Business

(Reuters) – Credit Suisse executives spent the weekend reassuring large clients, counterparties and investors about its liquidity and capital position, the Financial Times reported on Sunday.

A spokesman for Credit Suisse declined to comment on the report when contacted by Reuters.

Executives made the calls after spreads Credit Suisse credit default swaps (CDS), which offer protection against a company defaulting, rose sharply on Friday in an indication of investor concerns, the newspaper said.

Credit Suisse five-year credit default swaps (CDS) jumped 6 basis point to close to 247 bps on Friday, the highest level in at least 10 years, S&P Global Market Intelligence data showed.

Credit Suisse CDS began the year at 57 bps.

The Financial Times said that a Credit Suisse executive denied reports that the bank had formally approached investors about potentially raising more capital, insisting that it was trying to avoid such a move with its share price at record lows and higher borrowing costs due to rating downgrades.

The Swiss bank’s chief executive Ulrich Koerner told staff in a memo seen by Reuters on Friday that it has solid capital and liquidity.

The bank also said last month it was pressing ahead with a review that includes potential divestitures and asset sales.

(Reporting by Mrinmay Dey in Bengaluru; additional reporting by Karin Strohecker and Elisa Martinuzzi in London; Editing by Nick Macfie and Alexander Smith)

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-Tesla Inc on Sunday announced its third-quarter electric vehicle deliveries were lower than expected, citing logistics challenges.

Tesla delivered 343,830 electric vehicles, while analysts on average had expected 359,162, according to Refinitiv. A year earlier Tesla delivered 241,300 units.

The latest deliveries fell far short of Tesla’s production of 365,923 vehicles, which is rare for the automaker which has seen its deliveries higher or similar to production in many of recent quarters.

“Historically, our delivery volumes have skewed towards the end of each quarter due to regional batch building of cars,” Tesla said in a statement. “As our production volumes continue to grow, it is becoming increasingly challenging to secure vehicle transportation capacity and at a reasonable cost during these peak logistics weeks.”

The world’s most valuable automaker also upgraded production lines at Shanghai after a resurgence in COVID-19 cases forced a suspension at the plant and fueled the first dip in deliveries after a nearly two-year-long record run.

However, the scheduled upgrade, along with disruptions at its suppliers’ factories hurt most production in July.

Tesla said it delivered 325,158 Model 3 compact cars and Model Y sport-utility vehicle, as well as 18,672 of its Model S and Model X premium vehicles to customers during the quarter.

(Reporting by Savyata Mishra and Mrinmay Dey in Bengaluru, Hyunjoo Jin in San Francisco; Editing by Sriraj Kalluvila and Lisa Shumaker)

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MOSCOW (Reuters) – Russia’s Rusal said on Friday that speculation the aluminium producer was planning to offload metal into London Metal Exchange (LME) registered warehouses was misleading.

The LME, the world’s oldest and largest market for trading industrial metals, said on Thursday it was considering a consultation on whether Russian aluminium, nickel and copper should continue to be traded and stored in its system.

Rusal, the world’s largest producer of aluminium outside China, has not been directly targeted by the Western sanctions imposed on Moscow after it sent thousands of troops to Ukraine on Feb. 24.

But some market sources have said they were concerned that Rusal would not be able to sell its metal used in the transport, packaging and construction industries and would deliver it to LME warehouses instead.

The suggestion “does not correspond to our physical sales, where we continue to service our global customers, including negotiating and planning 2023 offtakes,” Rusal said.

Some buyers have said they are shunning Rusal’s metal, while others are securing price discounts at the same time as the aluminium industry negotiates supply deals for 2023.

The LME said no final decision had been taken on whether to issue a discussion paper to ask for views on Russian metal, but that it was under consideration.

“A discussion paper could also lay out potential options which could be pursued on the basis of market feedback gathered, including the option to take no action,” Chief Executive Matthew Chamberlain said in the statement.

The LME did not detail the options that would be considered in a consultation.

Rusal is expected to account for 6% of global aluminium supplies this year.

Benchmark aluminium jumped 8.5% to $2,305 a tonne on Thursday as the possibility of the LME banning new Russian metal from the list of brands that can be delivered against its contracts triggered a buying frenzy.

It was last down 0.5% at $2,185 a tonne on Friday.

(Reporting by Polina Devitt and Pratima Desai; Editing by Elaine Hardcastle and Emelia Sithole-Matarise)

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PARIS (Reuters) – Societe Generale’s next chief executive, Slawomir Krupa, will be tasked with leading France’s third-biggest listed bank amid risks of a global recession and a crippling European energy crisis.

His name will be put to the annual shareholder meeting in May 2023.

Here are several facts about him:

* Krupa has been with SocGen since 1996, longer than any rival for the job. His latest role, since January 2021, was head of global banking and investor solutions activities.

* Krupa joined SocGen as an inspector and made his way up, with jobs in Europe and the United States. From 2016 to 2021 he headed SocGen’s Americas unit.

* Krupa’s deep knowledge of SocGen’s investment banking operations is seen as a strong asset.

* Krupa is a graduate of the Institut d’Etudes Politiques de Paris, or Sciences Po.

(Reporting by Silvia Aloisi; Editing by Richard Lough)

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By Arathy Somasekhar

HOUSTON (Reuters) – U.S. fuel supplies are “unacceptably” at or near 5-year lows amid hurricane threats and the oil industry must do more to address prices and demand, a Department of Energy spokesperson said on Friday.

The spokesperson was commenting on a report that the chief executive of Exxon Mobil Corp, the largest U.S. oil producer, had warned the Biden Administration against limiting U.S. fuel exports.

Exxon did not immediately reply to a request for comment.

“The nation is facing serious risks from hurricanes and in some parts of the country, oil and gas supply levels are unacceptably at or near 5-year lows,” the Department of Energy spokesperson said in an emailed statement.

“The administration has impressed upon the oil and gas industry that it must do more to ensure fair prices and adequate supply for all Americans, while meeting the needs of our allies,” the spokesperson added.

U.S. Energy Secretary Jennifer Granholm last week said the Biden administration at that time was not considering restrictions on U.S. oil product exports.

(Reporting by Arathy Somasekhar; additional reporting by Sabrina Valle; Editing by Bill Berkrot)

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By Noor Zainab Hussain

(Reuters) -Insurers are bracing for a hit of between $28 billion and $47 billion from Hurricane Ian, in what could be the costliest Florida storm since Hurricane Andrew in 1992, according to U.S. property data and analytics company CoreLogic.

Wind losses for residential and commercial properties in Florida are expected to be between $22 billion and $32 billion, while insured storm surge losses are expected to be an additional $6 billion to $15 billion, according to CoreLogic.

“This is the costliest Florida storm since Hurricane Andrew made landfall in 1992 and a record number of homes and properties were lost,” said Tom Larsen, associate vice president, hazard & risk management, CoreLogic.

“Hurricane Ian will forever change the real estate industry and city infrastructure. Insurers will go into bankruptcy, homeowners will be forced into delinquency and insurance will become less accessible in regions like Florida,” he said.

More than two million homes and businesses were without power in Florida early on Friday, as Hurricane Ian barreled toward South Carolina leaving behind widespread damage in the Sunshine State.

The insurance industry also expects tourism sector losses in Florida.

“There has been a lot of reported damages to resort properties, hotels. It’s likely there’s going to be a period where the infrastructure just can’t absorb people coming in,” Robert O’Brien, managing director with broker Marsh’s U.S. property claims practice, said.

Credit rating agency Fitch on Thursday said insured losses could range from $25 billion to $40 billion for Florida, which could increase depending on the effect of the storm in the Carolinas.

That compares with $65 billion loss from Hurricane Katrina in 2005 and $36 billion loss from Hurricane Ida in 2021.

Recovery is expected to be slow and difficult due to inflation, high interest rates, and labor and materials costs.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Anil D’Silva)

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PARIS (Reuters) -French bank Societe Generale said on Friday its board had picked Slawomir Krupa, who currently runs its investment banking business, as its new group chief executive.

Krupa’s appointment will be proposed at the next shareholder meeting in May 2023, the bank said in a statement.

The board’s choice was unanimous, it said, adding the European Central Bank had been kept informed throughout the selection process.

“He has perfect knowledge of our bank, as well as the challenges that await him; he has demonstrated his ability to lead Societe Generale, a major European bank,” the bank’s chairman, Lorenzo Bini Smaghi, was cited as saying in the statement.

“His first mission will be to finalise the vast transformations in progress, such as the merger of the French networks, the acquisition of LeasePlan by ALD, the expansion of Boursorama, and the continued development of the corporate and investment bank, recentred on its core businesses.”

(Reporting by Sudip Kar-Gupta and Silvia Aloisi,Editing by Tassilo Hummel)

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By Pete Schroeder

WASHINGTON (Reuters) – Federal Reserve Governor Michelle Bowman said Friday that averaging bank stress test results over several years could reduce volatility in bank capital requirements, as part of a broader speech defending a lighter regulatory approach to the industry.

Bowman, a Republican, argued that any efforts to further adjust rules for banks must be deliberate and not reflexively tougher, and suggested she could serve as a counterweight to Fed Vice Chair for Supervision Michael Barr, a Democrat recently sworn in as the Fed’s top regulatory official.

“Calibrating capital requirements is not a zero-sum game, where more capital is necessarily always better. Regulation is not cost-free,” Bowman said at an industry conference, according to prepared remarks.

Barr said in a speech earlier this month the Fed was conducting a “holistic” review of bank capital requirements, and was considering imposing tougher rules on large regional firms.

While Barr is driving the Fed’s regulatory agenda, the Fed historically has preferred to operate by consensus, suggesting Bowman could have a voice in any policy changes.

She defended the rule simplification that occurred under Barr’s predecessor, Randal Quarles, arguing strong bank performance during the pandemic proved firms were sufficiently robust.

“That record of success is a testament to the progress we have made to date and argues for the same incremental approach to ongoing refinements in supervision and regulation,” she said.

Bowman cautioned against any overhaul of bank merger policy that assumes “increased bank size is inherently problematic.” She also suggested banks could play a “stabilizing role” as intermediaries for clients interested in cryptocurrency and other digital assets.

(Reporting by Pete Schroeder; Editing by Chizu Nomiyama)

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(Reuters) -Marlboro maker Altria Group Inc said it had exercised the option to be released from its non-compete deal with Juul Labs Inc, nearly four years after buying a 35% stake in the e-cigarette maker that was then at the zenith of its popularity.

Altria is looking to permanently terminate its non-competition obligations to Juul, give up certain rights including its board designation rights and reduce its voting power, according to a regulatory filing on Friday.

In July, Altria slashed the value of its stake in Juul to $450 million, down from the original value of $12.8 billion, allowing itself the option to be released from the non-compete clause and invest in or engage with any other e-vapor business.

However, it did not seek to be released from the obligations at the time, and said it saw value in its investment rights in Juul.

“The decision to terminate our non-compete maximizes our flexibility to compete in the e-vapor space while maintaining our economic interest in Juul,” Altria said on Friday.

A change in its stance means Altria could go it alone or pursue other vaping product makers. Privately owned Njoy, which has already succeeded with its premarket tobacco product application process, could be a takeover target, a few analysts said.

“It’s more likely that Altria will seek to buy its way back into the e-cigarette category (which represents 7% of U.S. nicotine sales),” Cowen analyst Vivien Azer said.

“This decision … increases the financial and strategic options we can pursue to secure our business and address the impact of the (U.S. Food and Drug Administration’s) now stayed order,” a Juul spokesperson said.

The FDA in June blocked Juul from selling its nicotine products, after a review of data submitted by the company. Juul quickly appealed to temporarily block the order.

(Reporting by Praveen Paramasivam and Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)

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By Arathy Somasekhar

HOUSTON (Reuters) -Oil prices edged lower on Friday but were on track for their first weekly gain in five on Friday, underpinned by the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5.

Brent crude futures for November, which expire on Friday, fell by 20 cents, or 0.2%, to $88.29 a barrel by 10:43 a.m. ET (1543 GMT). The more active December contract was down 31 cents at $86.88.

U.S. West Texas Intermediate (WTI) crude futures fell 4 cents, or 0.9%, to $81.18.

Both contracts rose by more than $1 earlier in the session but dropped on news that OPEC’s oil output rose in September to its highest since 2020, surpassing a pledged hike for the month, according to Reuters survey on Friday.

“There is definitely some profit taking from the gains we saw earlier in the week. $80 is sort of the pivot point these days,” said John Kilduff, partner at Again Capital LLC in New York.

“Increased worries about financial stability in the UK and, and potentially spreading, is undermining the demand outlook once again,” Kilduff added.

While the dollar has dropped from 20-year highs earlier in the week, it rose with early U.S. trading. A stronger greenback makes dollar-denominated oil more expensive for buyers holding other currencies, reducing demand for the commodity.

“Price swings have become the norm as market players juggle worries over the global economy and the prospect of tightening oil supplies,” said Stephen Brennock of oil broker PVM.

Brent and WTI are still set for a weekly gain of around 2%. It would be the first weekly rise since August and follows nine-month lows hit this week.

The market has seen support from the prospect of the Organization of the Petroleum Exporting Countries (OPEC) and its allies considering cutting production quotas by between 500,000 and 1 million barrels per day (bpd) at their Oct. 5 meeting.

“A deteriorating crude demand outlook won’t allow oil to rally until energy traders are confident that OPEC+ will slash output,” senior OANDA analyst Edward Moya said.

Analysts expect a production cut because demand fears linked to a possible global economic slowdown and rising interest rates have weighed on crude prices.

Brent and WTI prices are likely to finish the third quarter with a chunky 23% decline.

“Expect oil prices to receive a supportive kick up the backside next week,” PVM’s Brennock said.

Analysts also expect buying to lift as Russia prepares to annex four Ukrainian regions to Russia on Friday in a move that could force Western nations to strengthen sanctions against Moscow.

(Reporting by Rowena Edwards; additional reporting by Sonali Paul in Melbourne and Emily Chow in Singapore; editing by Jason Neely, Elaine Hardcastle and Marguerita Choy)

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