BUSINESS | 05BUSINESS | 03

Bank of Japan

expands monetary

stimulus in bid

to beat crisis

TUESDAY 28 APRIL 2020

BUSINESS

MPHC reports net profit of QR57m in first quarter

Ezdan Holding Group’s OGM ratifies all agenda itemsTHE PENINSULA — DOHA

Ezdan Holding Group held its annual shareholders meeting on Sunday, wherein shareholders ratified all the agenda items, which also included the Chairman of the Board’s opening keynote, followed by the Board of Directors’ report on the company’s activity and its financial position during the year ended December 31, 2019 and the review of the company business outlook for 2020.

The meeting also discussed the report of the external auditors on the company’s Financial Statements for the year ended December 31, 2019, and the financial position and statement for profit or loss statement of the group for the year ended December 31, 2019.

During the meeting, the BOD’s recommendation of no distri-bution of dividends and Group’s Corporate Governance Report for the year 2019 were endorsed. The ratified agenda entailed discussing the auditors’ report on the require-ments of Article (24) of Law of

Corporates’ Governance and Legal Entities Listed in the Main Stock Market, issued pursuant to Qatar Financial Markets Authority Res-olution No. (5)/2016, discharging the liability of the members of the Board of Directors for the financial year ended December 31, 2019.

Moreover, certain policies that were developed pursuant to the requirements of the Cor-porate Governance were rat-ified, which included remuner-ation policy, related party transactions policy, dividends policy, and the policy of nom-inating and electing board members. The meeting also nodded appointing an external auditor for the group for the year 2020 and determining their annual fees.

THE PENINSULA — DOHA

Mesaieed Petrochemical Holding Company (MPHC) has reported a net profit of QR57m for the first quarter of this financial year ended March 31 (Q1 2020), showing a decrease of 83 percent compared to the same period last year.

Total revenues reached QR516m (assuming propor-tionate consolidation), a decrease of 36 percent com-pared to the same period in 2019. The group recorded an earnings per share (EPS) of QR0.005 for the first quarter compared to QR0.026 for the same period last year.

The group’s financial per-formance was impacted by the deteriorating global macroeco-nomic conditions, economic uncertainty, slowing GDP growth and trade conflicts, i n c l u d i n g C O V I D - 1 9

and volatile oil prices, which continue to weigh on the demand for MPHC products, resulting in declining selling prices which declined by 18 percent compared to the same period last year.

Ahmad Saif Al Sulaiti, Chairman of the Board of

Directors at MHPC, said: “In a difficult market, further affected by the unprecedented dual headwinds of COVID-19 and oil price volatility, we remained resilient and continued to implement our five-year business strategy to strengthen MPHC’s market position, while driving cost optimisation and generating improved share-holder value. In this regard, during this quarter, we success-fully implemented planned pre-ventive maintenance shut-downs within the defined budgets, which would ensure our operational excellence prevails.

In response to limit the spread of COVID-19 pandemic, we have established crisis man-agement committees at each operating entity level to ensure safety of employees and business continuity. Our mar-keting partner, is closely

monitoring the situation, as the pandemic situation evolves, and acting prudently to minimise the disruptions to the supply chain. Looking ahead, we are in process of implementing new cost optimisation measures on our operating and capital expenditures more critically, across all the joint ventures, which will ensure our resilience and agility to adjust to the con-tinuously evolving market.”

During the period, the decline in production volumes, amid planned maintenance shutdowns, negatively affected the sales volumes which declined by 22 percent com-pared to the same period last year, to reach 227 thousand MT.

The decline in selling prices and sale volumes, on a combined basis, contributed to a decrease of QR286m in the net profits for the first quarter compared to the same period last year. P3

Total revenues reached QR516m (assuming proportionate consolidation), a decrease of 36 percent compared to the same period in 2019. The group recorded an earnings per share (EPS) of QR0.005 for the first quarter compared to QR0.026 for the same period last year.

COVID-19 impact:

KPMG highlights top

five challenges for

Qatar’s banking sector

02 TUESDAY 28 APRIL 2020BUSINESS

03TUESDAY 28 APRIL 2020 BUSINESS

Berkshire investors will get to quiz Buffett and Abel at annual meetingBLOOMBERG

Berkshire Hathaway Inc's annual meeting, which nor-mally draws thousands to Omaha, Nebraska, will be a slimmed-down affair this year.

Warren Buffett (pictured), chairman and chief executive officer of the conglomerate, and Greg Abel, vice-chairman of non-insurance operations, will be the only directors physically present at the meeting, Berkshire said in a statement yesterday. That means Charlie Munger,

Buffett’s longtime business partner, and Ajit Jain, who’s vice chairman of insurance operations and considered one of Buffett’s potential suc-cessors, alongside Abel, won’t attend.

As the coronavirus pan-demic began to spur public-gathering restrictions and business shutdowns across the US, Buffett said in mid-March that Berkshire would only hold the meeting via a virtual setup this year, an action the bil-lionaire investor said he “very much” regretted. “We will greatly miss seeing our

shareholders in Omaha this year,” Berkshire said yes-terday. Buffett and Abel will field shareholder questions for the meeting on Saturday, May 2, starting at 4:45 p.m. New York time with a webcast on Yahoo. The pair won’t discuss specific investment holdings or politics, Berkshire said. The company plans to announce first-quarter earnings earlier that day, posting results on its website at about 8am.

The changes mark a sig-nificant shift from the event that Buffett’s called a “Wood-stock for Capitalists.”

Berkshire’s annual meeting normally packs a convention center in Omaha full of share-holders, ready to listen to Buffett and Munger opine on a wide array of topics for hours on end.

This year, Abel and Jain, deputies often seen as leading candidates to replace the 89-year-old Buffett once he steps down, were meant to be given more exposure at the meeting, Buffett assured investors in his annual letter, released in February. Now only Abel will be there to answer questions.

Buffett’s vow to not discuss politics is a slight shift from prior years. In 2016, he addressed, albeit carefully, a shareholder question about the potential for a Donald Trump presidency and how that could affect Berkshire. He’s taken a cautious approach to some heated political debates at his meeting in recent years, and said in February that he’d wait and see who gets the Democratic nomination this year.

Berkshire says it plans to virtually maintain another aspect of its annual meeting:

the shopping. Normally, Berk-shire businesses such as Dairy Queen and auto insurer Geico set up booths in the con-vention center to offer products – with some trinkets even featuring the faces of Buffett and Munger. This year, the conglomerate said it would provide a link, starting May 1, to websites for Berkshire sub-sidiaries with product sale dates.

Turkish chambers union provides 6 billion lira loans to small firmsANATOLIA - ISTANBUL

The Union of Chambers and Commodity Exchanges of Turkey (TOBB) yesterday earmarked six billion Turkish liras ($860.5m) to support the country’s small busi-nesses against the economic effects of the novel coronavirus.

Member firms of TOBB with annual turnover below 25 million Turkish liras ($3.6m), will be eli-gible to receive the up to 100,000 Turkish liras ($14,340) as part of the “Breath Credit” package via Turkish private lender Deniz Bank, said TOBB President Rifat Hisarciklioglu (pictured).

The annual interest rate of the loans will be 7.5 percent, with the first of 12 installment payments to start in January 2021, explained Hisarciklioglu, adding that public lenders would join the initiative in two weeks.

He noted that 80 percent of loans would be guaranteed by the country’s Credit Guarantee Fund, as many small enterprises have been closed for weeks and exporters, manufacturers and service providers facing “serious problems.”

Coordinated by the Treasury and Finance Ministry, public lenders promptly began sup-porting Turkish companies since the onset of the pandemic and the

government postponed tax pay-ments and supported employee salaries, said Hisarciklioglu.

TOBB relaunched its Breath Credit package to meet firms’ financing requirements after six previous credit packages pro-vided in difficult times. After orig-inating in China last December, COVID-19 has spread to at least 185 countries and regions. Europe and the US are currently the worst-hit regions.

The virus has affected 110,130 people in Turkey so far, causing 2,805 deaths, while 29,140 patients recovered. The pandemic has killed over 207,000 people worldwide, with total infections approaching 2.99 million and more than 875,000 recovering, according to figures compiled by the US-based Johns Hopkins University.

SATISH KANADY THE PENINSULA

The KPMG in Qatar has iden-tified five top critical challenges that could be so serious to Qatar’s banking sector in the light of COVID-19 pandemic. The COVID-19 impact on the country’s financial services sector includes liquidity pres-sures, revenue compression and credit quality deterioration, the KPMG said in its soon-to-be released COVID-19 case study on Qatar’s banking sector.

Sharing the KPMG’s key findings exclusively to The Peninsula, Omar Mahmood, head of Financial Services for KPMG in the Middle East & South Asia, and partner at KPMG in Qatar noted the pandemic is having an unprecedented impact on financial markets glo-bally including in Qatar, with implications for banking busi-nesses, employees, suppliers and customers. This has been coupled with the effects of the drop in oil price, which together create a unique situation we live in today.

“While the State of Qatar government has taken a number of proactive measures to ensure that the financial system and wider economy are protected as far as possible from the effects of the COVID-19 pandemic and drop in oil price, there are nev-ertheless implications that banks will inevitably face”, said Omar . “In view of this, there are top 5 ‘challenges’ and ‘focus areas’ for banking executives to consider, he said. The financial services

sector will face liquidity pres-sures in the short, medium and long term, particularly in USD.

Given rate cuts, increasing competition, support for the private sector and a general market slowdown, the banking sector will face the challenge of serious revenue compression.

Credit quality deterioration is another challenge as busi-nesses struggle with cashflow and profitability and while the

real estate sector continues to be challenged.

The industry will face Oper-ational Risks from the new norms in working practices, including cyber security threats and AML controls. Finally, Digital transfor-mation and the pace of change in banking operating models will face greater scrutiny as share-holders look for growth

The KPMG in Qatar has also highlighted five focus areas –Liquidity & capital analysis: Banks need to thoroughly understand their available capital and liquidity resources and more frequently assess the resilience of these core pillars.

Employees: How you treat your employees now, given working practice changes, will have a massive effect on their wellbeing, and consequently on their loyalty and productivity

Customer interaction: Effective digital delivery of services, with minimal dis-ruption to customer interaction, is essential while banks deal with staff shortages, office clo-sures and other measures

Scenario planning: Using scenario modelling and contin-gency planning expertise, incor-porating the impact of COVID-19 and the drop in oil prices, to help make sound decisions amidst the current volatility

Communication & trans-parency: As the economic impact of the crisis begins to bite, banks will need to ensure that they are communicating effectively with their various stakeholders to manage expectations.

While there are

wide-ranging views on how this situation will actually end up affecting financial markets, one point over which there is unan-imous agreement is that we will be dealing with the effects of the COVID-19 pandemic for the foreseeable future, and the banking sector as a whole will most certainly evolve as a result

of this. “Those banks that are agile, flexible and willing to transform business models will be the ones that succeed, and secure the financial strength need for future growth, while those that rest on their laurels will be left behind in an increas-ingly more competitive sector,” Omar said.

Vodafone launches ‘Sawa’ digital engagement platform for charityTHE PENINSULA— DOHA

Vodafone Qatar has launched its new “Sawa” digital engagement platform to encourage everyone in the country to be part of its chari-table giving campaign during the holy month of Ramadan.

In the spirit of giving back and to inspire all communities to participate, each week Vodafone Qatar will donate an amount to one of three charity initiatives: Qatar Charity, Qatar Red Crescent, and Education Above All. Every 100 points collected by playing on the Sawa platform are equivalent to a QR1 donation, so the more people play, the faster Vodafone gets to its donation goal.

Sawa will get participants

playing with a range of games and activities, including daily polls, trivia questions, a sorting quiz, word puzzles and button masher polls. Every participant will also get the chance to win prizes, with the top three weekly winners picked and awarded at the end of the month of Ramadan. One final winner with the highest score

at the end of the competition will win the grand prize of QR25,000 which will also be announced at the end of Ramadan.

With the launch of the Sawa platform, Vodafone Qatar brings together fun and doing good in an innovative new way, continuing its role as a pioneer and leader in digital engagement.

In a statement, Vodafone Qatar said: “Every Ramadan but especially this year when community activities are limited, we try to bring people together and encourage posi-tivity by doing more to give back to society. Beginning this week, the public can help us reach our goal of donating QR140,000 to Qatar Charity.

The Sawa platform reminds us that we are in this together, even in giving, and everyone can join in to help us support the work of these three initia-tives to benefit those most in need.”

Each week, once Vodafone Qatar reaches its donation goal, the company will announce the following week’s charity and donation goal. The Vodafone Sawa platform can be accessed via the web as well on mobile devices using the link sawa.vf.qa, and through the My Vodafone app.

Omar Mahmood, head of Financial Services for KPMG in the Middle East & South Asia, and partner at KPMG in Qatar

MPHC reports

net profit of

QR57m in first

quarter

FROM BUSINESS PAGE 1

Liquidity remained robust as cash and cash equivalents of MHPC stood at QR1.2bn for the first quarter. Total assets amounted to QR14.8bn for the first quarter compared to QR15.5bn during fourth quarter of 2019.

During the first quarter, the Petrochem-icals segment reported a revenue of QR367m, a decrease of 38 percent, compared to the same period last year. Net profit amounted to QR27m, with a decline of 89 percent compared to the same period last year.

Drop in crude prices and the overall chal-lenging macroeconomic environment, negatively affected the selling prices, which declined by 20 percent compared to the same period last year. Sales volumes declined by 23 percent from last year, primarily due to the planned periodic turna-round of Q-Chem II facil-ities implemented during the quarter. Production dropped by 35 percent due to the periodic planned turnaround, which is nec-essary to maintain the plant lives and ensure HSE standards.

During the first quarter of 2020, segment revenue declined by 28 percent compared to the same period in 2019, to reach QR149m. The decline in revenue was mainly due to the decrease in sales volumes by 20 percent and selling prices by 10 percent. The decline in sales volumes was attributed to the planned maintenance shutdowns within QVC facilities. During the period, the segment reported a net profit of QR22m, down by 71 percent from previous year, attributable to the overall drop in segment revenue.

Compared to the fourth quarter of 2019, MPHC’s revenue declined by 24 percent, while net profit declined by 88 percent. The selling prices slightly declined by 1 percent, as the impact of COVID-19 and the present oil price crisis is partially felt in the prices. Sales volumes declined by 21 percent mainly due to the decline in production volumes, which declined by 40 percent, due to planned maintenance shutdowns.

MPHC will host an IR earnings call with investors to discuss its first quarter 2020 results, business outlook and other matters on May 4, 2020 at 1:30pm Doha Time. The IR presentation that accom-panies the conference call will be posted on the pub-lications page of MPHC’s website.

COVID-19 impact: KPMG highlights top 5 challenges for Qatar’s banking sector

In the spirit of giving back and to inspire all communities to participate, each week Vodafone Qatar will donate an amount to one of three charity initiatives: Qatar Charity, Qatar Red Crescent, and Education Above All.

One point over which there is unanimous agreement is that we will be dealing with the effects of the COVID-19 pandemic for the foreseeable future, and the banking sector as a whole will most certainly evolve as a result of this.

04 TUESDAY 28 APRIL 2020BUSINESS

Britain launches micro-loans scheme for COVID-19-hit small businessesAFP - LONDON

British finance minister Rishi Sunak (pictured) yesterday launched state-backed micro-loans of up to £50,000 ($62,000) for small businesses hit by coronavirus fallout.

Sunak, unveiling his latest emergency COVID-19 scheme before parliament, said the “bounce back” loans would have the interest paid by gov-ernment for the first year.

The new plan is the latest in a series of multi-billion-pound packages to help those affected by the deadly disease in Britain.

“Some businesses will not want to take on more debt which is why our focus has been on cash grants, tax cuts and tax

deferrals -- but for others, loans will be part of the answer,” Sunak told lawmakers.

“So today we are announcing a new micro-loan scheme, providing a simple quick easy solution for those in need of smaller loans.

“Businesses will be able to apply for these new ‘bounce back’ loans to 25 percent of their turnover, up to a maximum of £50,000.”

The loans will be available from lenders from next Monday, while businesses will only have to fill in a simple standard form with no complex eligibility criteria.

Sunak vowed that funds will then arrive within 24 hours of approval.

“I know that some small

businesses are still struggling to access credit,” he added.

“They are in many ways the most exposed businesses to the impact of the coronavirus and often find it harder to access credit in the first place.

“If we want to benefit from the dynamism and entrepre-neurial spirit as we recover our economy, they will need extra support to get through this crisis.”

Late last week, Bank of England policymaker Gertjan Vlieghe had warned that coro-navirus now threatens poten-tially the worst recession in several centuries in Britain.

Britain’s Office for Budget Responsibility (OBR) fiscal watchdog has warned that coronavirus could shrink the economy by 13 percent in 2020.

“We should be in no doubt about the seriousness of the economic situation,” added Sunak, noting the OBR has warned coronavirus will have

“very significant impacts” both at home and in the global economy.

So far, more than four million jobs have been fur-loughed with 80 percent of wages paid by government under emergency support measures, while there have been more than one and a half million new claims for Uni-versal Credit welfare support, according to Sunak.

“These are already tough times and there will be more to come,” he said, adding survey evidence suggested more than a quarter of UK businesses had stopped trading.

“And while our interven-tions have saved millions of jobs and businesses, we cannot save every job and every business.”

Deutsche Banknet profit andrevenue fallas pandemichurts business

AP - FRANKFURT

Deutsche Bank has reported that its net income fell to €66m ($72m) in the first quarter as the pandemic hurt its business. The bank said it was letting its financial buffers fall so it can maintain lending to clients but said the easing was temporary and modest.

The net profit fell from €201m in the first quarter of last year, while revenue dropped to €6.4bn from €6.35bn. Money set aside to cover loans that are not being repaid grew to around €500m from €140m a year ago, one sign of business distress amid the shutdowns aimed at halting the spread of the virus.

It said its common equity tier 1 ratio, one measure of financial strength, fell to 12.8 percent from 13.6 percent at year end. But the bank said it would not restrict lending just to maintain its target for its capital cushion.

“Management has made the clear decision to allow capital to fall modestly and temporarily below its target in order to support clients and the broader economy at this time of eco-nomic crisis,” the company said in a statement. The bank said it was maintaining buffers well above regulatory requirements in any case.

The European Central Bank has eased capital requirements for banks during the pandemic to make it easier for them to keep lending. Bank lending is key to the European economy because companies tend to get their financing from banks as opposed to from bond or stock markets.

The bank released partial first quarter earnings in an email just before midnight Sunday. A more detailed report is due April 29.

Germany and Britain call for ‘greenrecovery’ of global economyAP - BERLIN

Germany and Britain said yes-terday that efforts to revive the global economy in the wake of the coronavirus pandemic must ensure a ‘green recovery’ that helps the world tackle climate change.

Speaking ahead of a virtual meeting of officials from some 30 countries, Germany’s envi-ronment minister said it was important for economic recovery programmes to invest in future-proof jobs that would help reduce greenhouse gas emissions in coming years, rather than aim for a return to business as usual.

“We mustn’t invest in tech-nologies of the past,” Svenja Schulze (pictured) told The Associated Press, noting that some countries are holding onto plans to build new coal-

fired power plants.Some German politicians

have called for stimulus money to be spent on subsidizing car purchases, to boost the coun-try’s auto industry.

Schulze suggested that one way to do this would be to help care workers buy electric vehicles for house calls. “These are many, many vehicles,” she told The AP. “It would help the economy and it would move us forward (in curbing emissions).”

Scientists have warned that there’s little time left if the world wants to achieve the headline goal of the 2015 Paris climate accord - keeping global warming well below 2 degrees Celsius (3.6 Fahrenheit), ideally 1.5 C (2.7 F).

Some have also likened the strategy adopted by countries in fighting the pandemic - the idea of flattening the curve of infections so health systems don’t collapse - to the need to bring down the rate of green-house gas emissions that are driving global warming.

Britain’s Business Secretary Alok Sharma, who is co-hosting the two-day talks, said that “the world must work together, as it has to deal with the coronavirus pandemic, to support a green and resilient recovery, which leaves no one behind.”

Gold buyers forking over lofty $135 premiums for US coinsBLOOMBERG

Retail investors can’t seem to get enough of gold during the coro-navirus crisis, and they are willing to pay staggering amounts to get their hands on it.Consumers who want to buy gold coins typically have to pay more than the per-ounce prices quoted on financial markets in London and New York. That premium has jumped to $135, more than tripling from two months ago, said Robert Higgins, CEO at Argent Asset Group LLC in Wilmington, Delaware.

“There has never been a time for American Gold Eagles at this premium level,” Higgins said in an interview, referring to the popular US bullion coin.

The surge is being exacer-bated by lockdowns, which have led to a squeeze in the

supply of coins and bars available for shipment around the globe. At the same time, bul-lion’s status as a haven is luring investors rattled by worldwide market and economic turmoil.

“Until the world catches up with the imbalance and gets back to a normal balance of supply and demand, the pre-miums will stay,” Higgins said.

Gold-coin premiums tracked by Certified Coin Exchange are at the highest levels in six years, data from the bourse show.

Last year, bar and coin demand fell by 20 percent to the lowest level since 2009, hurt by costlier prices that discouraged retail bullion buying globally, according to the World Gold Council. That began to reverse in 2020, with investors snapping up coins sold by the US Mint in March at the fastest pace in over three years.

Qatar’s trade surplus at QR7.6bn in MarchTHE PENINSULA - DOHA

Qatar’s foreign merchandise trade balance, which repre-sents the difference between total exports and imports, showed a surplus of QR7.6bn in March showing a fall of about QR5.6bn or 42.4 percent compared to March 2019, and decline of nearly QR5.9bn or 43.7 percent compared to Feb-ruary 2020.

The total value of exports of goods, including exports of goods of domestic origin and re-exports, in March 2020 reached at QR15.9bn, showing

a decrease of 30.1 percent compared to the same month in 2019. On monthly basis, Qatar’s exports in March 2020 decreased by 25.0 percent compared to February 2020, preliminary data released by the Planning and Statistics Authority (PSA) showed.

On other hand, the imports of goods in March 2020 amounted to around QR8.3bn, showing a decrease of 13.2 percent over March 2019. However, on a month on month (m-o-m) basis the imports increased by 7.7 percent.

T h e y e a r - o n - y e a r decrease in total exports was mainly due to lower exports of Petroleum gases and other gaseous hydrocarbons (LNG, condensates, propane, butane, among others) reaching at about QR10.5bn in March 2020, a decrease of 22.3 percent, Petroleum oils and oils from bituminous minerals (crude) reaching QR1.8bn, decreased by 52.1 percent, and decrease in the Petroleum oils and oils from bituminous min-erals (not crude) reaching QR700m, decreased by 48.5 percent.

In March 2020, Japan was at the top of the countries of destination of Qatar’s exports with close to QR2.5bn, a share of 15.5 percent of total exports, followed by South Korea with almost QR2.4bn and a share of 14.9 percent, and India with about QR2.2bn, a share of 13.9 percent.

During March 2020, the group of “Turbo Jets of a Thrust Exceeding 25 KN” was at the top of the imported group of commodities, with QR500m, showing an increase of 179.6 percent compared to March 2019.

In second place was “Parts of Aero planes or Helicopters” with QR400m, showing an increase of 57.1 percent, and in third place was “Motor Cars & Other Motor Vehicles for The Transport of Persons” with QR300m, decrease of 9.3 percent.

In March 2020, the US was the leading country of origin of Qatar’s imports with about QR1.4bn, a share of 17.2 percent of the imports, fol-lowed by China with QR800m almost, a share of 9.5 percent, and Germany with QR700m, a share of 8.1 percent.

BLOOMBERG

As US banks shift their focus to America amid the coronavirus pandemic, a select group of European lenders sees an unex-pected window to win back market share.

BNP Paribas SA has been the most aggressive, leading the five biggest corporate loans in Europe since the beginning of March, according to data com-piled by Bloomberg.

Banco Santander SA, Credit Agricole SA and HSBC Holdings Plc each had a top role on two of the region’s largest loans since the pandemic. JPMorgan Chase & Co was the only USbank to take the lead on more than one of those transactions, the data show.

For a small cadre of European banks, the crisis is throwing up unprecedented opportunities to deepen ties with major companies and win clients, work that they hope to parlay into other business down

the road. It’s also giving them a chance to claw back ground that has been lost since the financial crisis to their more aggressive US rivals, who are pulling back from some lending in the region.

“This situation is a searching pass for the idea to have a strong European bank,” said Robert Buess (pictured), a Zurich-based partner at Oliver Wyman who advises financial institutions. “It’s a good moment for banks to win back market share in investment banking and other businesses by providing loans in difficult times.” But it doesn’t come without risk. The coronavirus pandemic is roiling Europe’s already feeble financial industry, driving up provisions for bad loans and prompting billions in writedowns. And while the likes of Goldman Sachs Group Inc. and Morgan Stanley are becoming more selective on lending in the region amid rising demand back home, Wall Street firms continue to have a firm grip on more prof-itable businesses like mergers

and initial public offerings.Still, at Paris-based BNP

Paribas, the group charged with making loans to corporate clients has never been busier. In one particularly manic week after the outbreak, BNP Paribas got requests for more than 90 new credit lines, according to people familiar with the matter.

The marching orders from the top have been to get out there and lend, the people said. And this has been well beyond the safe confines of state-backed aid programs in their home markets. BNP Paribas, France’s biggest bank, was sole underwriter on UK oil giant BP Plc’s $10bn facility last month, according to people with knowledge of the matter.

Santander has also been tar-geting large, established European companies such as Daimler AG and Royal Dutch Shell Plc where it can leverage its lending capabilities to win market share, one person said. The Spanish bank has seen a

pickup in lending as a result of the crisis, with average daily loan origination in March growing by 16 percent from February, Chairman Ana Botin said at an April 3 shareholder meeting.

Risk teams at lenders including BNP Paribas and HSBC have been swamped with requests for new loans and are speeding up reviews to keep up with demand, the people said, asking not to be identified because the information is private. They’re trying to make decisions within hours, instead of the usual days-long process.

The flurry of activity is a welcome change from recent years when European banks were more focused on building up capital buffers after the 2008 financial crisis. Lenders in the region raised equity, exited non-core businesses and pared back trading operations. All the while, US banks were expanding in Europe, poaching clients and staff from their struggling com-petitors on the continent.

Many European lenders, including Deutsche Bank AG and Commerzbank AG, are ramping up lending in their home markets through government programs, the people said. Germany and Italy have each allocated more than 30 percent of gross domestic product to direct spending, bank guarantees, and loan and equity injections, for a combined $1.84 trillion in aid, figures from the International Monetary Fund show.

Spokespeople for BNP Paribas, Commerzbank, Deutsche Bank, Goldman Sachs and Morgan Stanley declined to comment. A representative for Santander declined to comment ahead of the bank’s earnings, while a representative for HSBC said he couldn’t immediately comment. European lenders’ increased activity comes at a time when USbanks are being inundated with borrowing requests from cash-strapped American companies. Like all banks, they’re having to be more

selective about who they provide funds to, and in some cases may need to turn down transactions with longtime European clients.

BNP Paribas, Santander, HSBC and Deutsche Bank topped the rankings for bookrunners on European corporate loans so far this year, with all gaining market share, according to data com-piled by Bloomberg. Bank of America Corp. and Citigroup Inc. -- among the biggest US balance sheet lenders -- slipped in the league tables for the same period, as did Goldman Sachs and Morgan Stanley, the data show.

The trend hasn’t gone unno-ticed, with the Financial Times and Reuters also writing about American lenders retrenching, leaving an opening for their European counterparts.

The total value of exports of goods, including exports of goods of domestic origin and re-exports, in March 2020 reached at QR15.9bn, while the imports of goods amounted to around QR8.3bn.

Top European lenders fill pandemic void as US banks shift their focus to America

05TUESDAY 28 APRIL 2020 BUSINESS

Bank of Japan expands monetary stimulus in bid to beat crisisREUTERS — TOKYO

The Bank of Japan expanded monetary stimulus yesterday and pledged to buy an unlimited amount of bonds to keep borrowing costs low, as the government tries to spend its way out of the growing economic pain from the coro-navirus pandemic.

The step, which follows monetary easing only a month ago, puts the BoJ in line with other major central banks that have unleashed unprecedented amounts of monetary support as the health crisis stokes fears of a deep global recession.

BoJ Governor Haruhiko Kuroda (pictured) said the

central bank was ready to act further to fight the impact of the novel coronavirus, which he said could do more harm to the global economy than the 2008 collapse of Lehman Brothers.

“The current crisis could have a bigger negative impact than the Lehman shock. The government and the central bank obviously need to work together, particularly at a time like this,” Kuroda told a news conference.

The BoJ also sharply cut its economic forecast and pro-jected inflation would fall well short of its 2 percent target for three more years, suggesting its near-term focus will be to battle the crisis. To ease corporate

funding strains, the BoJ said, it will boost three-fold the maximum amount of corporate bonds and commercial paper it buys to 20 trillion yen ($186bn).

The central bank also clar-ified its commitment to buy

unlimited amounts of gov-ernment bonds by scrapping a loose guidance to buy them at an annual pace of 80 trillion yen.

“The BoJ will purchase the necessary amount of gov-ernment bonds without setting an upper limit” to keep long-term interest rates around its 0 percent target, it said in a statement.

Kuroda rebuffed the view held by some analysts and pol-iticians the BoJ’s bond buying was directly aimed at financing huge government spending.

He said the purpose was to keep yields stable and low, which could also boost the effect of fiscal spending.

“We aren’t monetising

government debt,” he said. “But we also hope it will heighten the effect of a policy mix between fiscal and monetary measures.” At the meeting yesterday, cut short by a day as a precaution against the spread of the pan-demic, the BoJ kept its interest rate targets unchanged, as had been widely expected.

The central bank, however, offered to pay a 0.1 percent interest rate to financial institu-tions that tap its new loan pro-gramme to combat the pan-demic to try to encourage com-mercial banks to boost lending to cash-strapped firms.

“The amount of assets the BoJ pledged to buy and the degree to which it loosened rules

on its purchases were bigger than expected,” Mari Iwashita, chief market economist at Daiwa Securities said. “It just shows how concerned the central bank is.” Under a policy dubbed yield curve control, the BoJ targets short-term interest rates at -0.1 percent and 10-year bond yields around 0 percent. It also buys government bonds and risky assets to pump money aggres-sively into the economy.

Corporate funding costs have crept up in Japan despite the BoJ’s decision last month to boost buying of risky assets, including corporate bonds and commercial debt, and create a loan pro-gramme to assist funding of business hit by the pandemic.

Pandemic watchdog activates site to track trillions in spendingBLOOMBERG

An oversight committee created to root out fraud and abuse within the trillions of federal dollars being spent to combat coronavirus launched its website and announced its executive director yesterday, the first public action by a panel already ensnared in contro-versy.

The independent com-mittee was created to oversee spending under the $2.2 trillion CARES Act that Congress approved and President Donald Trump signed into law a month ago. The group, whose mandate has expanded to include almost $500bn approved on Friday, is com-prised of independent inspectors general from more than a dozen federal agencies.

Investigations are already underway looking into airlines receiving federal support, the validity of tax credits claimed by businesses, the accuracy of the economic stimulus pay-ments and the Health and Human Services Department’s adherence to safety protocols during the outbreak, according to the website.

Robert A. Westbrooks was named the panel’s executive director. He “most recently

served as the Inspector General for the Pension Benefit Guaranty Corporation where he helped protect the retirement benefits of 35 million American workers and retirees,” according to the statement.

The effort to help small businesses retain their workers, known as the Paycheck Pro-tection Program, has come under fire after big restaurant chains like Potbelly Corp. and Ruth’s Chris Steak House got loans, while many mom-and-pop firms were left stranded. Both businesses have since said they won’t accept the stimulus funding.

Even before it was fully operating, Trump had chal-lenged and undercut the power of the group, officially known as the Pandemic Response Accountability Committee, indi-cating contentious times ahead to hold agencies accountable for spending and managing a bailout program for small businesses.

On April 7, Trump removed an experienced inspector general who was appointed to chair the committee. The career official, Glenn Fine, had been serving as the acting inspector general of the Defense Department. But Trump

designated a new acting IG at the Pentagon, thereby demoting Fine and making him ineligible to chair the committee.

Westbrooks, the new exec-utive director, was appointed to the watchdog role at the pension agency during President Barack Obama’s administration, cre-ating another potential target for Trump, who has criticized inspectors general named under his predecessor as prejudiced against him.

Trump also has sought to undercut several oversight powers provided by Congress in the CARES Act. In a signing statement accompanying the act, Trump said he doesn’t recognize a mandatory requirement that congressional leaders help select the leadership of the Pandemic Response Accountability Committee.

Trump also said a newly established inspector general within the Treasury Department to manage investigations of pan-demic-related loans doesn’t have the power to issue reports to Congress without presidential supervision.

Trump has repeatedly clashed with independent federal watchdogs, challenging their findings and implying they might have a political agenda.