News Archive


India finance minister asks banks to ensure credit flow to industry


NEW DELHI |
Thu Aug 29, 2013 8:46am EDT

NEW DELHI (Reuters) – Indian Finance Minister P. Chidambaram on Thursday asked state-run banks to ensure flow of credit to every sector of industry, indicating the need for funding projects amid an economic slowdown.

The banks have been asked to assist industrial borrowers who were facing difficulties and be sympathetic towards genuine defaulters, Chidambaram told a parliamentary panel attached to the finance ministry.

Economic growth virtually halved in two years to 5 percent in the fiscal year that ended in March — the lowest level in a decade — and most economists surveyed by Reuters in the past week expect 2013/14 to be worse.

(Reporting by Manoj Kumar; Editing by Sunil Nair)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/7JTVkVrVsDs/story01.htm

Jobless claims data points to pickup in job gains in August


WASHINGTON |
Thu Aug 29, 2013 8:40am EDT

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell as expected last week, suggesting a strengthening in job gains in August after a slight pullback the prior month.

Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 331,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had expected first-time applications to fall to 332,000 last week.

A Labor Department analyst said no states had been estimated and there was nothing unusual in the state-level data.

The four-week moving average for new claims, which irons out week-to-week volatility, ticked up 750 to 331,250, still holding at a level economists associate with a strengthening labor market.

Initial claims have not strayed too far from the 330,000 level since mid-July, bolstering expectations of an acceleration in the pace of employment gains in August.

Hiring moderated a bit in July and a pickup this month could cement expectations the Federal Reserve will announce a scaling back of its monthly $85 billion bond-buying program at its September 17-18 policy meeting. It has been making the monthly purchases to hold down interest rates.

The U.S. central bank has said it plans to start tapering the purchases later this year, but would be guided by economic data. July data on home building, industrial production and durable goods orders have missed market expectations, which economists say would only affect the size of cutbacks.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 14,000 to 2.99 million in the week ended August 17.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/MPm1gC1QUTw/story01.htm

Vodafone in talks with Verizon to sell out of U.S. venture


LONDON |
Thu Aug 29, 2013 8:29am EDT

LONDON (Reuters) – Vodafone Group PLC (VOD.L) said it was in talks with Verizon Communications Inc (VZ.N) to sell its prized stake in Verizon Wireless, the number one U.S. mobile carrier, in what would be the third-biggest deal of all time.

Verizon has made no secret of its desire to gain full ownership of a network that is growing at a rapid rate and generating billions of dollars in free cashflow.

But Vodafone’s Chief Executive Vittorio Colao has bided his time, waiting for the optimal moment to sell the 45 percent stake in a deal that would leave the world’s second largest mobile operator with assets in Europe and emerging markets such as India, Turkey and Africa.

Verizon could pay $130 billion, Bloomberg reported late on Thursday, and it is working with several banks to raise $10 billion from each to finance about $60 billion of the deal. An announcement could come as soon as September 2, two sources told the news agency. (link.reuters.com/raz62v)

Reuters reported in April that Verizon had hired advisers for a possible $100 billion bid, an opening gambit that analysts said was too low, putting the value of Vodafone’s holding nearer $120 billion.

The statement from Vodafone on Thursday confirming talks sent its shares up 9 percent to a 12-year high of 207 pence as investors and analysts said a deal could finally be on the cards. Vodafone’s credit default swaps, which measure the cost of insuring against a default on its debts, fell 6 basis points to 70 basis points. Shares in Verizon Communications were up 4.2 percent in pre-market trading in New York.

The two companies also own a cross holding in Vodafone Italy, which could form part of the deal, with Verizon possibly selling its 23 percent back to Vodafone, which has 77 percent, sources told Bloomberg.

Charles Stanley analyst Tom Gidley-Kitchin said it was inevitable that Verizon would make a serious approach at some stage.

“Vodafone doesn’t have to sell, they are quite prepared to wait,” he said. “I don’t think Vittorio Colao is going to be bamboozled into selling at a sub-optimal price, so I think Verizon will understand they will have to pay closer to $130 billion.”

The only MA deals bigger than that were Vodafone’s $203 billion takeover of Germany’ Mannesmann in 1999 and AOL’s $165 billion acquisition of Time Warner the following year.

Vodafone has changed its strategy from being a pure mobile operator, where revenues are under pressure from competition and regulation, to offering combined services such as television and fixed line broadband. To that end it has agreed to buy Kabel Deutschland for 7.7 billion euros.

FULL CONTROL

The stake in Verizon Wireless has become increasingly valuable to Vodafone as its fortunes have waned in its core European markets.

But it has a strategy of wanting full control of its assets, and as the junior partner in Verizon Wireless, it has no control over the timing and level of dividends from the group.

Chief Executive Vittorio Colao said in May he would stake his reputation on selling the stake at the right time and right price and would not bow to pressure to do any deal.

Verizon has been able to use the dividend as a lever to persuade Vodafone to sell. The company paid no dividends from the asset between 2005 and 2011, which at the time was viewed by analysts as trying to pressure Vodafone into doing a deal.

But Verizon Wireless paid out a $7 billion dividend to its parent companies in June, indicating that they were on better terms than at earlier stages in the relationship.

The Wall Street Journal said significant shifts in financial markets, such as rising interest rates as well as changes in the U.S. cellphone business had brought the two sides closer together.

A Verizon spokesman declined to comment on the Bloomberg and Wall Street Journal reports.

Vodafone investors and analysts expect the company, which has $30.6 billion of debt according to Thomson Reuters data, to return a lot of the proceeds of a deal to shareholders, rather than embarking on more MA or paying down borrowing.

“We would expect them to distribute a very large proportion of the proceeds to shareholders,” analyst Gidley-Kitchin said.

A disposal would change the investment case for Vodafone, as the group would be left with a mixture of low growth but cash generative Europe and higher growth but less cash generating emerging markets, he said.

Analysts and investors have previously said that structuring the deal to ensure not too much tax was payable by the seller was a tricky issue that needed ironing out so that more of the proceeds would be available to shareholders.

“The tax leakage being rumored is $10 billion, which I think would be a good result for Vodafone holders,” one of the 10 largest investors in the UK-listed telecoms company told Reuters.

(Reporting by Avik Das and Sakthi Prasad in Bangalore, and Paul Sandle and Sinead Cruise in London; Editing by Edwina Gibbs and Will Waterman)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/el8C31v8gjY/story01.htm

EU’s Rehn sees European recovery strengthening in 2014


ALPBACH, Austria |
Thu Aug 29, 2013 8:24am EDT

ALPBACH, Austria (Reuters) – The fragile European economic recovery seen in the second quarter should continue into next year and become more solid, the European Commission’s top economics official told Reuters on Thursday.

Olli Rehn said greater fiscal credibility in euro zone countries, action by the European Central Bank to stabilize markets and better economic governance had all strengthened the currency bloc’s ability to withstand political shocks.

“The euro zone is less sensitive to political turbulence,” Rehn said in an interview, contrasting its current state with its previous greater vulnerability to derailment by such upsets as Italian and Greek political turmoil or the Cyprus debt crisis.

“The recent both hard data and soft indicators on consumer confidence and purchasing managers’ expectations are supportive of a subdued sort of recovery this year and a somewhat more solid recovery next year,” he said.

“Not brilliant, but nevertheless a more solid recovery. And we should see next year also more improvement in employment,” Rehn said on the fringes of an economic conference in the Alpine village of Alpbach, Austria.

Rehn had told reporters earlier there were signs of a gradual recovery in the euro zone but it was premature to say the crisis was over.

He added that Greece was making good progress but a decision on whether Athens may need a third bailout could not be made until the so-called troika of its international creditors completed an assessment in late September and early October.

“Its economic reforms are moving forward better than in the first two years of the reform program because there is now broader – not full, but broader – consensus in Greek society for reform,” he said.

German Finance Minister Wolfgang Schauble said earlier this month that Greece would need a third bailout, a statement that prompted an outpouring of officials saying nothing was planned yet.

(Additional reporting by Angelika Gruber Editing by Jeremy Gaunt)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/NndTnGQ6i78/story01.htm

Spain’s recession longer than thought, but close to ending


MADRID |
Thu Aug 29, 2013 8:15am EDT

MADRID (Reuters) – Spain’s economy looks on the verge of exiting recession, though data showed the slump will have lasted three months longer than previously thought.

Gross domestic product contracted 0.1 percent in the second quarter from a quarter earlier, the National Statistics Institute (INE) said, in line with forecasts and a preliminary reading.

But in the third and fourth quarters it should stabilize or grow by up to 0.2 percent, Economy Secretary Fernando Jimenez Latorre said following the data, enabling it to meet an official end-of-year target of a 1.3 percent contraction.

“We believe there’s been an important turnaround in the economic cycle and that the bases are there to continue this new trend and this will show growth, finally ending the long and deep recession,” Latorre said.

Spanish exports are recovering but domestic demand has remained weak, contributing to a slowing of consumer inflation, which separate data showed hit a four-month low of 1.5 percent in August.

The 0.1 percent drop in output was the smallest since the second quarter of 2011 when the economy started to contract.

INE revised its quarterly growth data back to the beginning of 2009. The earlier figures had pegged the beginning of the slump to the third quarter of 2011.

Spain has been in and out of recession since a decade-long property bubble burst in 2008 and, with unemployment at around 27 percent, is expected to remain in an economic slump for at least another year.

Although better-than-expected growth figures from its European neighbors, including Germany, Britain and France, which alone account for over a third of Spain’s total exports, could help it emerge from recession before the end of the year, recovery is expected to be gradual.

“Much of what we’re seeing in the first and second quarters has been distorted by Easter falling in March this year after April last year. We can see that Spain is slowly on the mend, but it’s going to take years and recovery will be very sluggish,” said economist at Jefferies David Owen.

On an annual basis, second quarter GDP shrank 1.6 percent after a drop of 2 percent January to March, INE said, better than a Reuters forecast and preliminary reading of a 1.7 percent contraction.

(Additional reporting by Manuel Ruiz; Editing by Julien Toyer, John Stonestreet)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/LJrBzqJSkzo/story01.htm

Exclusive: India might buy gold from citizens to ease rupee crisis


MUMBAI |
Thu Aug 29, 2013 8:05am EDT

MUMBAI (Reuters) – India is considering a radical plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and take some heat off the plunging currency.

A pilot project will be launched soon, a source familiar with the Reserve Bank of India (RBI) plans told Reuters. India has the world’s third-largest current account deficit, which is approaching nearly $90 billion, driven in a large part by appetite for gold imports in the world’s biggest consumer of the metal.

With 31,000 tonnes of commercially available gold in the country – worth $1.4 trillion at current prices – diverting even a fraction of that to refiners would sate domestic demand for the metal. India imported 860 tonnes of gold in 2012.

“We will start a pilot project among some banks where we will allow them to buy back gold from individual households,” the source, an official familiar with the central bank’s gold policymaking, said. “This will start soon, we have discussed (it) with banks.”

The RBI will ask the banks to buy back jewelry, bars and coins for rupees. Lenders will have to offer better rates than pawn shops and jewelers to lure sellers.

Any talk of using the country’s gold to help meet India’s international obligations revives memories of a 1991 balance of payments crisis – when India flew 67 tonnes of gold to Europe as collateral for a loan to avoid a sovereign debt default.

Earlier on Thursday, India’s Trade Minister Anand Sharma said the central bank should look into the possibility of monetizing gold holdings.

It was not immediately clear whether Sharma was referring to the 557.7 tonnes of gold the RBI holds in its own reserves, or gold in private hands. He did not give more details of how the proposal would work.

“I have not said there should be any mortgaging of the gold, or auction of the gold, that is incorrect. I have just said the RBI should look into … how they can benefit the people, particularly with regard to the bonds or the monetization,” Sharma said in response to a question in parliament.

Earlier this week in comments reported in the national media, Sharma said “even if 500 tonnes is monetized at today’s value it takes care of your CAD”, or current account deficit.

Selling gold reserves may sit badly with Indians, many of whom saw the 1991 sale as a public humiliation. The secret operation was only exposed after a vehicle carrying the first consignment of bullion broke down on its way to the airport from the central bank.

“It (pledging gold) will be a desperate measure, and it will send a very wrong signal to the entire country because all the time we’ve maintained that things are under control even though things are adverse,” said Madan Sabnavis, chief economist at CARE Ratings in Mumbai.

Such a sale would also dent international gold prices which took a hit earlier this year after Cyprus said it was considering selling its gold reserves to shore up its finances.

India has taken multiple steps this year to curb imports of gold, its second-biggest import after oil, including raising duty three times to 10 percent.

The rupee, the worst-performing emerging market currency in Asia this year, rebounded from a record low on Thursday after the RBI said it will provide dollars directly to state oil companies to shore up the currency.

In comments published by The Hindu newspaper last week, David Gornall, chairman of the London Bullion Market Association, said India could raise $23 billion by swapping gold for a payable currency for a period of its choice, while remaining the long-term holder of the gold.

Gold forms an essential part of a bride’s dowry in India and is considered auspicious as a gift or offering at religious festivals.

(Additional reporting by Siddesh Mayenkar in Mumbai, Rajesh Kumar Singh, Frank Jack Daniel in New Delhi; Writing by A. Ananthalakshmi; Editing by Amran Abocar and Neil Fullick)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/Qem8I_lICcI/story01.htm

U.S. foreclosures fall in July from year ago: CoreLogic


NEW YORK |
Thu Aug 29, 2013 8:01am EDT

NEW YORK (Reuters) – There were fewer U.S. foreclosures in July than a year ago, while properties in the foreclosure pipeline also fell as the housing market continued to improve, according to data from CoreLogic released on Thursday.

There were 49,000 completed foreclosures last month, down from a 65,000 in July of last year, CoreLogic Inc (CLGX.N) said. There were 53,000 foreclosures in June, down from an originally reported 55,000.

Before the housing market’s downturn in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006. Since the financial crisis began in September 2008, there have been about 4.5 million foreclosures.

Foreclosures are completed when a home is either seized by the lender or sold at auction.

Over the past year and a half, the housing market has recovered its footing as prices and sales increased, and foreclosures slowed.

A recent spike in borrowing costs, however, has slowed new mortgage applications and demand to refinance existing loans. If that persists, it could result in fewer foreclosure resales.

“If demand is a little bit lower, it might slow down a bit the pace of decline in foreclosure inventories,” said Mark Fleming, chief economist for CoreLogic.

“But of all the housing types in demand, stressed assets are a hot commodity and are often bought by cash investors who are less sensitive to mortgage rates.”

There were about 949,000 homes in some stage of foreclosure, down from 1.4 million a year ago. That foreclosure inventory represented 2.4 percent of all mortgaged homes, down from 3.4 percent in July last year.

The five states with the highest foreclosures in the year leading up to July were Florida, California, Michigan, Texas and Georgia, which together accounted for almost half of all foreclosures.

Florida also had the highest percentage of homes sitting in foreclosure, followed by New Jersey, New York, Connecticut and Maine.

(Reporting By Steven C. Johnson. Editing by Andre Grenon)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/SES-C71sN4w/story01.htm

India rupee bounces from record low, PM may address parliament on economy


MUMBAI |
Thu Aug 29, 2013 7:39am EDT

MUMBAI (Reuters) – The Indian rupee rebounded on Thursday from a record low as the central bank’s action to sell dollars to oil companies provided relief for the currency, albeit one seen unlikely to last unless the government acts to shore up a sagging economy.

Policymakers scrambled for solutions to what some economists are now describing as a crisis. These included monetizing the country’s stash of gold and lowering fuel consumption to reduce import demand.

Prime Minister Manmohan Singh told parliament he was likely to make a statement on the economy on Friday when asked by lawmakers what steps were being considered on the rupee.

Singh’s ruling coalition has been under fire to revive an economy growing at its slowest pace in a decade, narrow a record current account deficit, and shore up government finances – a daunting task ahead of general elections due by May.

“I cannot deny that the country is faced with a difficult situation,” Singh said in brief remarks to the upper house of parliament on Thursday.

“I don’t deny there are some domestic factors. There are also some international factors arising out of change in U.S. monetary stance,” he said, while noting rising tensions in Syria could have negative implications for oil prices.

Although India has also been impacted by global trends – mainly fears of Federal Reserve reining in its monetary stimulus and the Syria tensions – few investors believe they are the biggest factors impacting a currency down nearly 19 percent this year.

“It’s a serious crisis of confidence and credibility. We could have managed things better,” said Rahul Bhasin, managing director of Baring Private Equity Partners (India).

In the absence of significant government action so far, the Reserve Bank of India (RBI), the central bank, has become the country’s main line of defense against the currency.

The RBI said late on Wednesday it was providing a special window with immediate effect to sell dollars to Indian Oil Corp Ltd (IOC.NS), Hindustan Petroleum Corp (HPCL.NS), and Bharat Petroleum Corp Ltd (BPCL.NS).

The decision is aimed at removing a major source of dollar demand from the spot market – worth $400 million to $500 million daily – and so reduce downward pressure on the Indian currency.

The rupee rose as high as 66.85 per dollar shortly after the open, up sharply from a record low of 68.85 per dollar on Wednesday when the currency posted its biggest single-day percentage fall since October 1995.

Thursday’s rupee bounce also boosted shares and bonds, underscoring how movements in domestic markets are increasingly being driven by the beleaguered currency.

India’s main NSE share index .NSEI rose as much as 2.1 percent while benchmark 10-year bond yields fell 15 basis points to 8.81 percent.

Sentiment was also helped by a recovery in Asian shares while emerging market currencies stabilized as worries eased that U.S.-led forces would launch an immediate military strike against Syria.

Brazil and Indonesia raised interest rates to stem pressure on their currencies, but similar action is seen as unlikely in India for fear it would undermine an already weak economy.

FUELLING HOPES

Pressure on the government to act is rising as an RBI plan unveiled last month to drain cash from markets has pushed up bond yields, raising borrowing costs.

Meanwhile, surging prices for gold and oil could put more pressure on the current account deficit despite government action to curb India’s two biggest imports.

In the latest suggestion to try to narrow the yawning gap, Indian Trade Minister Anand Sharma said the RBI could monetize its gold reserves to reduce import demand of the precious metal and dollar outflows. He emphasized it was for the central bank to decide.

Oil Minister Veerappa Moily said India was working on measures aimed at lowering fuel consumption. Oil is India’s biggest single import item, so reducing domestic demand could cut imports and so ease pressure on the rupee.

Traders speculated the government might try to raise state-subsidized fuel prices to reduce oil demand.

India raised diesel prices in September, in a decision that cost Singh’s ruling coalition its majority in parliament after partners bolted. The government followed up in January by allowing fuel retailers to gradually raise prices of diesel.

Yet upcoming elections are raising concerns the government will lack the willpower to undertake reforms.

“If the rupee continues to depreciate there would not be any choice,” said Paras Adenwalam, principal portfolio manager at Capital Portfolio Advisors.

“But the question is, with the election around the corner, how much can they hike,” he said. “To change India’s picture, the price hikes have to be very large, and that is not going to happen.”

To the contrary, government action suggests more of a populist bent that could worsen confidence in its fiscal discipline.

Parliament this week passed a 1.35 trillion rupee ($19.81 billion) government plan to provide subsidized grains to the poor, raising concerns about spending.

The Congress Party is next seeking to pass a controversial bill that would compensate farmers for land acquired for infrastructure and industrial projects, but which critics say could end up raising costs for companies.

“I think it’s a horribly volatile situation, I think it just makes life miserable for all of us,” said Rostow Ravanan, chief financial officer at Mindtree Ltd (MINT.NS) about the current corporate environment.

Ravanan added any benefits on overseas trade from a weaker currency for the software service exporter based in Mumbai was offset by the current uncertainty.

“One quarter maybe you’ll get some temporary benefit. But beyond that, our largest cost is people cost, and with the implication of the rupee the way it’s going, inflation will go out of control and obviously salary costs will also go out of control.”

($1=68.14 rupees)

(Additional reporting by Suvashree DeyChoudhury; Editing by Neil Fullick)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/5ZSZSq3MM70/story01.htm

Zurich chairman Ackermann resigns over CFO suicide


ZURICH |
Thu Aug 29, 2013 7:34am EDT

ZURICH (Reuters) – Josef Ackermann, the former Deutsche Bank boss (DBKGn.DE), resigned on Thursday as chairman of Zurich Insurance (ZURN.VX) over the apparent suicide of the Swiss insurer’s chief financial officer.

Ackermann said the family of Pierre Wauthier, who had worked at Europe’s No. 3 insurance group for 17 years, believed he shared some of the blame for his death.

“I have reasons to believe that the family is of the opinion that I should take my share of responsibility, as unfounded as any allegations might be,” he said in a statement on Thursday.

“As a consequence, I see the possibility of a continued successful board leadership to the benefit of Zurich called into question,” he said.

On Tuesday, police said Wauthier – who was found dead at his home in a lakefront suburb of Zug outside Zurich on Monday – appeared to have committed suicide.

His death came soon after the suicide of another top Swiss executive, the head of telecoms firm Swisscom in July.

A spokeswoman did not elaborate on what allegations Ackermann was referring to surrounding Wauthier, who was 53 and leaves a wife and two children.

Wauthier’s death and the apparent suicide of Swisscom (SCMN.VX) boss Carsten Schloter five weeks ago have prompted calls for greater support for boardroom high-fliers.

“Pierre was under a lot of pressure because there was a lot more pressure from above on the share price, this was an open secret,” a former colleague, speaking on condition of anonymity, said. “Wauthier had effectively reached his career ambitions, CFO was his dream.”

Zurich’s chief executive Martin Senn said he was not aware of any dispute that could have driven Wauthier to his death.

“We didn’t spot any conflicts that could or should have led to such a death,” Senn told Swiss TV.

SWISS ADVOCATE

Ackermann’s departure means Zurich loses the leadership of a top European banker who transformed Deutsche Bank during a decade there and then played a role in the European financial crisis as chairman of the Institute of International Finance, the global banking industry’s lobby group.

He was often touted as a possible candidate for top financial jobs in Switzerland, including as head of the Swiss National Bank, before he took the relatively low-key role at Zurich.

Ackermann has survived controversy before, having agreed in 2006 to make a 3.2 million euro payment, without any admission of wrongdoing, to avoid trial in a dispute over golden handshakes to executives at telecoms firm Mannesmann.

Since returning to Switzerland after leaving Deutsche in 2012, Ackermann has become a forceful advocate for the Swiss financial sector. He is one of few senior industry figures to keep his job through the financial crisis.

“Ackermann’s mission when he came was to shake up Zurich, to infuse some a more dynamic mentality into it,” said a person close to Ackermann.

“Yes, insurance isn’t banking but there was still more ‘oomph’ to be wrung out of Zurich, he thought.”

However, Ackermann’s arrival at Zurich failed to steady the ship, since its top ranks have seen considerable change in the last 12 months.

Former general insurance head Mario Greco left in mid 2012 to become head of Italian insurer Generali (GASI.MI). Two weeks ago the head of its life insurance arm, Kevin Hogan, left to become AIG’s (AIG.N) head of consumer insurance.

“When the chairman leaves after you’ve already lost your head of global life, Mario Greco, and then the unexpected loss of Pierre Wauthier as CFO, it will lead to more uncertainty,” Helvea analyst Daniel Bischof said. He rates the stock at buy with a 265 franc target price.

The shares were down 3.0 percent by 1023 GMT at 227.5 francs, but remained above the low that they reached after news of Wauthier’s death on Tuesday.

Zurich’s Vice-Chairman Tom de Swaan will take over as acting chairman. A former ABN Amro banker who has been on the board of Zurich since 2006 and vice-chairman since March 2012, he also served as acting chairman before Ackermann’s arrival last year.

On August 15, Zurich said it would be hard pressed to meet certain performance targets after posting a 27-percent fall in second-quarter net profit due to natural disaster payouts, which topped those of European rivals because of its high exposure to the United States.

(Editing by Louise Ireland and Peter Graff)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/X5C8Z745lFY/story01.htm