressure in the European trading after UBS reported its quarterly loss in a row and UK offered its second bailout to Royal Bank of Scotland and Lloyds Banking Group under tighter conditions. Banks France, Germany, UK and Spain fell. BMW declined after quarterly net plunged 74%.[/R]

European markets closed lower after banks and resource stocks dragged indexes in the region. UK government offered £31 billion in bailout funds to Royal Bank of Scotland and Lloyds Banking Group under tighter conditions that were laid out by the EU regulators.

In London FTSE 100 Index closed lower 60.00 or 1.18% to 5,044.50, in Paris CAC 40 Index decreased 35.96 or 0.99% to close at 3,603.50, in Frankfurt DAX Index lower 37.77 or 0.70% to close at 5,393.05. In Zurich trading SMI decreased 61.11 or 0.97% to close at 6,230.11.

Weak earnings at BMW and UBS dragged the indexes in auto and banking sector lower. UBS AG reported its fourth quarterly loss in a row. Societe Generale SA and BNP Paribas dropped 4.3% and Credit Agricole SA declined 2.9%.

Gainers & Losers

Beiersdorf AG increased 4.1% to €43.10 after the consumer goods maker said third quarter revenues fell 7% to €1.4 billion from €1.5 billion a year ago. Net profit for the quarter fell 9% to €98 million or €0.43 per diluted share compared to net profit of €108 million or €0.48 per share a year ago.

BMW AG decreased 6.7% to €31.34 an automobile manufacturer said third quarter sales fell 6.3% to €11.8 billion from €12.6 billion a year ago. Net profit for the quarter fell 74% to €78 million or €0.12 per diluted share compared to net profit of €298 million or €0.45 per share a year ago.

Deutsche Telekom AG decreased 0.7% to €9.26.

Endesa SA an energy company said nine months revenues rose 5.9% to €18.5 billion. Net profit for the nine months fell 55% to €3.05 billion compared to net profit of €6.8 billion a year ago.

Escada AG dropped 6.9% to €0.54 and the women''s designer fashion said it called off the sale of its mid-price fashion unit Primera to financial investor Mutares as it discusses the sale with more bidders.

Fresenius Medical Care AG & Co. KGaA added 2.2% to €33.47 after the kidney dialysis company said third quarter sales rose 6.6% to $2.89 billion from $2.71 billion a year ago. Net profit for the quarter rose 9% to $225.3 million or 76 cents per diluted share compared to net profit of $206.3 million or 69 cents per share a year ago.

Metro AG rose 2.4% to €38.42.

UBS AG the Swiss bank said third quarter net loss was Sfr564 million or Sfr0.15 per diluted share compared to net profit of Sfr283 million or Sfr0.09 per share a year ago.

Uzin Utz AG the maker of chemicals for the construction industry closed unchanged at €16.50.

Volkswagen AG dropped 1% to €108.71 after the automaker said third quarter net income plunged 86% to €172 million or 43 cents per diluted share compared to net income of €1.21 billion or €3.02 per share a year ago.

DAX Index Movers

BMW AG led the decliners in the DAX index of5.96% followed by losses in MAN SE of 3.14%, in Infineon Technologies AG of 2.85%, in Diamler AG of 2.63%, Volkswagen AG of 2.59%.

Fresenius SE led gainers in the DAX index with a rise of 6.54% followed by increase in Metro AG of 4.79%, in Beiersdorf AG of 4.35%, in Fresenius Medical Care AG & Co. KGaA of 4.29%, SAP AG of 2.51%.

CAC-40 Index Movers

Dexia SA led the decliners in the CAC-40 index of 3.65% followed by losses in Societe Generale SA of 3.55% in BNP Paribas SA of 3.44%, in Michelin SCA of 2.87%, AXA of 2.60%.

Suez Environnement SA gainers in the CAC-40 index with a rise of 2.04% followed by gainers in Carrefour SA.of 1.88%, EADS NV of 1.55%, in Compagnie de Saint-Gobain SA of 1.27%, in Essilor International of 0.64%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 9 increased, 92 declined and 1 were unchanged.

The Royal Bank of Scotland Group Plc decliners in the FTSE 100 index with a loss of 9.61% followed by losses in Eurasian Natural Resources Corporation Plc of 5.18%, in Fresnillo Plc of 4.94%, in Xstrata Plc of 4.67%, in Lonmin Plc of 3.91%.

Lloyds Banking Group Plc led gainers in the FTSE 100 index with a rise of 3.12% followed by increase in Legal & General Group Plc of 1.17%, in J Sainsbury Plc of 0.83%, in Serco Group Plc of 0.79%, in Next Plc of 0.56%.