2025-12-01 11:08

VTB will need 1.7 trln roubles in capital in next 5 years VTB expects 500 bln roubles in profit in 2025 VTB expects to pay up to 50% of 2025 net profit in dividends VTB CEO says economy is holding up MOSCOW, Dec 1 (Reuters) - Finding sources of new capital will be the main challenge for Russian banks in 2026 due to the central bank tightening capital requirement rules, the CEO of Russia's second largest lender VTB Andrei Kostin told Reuters. The Russian banking sector, led by VTB and its rival Sberbank, performed relatively well despite Western sanctions during almost four years of the conflict in Ukraine, with banks posting record profits last year. Sign up here. However, as economic growth is set to slow to about 1% in 2025 from 4.3% last year, and with interest rates staying high, the banks' loan portfolio is starting to deteriorate while the central bank is tightening regulation. "We have a number of changes planned by the central bank aimed at strengthening regulation and calculating capital for non-core assets. Further raising of capital will be a challenging task," Kostin said. The central bank is gradually restoring the international Basel rules which it had softened in 2022. It has also been raising capital requirements for "systemically important" banks such as VTB. Kostin estimated that in order to meet the central bank's regulatory requirements VTB alone will need 1.7 trillion roubles ($22 billion) over the next five years. He said the Russian equity market in the absence of Western funds was too shallow for raising capital. Despite the economic downturn, VTB plans to post 500 billion roubles in net profit this year and pay between 25% and 50% of 2025 net profit in dividends. Some critics have lambasted the banks for making hefty profits amid the economic downturn. "This (VTB profits) provokes a mixed reaction in many, even envy among some in the oil industry, although their situation isn't that bad," Kostin said. He added that the bank's retail business was underperforming due to the loss-making home loans segment. Kostin said that he expected the central bank to cut the key interest rate by 50 basis points to 16% at the next board meeting in December and to bring it to 12% or 13% by the end of next year. He said that tax hikes in 2026, in addition to high interest rates, will have a negative impact on economic activity, ultimately leading to lower tax revenues, but the bank did not sense an upcoming crisis. "So far, the economy is holding up; we do not feel a crisis in the real sector," Kostin said. ($1 = 77.6000 roubles) https://www.reuters.com/sustainability/boards-policy-regulation/russian-banks-main-challenge-2026-will-be-raising-capital-vtb-ceo-says-2025-12-01/

2025-12-01 11:04

At least 176 people killed in southern Thailand PM Anutin's popularity down by half, poll shows Government response 'flawed', says Anutin Thailand expected to hold snap polls in March BANGKOK, Dec 1 (Reuters) - Thailand’s Prime Minister Anutin Charnvirakul is facing mounting criticism over his government’s slow response to deadly floods in the south, threatening to derail his party’s ambitions ahead of a snap election. At least 176 people have been killed by some of the heaviest flooding in decades that swept through eight provinces in southern Thailand last month, with most of the fatalities in and around the regional commercial hub of Hat Yai. Sign up here. The disaster, triggered by the heaviest day of rains to hit Hat Yai in three centuries, was the first major test for the 59-year-old power broker who took office in September, after his predecessor was removed by a court order. Voters in flood-hit provinces and analysts are now questioning whether his Bhumjaithai Party can deliver on promises as the country heads toward elections expected in March or April. "This flood has greatly affected the popularity of Anutin and the government because it appears that, in emergencies, Anutin is relatively unsystematic in his management," Sukhum Nuansakul, a political analyst told Reuters. "His popularity has dropped." Floods and landslides across Southeast Asia have killed close to 700 people, most of them in Indonesia, where over 500 people are still missing. POLLS SHOW SUPPORT SLIPPING Speaking to reporters on Monday, Anutin said he wasn't thinking about losing support in the south, adding: "I am only thinking about how to help the people." A poll by Suan Dusit University conducted last week, during the peak of the flooding, found that Anutin's standing had slipped from 48% of respondents backing him down to 23%. "The flooding not only caused damage to the people but also significantly impacted the government's popularity," said the survey, which polled 2,208 respondents, released on Sunday. Three days of heavy downpours, starting on November 19, dumped 630 mm (25 inches) of rain onto Hat Yai and the surrounding area, but the government's response was initially slow, with relief efforts accelerating after the military was put in charge nearly a week later. Another poll by the National Institute of Development Administration released on Sunday, which surveyed 2,000 people in 14 southern provinces before the flooding, showed Anutin stood only third in the list of leading prime ministerial choices, with 15.4% of the support. PRIME MINISTER'S PARTY SOUTHERN OBJECTIVES Anutin's Bhumjaithai Party, which currently holds only 70 seats in the 493-member lower house of parliament, has its stronghold in the country's lower-northeast, but has set its sights on winning at least 30 seats in the southern provinces. The prime minister, as part of a deal with the opposition to take power, has vowed to dissolve parliament by the end of January, with a general election expected to follow in late March. In Hat Yai, Thailand's fifth-largest city, residents said they had not received clear warnings from local authorities as the incessant rains swelled water levels, trapping many inside their homes for days. "There is a tremendous amount of anger," said Kiranee Tammapiban-udom, a voter from Hat Yai who works in the capital Bangkok. "It will very hard for Bhumjaithai to get the 30 seats they are targeting." After a visit to the Hat Yai area, Anutin on Saturday apologised for his government's performance and promised to speed up the recovery process. "The government is flawed, I accept it," he said. "When there is death, when there are losses, when people cannot live in their homes... it is only the prime minister's fault." Bhumjaithai's strength will also depend on how its regional ally, the Klatham Party led by Deputy Prime Minister Thammanat Prompao, performs in the next polls. "Thammanat's visits to the affected areas did not help improve the government's popularity," Sukhum said. "If the government introduces relief and compensation measures that satisfy the people, their popularity may improve somewhat." https://www.reuters.com/business/environment/thailand-floods-hit-pm-anutins-popularity-ahead-snap-polls-2025-12-01/

2025-12-01 10:13

LONDON, Dec 1 (Reuters) - British lenders approved more mortgages than expected in October, despite concerns about finance minister Rachel Reeves' budget, and consumer credit grew at a slower pace than in September, Bank of England data showed on Monday. The BoE said 65,018 mortgages were approved in October, down from 65,647 in September and the lowest since May. Economists polled by Reuters had pointed to 64,200 approvals during the month. Sign up here. Reeves raised taxes in last week's budget with higher levies on expensive homes among the measures announced last week. The BoE's data showed approvals for people looking to re-mortgage fell by the most in October since February. Net mortgage lending - which reflects completed house purchases - fell to a net 4.273 billion pounds compared with a rise of 5.223 billion pounds in September. Simon Gammon, managing partner at Knight Frank Finance, said uncertainty about tax rises and a "steady drip of policy leaks" hit sentiment in the housing market. "That said, the fall in approvals was small. Monthly transaction activity has been broadly in-line with pre-pandemic levels since the summer, which is a display of resilience given the weakening economy and the uncertain fiscal outlook. Aspects of that uncertainty have now passed and the Bank of England looks on course to cut the base rate in December." The BoE's data also showed consumers borrowed at a slower rate ahead of Reeves' tax and spending plan. Net consumer borrowing rose by 1.1 billion pounds ($1.45 billion) in October, less than the 1.35 billion-pound forecast in the Reuters poll of economists. The increase was below September's 1.398 billion pound rise, leaving the annual rate of consumer credit growth unchanged at 7.2%, joint-highest since October 2024. Official data published ahead of the budget showed a drop in retail sales and consumer confidence in October. ($1 = 0.7561 pounds) https://www.reuters.com/world/uk/uk-lenders-approve-more-mortgages-than-expected-october-2025-12-01/

2025-12-01 07:20

BANGKOK, Dec 1 (Reuters) - Thailand's central bank is planning measures to ease the upward pressure on the baht , including having banks tighten their controls on gold-related foreign exchange transactions and requiring major gold traders to supply their transaction data. The baht has strengthened by 7% against the dollar so far this year to be Asia's second-best performing currency. The baht's appreciation is seen as a threat to the competitiveness of the export and tourism sectors. Sign up here. The Bank of Thailand is closely monitoring the baht and will act on any volatility to reduce the impact on businesses, it said in a statement. The BOT said it will propose the Finance Ministry increase the limit for foreign income that does not need to be repatriated to $10 million per transaction, up from the current $1 million per transaction, to take effect this month. The higher limit would provide greater flexibility for the private sector in managing foreign currency and ease the pressure on the baht to rise by reducing the amount of foreign exchange being brought into the country. Earlier on Monday, central bank governor Vitai Ratanakorn said he saw room to cut interest rates, but added such a move had only a limited impact on an economy facing structural problems. The central bank has cut its policy rate four times over the past year, taking it to a three-year low, to support a sluggish economy. Its next policy review is on December 17, and some economists expect a further rate reduction. It unexpectedly left the key rate (THCBIR=ECI) , opens new tab unchanged at 1.50% at its review in October. https://www.reuters.com/sustainability/boards-policy-regulation/thai-central-bank-planning-measures-ease-strong-baht-sees-room-rate-cuts-2025-12-01/

2025-12-01 07:17

European firms look to move supply chains due to export controls 40% of respondents say China is processing export licenses slowly Survey casts doubt on optimism over Trump-Xi summit in Korea, analyst says BEIJING, Dec 1 (Reuters) - China's tightening export controls are pushing European firms to explore new supply chain capacity outside of the world's second-largest economy, a European lobbying group said on Monday, seeking cover from the U.S.-China trade war. The European Union Chamber of Commerce in China said one in three member companies was looking to shift sourcing away from China due to Beijing's export control regime, with 40% of its flash survey's respondents reporting that the commerce ministry is processing export licences more slowly than promised. Sign up here. "China's export controls have increased the uncertainty felt by European businesses operating in the country, with companies facing the risks of production slowdowns or even stoppages," said Jens Eskelund, the chamber's president. The curbs have "added more pressure to a global trade system that was already under a great deal of stress," he added. Some 130 companies participated in the survey, the chamber said, which counts German automakers BMW (BMWG.DE) , opens new tab and Volkswagen (VOWG.DE) , opens new tab, Finnish telecommunications maker Nokia and French oil major TotalEnergies (TTEF.PA) , opens new tab as members. Beijing shocked the U.S. in October when it threatened even tighter controls over rare-earth exports, underscoring China's willingness to flex its muscles to keep Washington pressured in trade talks. The move raised fresh concerns among European companies that their supply chains could again be upended as they had been by similar curbs in April. April's curbs forced some EU automakers to shut down production lines, as Beijing's move to suspend exports of a wide range of rare earths and related magnets - seemingly to squeeze U.S. military contractors and automakers - caused supplies to dry up globally. "These survey results are significant because they paint a picture that runs counter to the post-Busan summit optimism," said Alfredo Montufar-Helu, a managing director at Ankura Consulting. He was referring to a pause in Beijing's new export curbs negotiated at a U.S.-China summit in the South Korean city of Busan. "The reality is that the deal was not signed in ink: Washington and Beijing are still debating the scope of concessions, while the EU is pushing for inclusion. Implementation is taking time, and in that gap, global supply chains are paying the price." Nearly 70% of respondents to the chamber's flash survey said their overseas production facilities depended on Chinese components covered by the export control regime, while 50% of exporting firms reported that their suppliers or customers made goods that were subject to the controls or would be soon. EU firms said that the commerce ministry's licence-application process was taking longer than the promised 45 days, with respondents also taking issue with its lack of transparency and disclosure requirements. They also raised concerns about potential intellectual property theft. The survey also provided redacted examples of firms that were impacted by Beijing's export controls, including one that estimated the measures would lead to costs totalling 20% of its global revenue this year, while another said it expected to incur costs in excess of 250 million euros ($289.8 million). But 56 out of the 131 European firms that answered the survey said the export controls would have no impact, suggesting some sectors remain insulated. https://www.reuters.com/business/autos-transportation/china-export-controls-push-european-firms-move-supply-chains-2025-12-01/

2025-12-01 07:02

BOJ to weigh 'pros and cons' of rate hike in December, Ueda says Rate hike is easing of accelerator, not applying brakes -Ueda Yen, bond yields rise as markets raise bets of December hike BOJ to offer more clarity on distance from neutral rate after hike to 0.75% -Ueda NAGOYA, Dec 1 (Reuters) - The Bank of Japan will consider the "pros and cons" of raising interest rates at its next policy meeting, Governor Kazuo Ueda said on Monday, giving the strongest signal yet of a hike later this month. The yen and bond yields rose after the remarks, which led markets to price in a roughly 80% chance of a rate hike at the December 18-19 meeting - compared with around 60% last week. Sign up here. In a speech to business leaders in the city of Nagoya, Ueda voiced confidence that Japan's economy will rebound from a contraction in the third quarter with the hit from U.S. tariffs proving smaller than initially feared. With tariff impact worries receding, the likelihood of the BOJ's economic and price projections being met is rising, Ueda said, signalling conditions for a hike were falling into place. "The BOJ is at the stage where it should examine whether firms' active wage-setting behaviour will continue," which is key to how soon it will raise the policy rate, Ueda said. Labour shortage is more acute, corporate profit remains high and the main business lobby has called on members to continue raising wages, he said. The BOJ was "actively collecting" data on the wage outlook ahead of its December policy meeting, he added. "We will examine and discuss economic and price developments at home and abroad, as well as market moves ... and consider the pros and cons of raising interest rates," Ueda said. The yen rose 0.4% to a session high of 155.49 per dollar after Ueda's remarks. The yield on the two-year Japanese government bond - the most sensitive to the BOJ's policy rate - rose 2 basis points to 1.01%, its highest since June 2008. "Ueda essentially pre-announced a December hike," said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities. "With a December hike pretty much baked in, standing pat would cause huge market turbulence." NOT APPLYING THE BRAKES The BOJ exited a massive, decade-long stimulus programme last year and raised its policy rate to 0.5% in January on the view inflation was on the cusp of sustainably meeting its 2% target. While the bank has kept the rate steady since, a growing number of board members either proposed a hike, or called for doing so as stubbornly high food prices keep consumer inflation beyond 2% for well over three years. A Reuters poll last month showed a slim majority of economists expect a rate hike in December. All project an increase to 0.75% by March. With real interest rates deeply negative, another hike would still leave borrowing costs low and be tantamount to "easing off the accelerator" rather than "applying the brakes", Ueda said. "Being too late in adjusting the degree of monetary support could cause very high inflation and force us to respond rapidly, which would cause turmoil," Ueda told a news briefing after the speech. Ueda offered no clues on how high the BOJ could eventually raise rates. He said the BOJ will provide more information on how far the rate is from levels deemed neutral to the economy, once it raises the policy rate to 0.75%. The slow pace of hikes has been a factor behind a weakening yen, which has been a headache for government policymakers concerned about higher import costs stoking inflation. Asked about the yen on Monday, Ueda said the weakness is likely to accelerate consumer inflation - a factor to which the BOJ must be vigilant in setting policy. Renewed declines in the yen has raised the prospect of currency intervention, highlighting the administration's concern over the negative impact of the currency's fall. Sources have told Reuters the BOJ is preparing markets for a possible rate hike as soon as December, as worries about sharp yen falls return and political pressure to keep rates low fades. https://www.reuters.com/world/asia-pacific/boj-consider-pros-cons-rate-increase-december-meeting-ueda-says-2025-12-01/