InvestmentsMay 3 2013

Morning papers: ECB ‘ready’ for more action after rate cut

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ByEleanor Lawrie

The European Central Bank (ECB) cut its main interest rate on Thursday, but opposition from a German official in the bank’s inner sanctum highlighted the constraints to further action, reports the Financial Times.

Facing diminished prospects for an economic recovery in the recession-bound bloc, the ECB cut its main refinancing rate by a quarter of a percentage point to 0.5 per cent and Mario Draghi, ECB president, said the bank remained “ready to act if needed”.

RBS sees government stake sale next year as it posts quarterly profits of £826m

Royal Bank of Scotland has reported its best quarterly result in more than a year with a pre-tax profit of £826m and said it expects the government to be able to start selling its stake it the lender by the middle of next year or even earlier, reports The Daily Telegraph.

The profit for the first three months of the year compares to a £1.5bn loss in the same period in 2012 and a £2.2bn loss in the final quarter of last year, largely as a result of a fall in impairments in losses from RBS’s “bad bank”.

Early success for Ukip as new ‘party of opposition’

Ukip began a victorious march across the country over-night as early results from council elections showed a surge for the Eurosceptic party, reports The Times.

After beating the Tories into second place behind Labour at the South Shields by-election, Ukip went on to become the second largest party in Lincolnshire as the Conservatives lost control of the authority.

French leader François Hollande’s woes fan European fears

A new hurdle has popped up in Europe’s race to save itself from economic calamity: French president François Hollande, who built his career on an ability to forge consensus, now finds himself in the unaccustomed position of pleasing no one, reports The Wall Street Journal.

Mr Hollande’s ruling Socialist Party is in revolt. Party heavyweights are urging him to turn up the heat on Germany’s chancellor Angela Merkel and defy her prescription of austerity for resolving the eurozone crisis. The French press last week splashed a Socialist Party draft paper that described Ms. Merkel as “selfish.”

BNP Paribas profit tumbles

BNP Paribas SA reported a plunge in first-quarter net profit, hit by lower investment-banking revenue and new provisions set aside against bad loans in Italy, as the French bank struggles to pull itself out of the mire of the debt crisis, reports the Wall Street Journal.

Europe’s third largest listed bank by assets said on Friday that net profit for the three months ended March 31 fell 45 per cent to €1.58bn ($2.06 billion), from €2.87bn a year earlier, but beat analysts’ forecasts of €1.38bn.