Higher Losses at German Banks; Porsche Loss

Mayank Mehta
25 Nov, 2009
New York City

Banks in Europe were under pressure after the Bundesbank estimated additional losses of as much as

[R]7:00 PM Frankfurt, Paris; 1:00 PM New York – Banks in Europe were under pressure after the Bundesbank estimated additional losses of as much as €90 billion. Christian Dior announces 2009 interim dividend. Porsche plans to repay €11 billion debt after its merger with Volkswagen and reported a full-year loss of €2.52 billion.[/R]

Stocks were volatile in the European trading after the Bundesbank estimated additional loan losses for German banks. Volkswagen reported a full year net loss of €2.52 billion and 3U Holding AG increased 13% after it reported 26% increase in profit for the nine-month period.

In London FTSE 100 Index closed higher 40.85 or 0.77% to 5,364.81, in Paris CAC 40 Index increased 24.54 or 0.65% to close at 3,809.16, in Frankfurt DAX index higher 33.71 or 0.58% to close at 5,803.02. In Zurich trading SMI increased 24.67 or 0.39% to close at 6,422.20.

The Bundesbank reported in its Financial Stability Report that banks may need to write off €90 billion on bad loans. The central bank noted that loan losses may be in the range of €50 billion and €75 billion and losses from securitized products may be between €10 billion and €15 billion.

The central bank also noted that the loan losses have not peaked yet but demand for loans from corporations and consumers is likely to grow as the economy recovers.

Gainers & Losers

3U Holding AG rose 8.8% to €0.74 after the telecommunication company said third quarter revenues fell 19% to €22.41 million from €27.67 million a year ago. Net profit in the quarter was €0.82 million or €0.02 per diluted share compared to net loss of €2.84 million or €0.06 per share million a year ago.

Accor SA the hotels and services added 1.5% to €36.96.

Christian Dior SA advanced 0.9% to €70.14 after the luxury goods and fashion designer said an interim dividend of a gross amount of €0.44 per share will be paid on December 2.

Daimler AG gained 1.6% to €35.99.

Deutsche Bank AG rose 0.7% to €50.35 after the bank was upgraded to “hold” from “sell” at EFG Eurobank Ergasias S.A.

F Marc de Lacharriere (Fimalac) SA climbed 1.7% to €39.38 an international financial services company said full-year sales fell 4.7% to €559.1 million from €586.9 million a year ago. Net profit in the quarter rose 7.8% to €22 million compared to net profit of €20.4 million a year ago.

Munich Re fell 0.9% to €104.60.

Nordex AG gained 1.6% to €11.28 after the wind-turbine maker was upgraded to “hold” from “sell” at Deutsche Bank.

Porsche Automobil Holding SE increased 1.5% to €51.48 after the maker of the 911 sports car declared a large loss on Wednesday, but it said the manufacture of its iconic cars was still profitable. The automaker took a huge write off on its options investment in Porsche.

Q-Cells SE the solar company rose 1.8% to €11.05.

Remy Cointreau SA closed unchanged at €34.30 after the producer and distributor of wines and spirits said first-half revenues fell 0.9% to €361.9 million from €365.2 million a year ago. Net profit in the first-half fell 18% to €39.4 million compared to net profit of €48.3 million a year ago.

Solucom SA declined 1.0% to €14.75 after the management and IT consulting firm said first-half sales rose 1% to €48.3 million from €47.7 million a year ago. Net profit in the first-half fell 33% to €2.0 million compared to net profit of €3.0 million a year ago.

Teles AG the Internet service provider closed unchanged at €1.01.

DAX Index Movers

Volkswagen AG led the decliners in the DAX index of 3.57%, followed by losses in Commerzbank AG of 1.72%, in MAN SE of 1.49%, in BMW AG of 1.12%, Bayer AG of 0.84%.

K+S AG led gainers in the DAX index with a rise of 4.56% followed by increase in Adidas AG of 3.72%, in Deutsche Telekom AG of 1.96%, in Metro AG of 1.62%, BASF SE of 1.45%.

CAC-40 Index Movers

EADS NV led the decliners in the CAC-40 index of 3.80%, followed by losses in Dexia SA of 2.94%, in Cap Gemini SA of 0.95%, in Bouygues SA of 0.65%, Danone SA of 0.61%.

Vivendi SA gainers in the CAC-40 index with a rise of 4.29% followed by gainers in France Telecom S.A. of 2.05%, in Accor SA of 2.00%, in Societe Generale SA of 1.60%, in Sanofi-Aventis of 1.58%.

FTSE 100 Index Movers

Of the stocks in the FTSE 100 index, 69 increased, 31 declined and 2 were unchanged.

Man Group Plc decliners in the FTSE 100 index with a loss of 4.89% followed by losses in Johnson Matthey Plc of 3.90%, in London Stock Exchange Group Plc of 3.84%, in Resolution Limited of 2.54%, in Hammerson Plc of 2.41%.

Compass Group Plc led gainers in the FTSE 100 index with a rise of 6.12% followed by increase in Rentokil Initial Plc of 3.27%, in Lonmin Plc of 3.19%, in Admiral Group Plc of 3.12%, in BHP Billiton Plc of 3.10%.