|Moody's downgrades three big Nordic ban |
|REUTERS STOCKHOLM/OSLO THREE of the Nordic region's biggest banks had their credit ratings cut by Moody's Investor Service on Friday due partly to the eurozone crisis, but the downgrades were relatively mild and showed the banks remain some of the strongest in Europe.
Moody's cited their reliance on market funding, tough competition for retail loans and exposure to the spreading eurozone debt crisis. The downgrades could raise the banks' borrowing costs, although analysts believe they will continue to outperform European rivals thanks to their strong capitalisation and relatively safe loan exposures.
"The outcome was clearly better than expected," Exane BNP Paribas Andreas Hakansson said in a note. "This leaves Swedish banks at a very strong comparable level, with Nordea and SHB probably being some of the very few double AA rated banks. This supports our view that Sweden is attractive." Moody's had warned in February it could cut the ratings of more than 100 European financial firms, but its treatment of the Nordic banks was relatively gentle after more dramatic cuts for Italian and Spanish banks.
|Gazprom switches Shtokman field to LNG production |
|RUSSIA'S Gazprom energy giant said on Friday it was switching its vast Shtokman field to LNG production and seeking new clients in Asia from initial plans to use half of it to pipe supplies to Europe.
The announcement and accompanying hint of Royal Dutch Shell soon joining the deal marked a fundamental shift in strategy for one of Russia's most important energy investments to date.
The enormous Barents Sea field is one of the world's largest and believed to hold enough natural gas to meet the world's entire demand for a year.
But the costs — once estimated at $30 billion by Gazprom — and uncertain demand in economically struggling Europe have repeatedly delayed the project since its was joined by Norway's Statoil and France's Total in 2008.
Europe's gas consumption is now expected to either fall or remain steady while plans to sell the liquefied natural gas (LNG) to US clients have been scuppered by booming North American shale production and fast-falling prices.
|Spain region, Greek exit warnings rattle eurozone |
| PARIS CENTRAL banks and companies not bracing for a possible Greek euro exit would be making a grave error, Belgium's foreign minister said on Friday, rattling markets already alarmed by Spain's deteriorating finances.
Greek elections are due on June 17 and could hasten the country's departure from the currency club should a government intent on ripping up the country's bailout programme result. Polls suggest the outcome is too tight to call.
Greece accounts for little more than two percent of the eurozone economy but could pose a profound contagion threat if it quit the currency area, throwing the spotlight on Portugal, Spain and even Italy.
"There is no organised discussion at the European level along the lines of: what do we do (if Greece leaves)," Belgium's Didier Reynders told the European American Press Club in Paris. "Now, if central banks and companies are not preparing for the scenario, that would be a grave professional error." Spain is in plenty of trouble even disregarding any backwash from Greece.