LONDON – Royal Bank of Scotland Group PLC said it would give homeowners who miss mortgage payments at least six months before starting repossession action – double the three months it used to give. The move comes on the first business day after the British government took majority control of the bank. Another bank, London Scottish Bank, which specializes in unsecured consumer lending and debt collection and employs about 700 people, said it had gone into administration after its capital reserves ran short and it couldn’t find a buyer. The British Treasury said it would protect all retail deposit savings held with the bank. Meanwhile, a leading housing report said home prices in Britain fell to their lowest level in nearly three years in November as banks reined in lending and buyers were deterred by the economic downturn. And a closely-watched survey showed that British manufacturing activity contracted at a record pace during November as new orders collapsed, stoking expectations that the Bank of England may slash its benchmark interest rate by a full percentage point later this week. The BoE, in the mean time, said Britons took out fewer mortgages and curtailed spending in October as the economic downturn intensified. The FTSE 100 index of leading British shares closed down 222.52 points, or 5.2 percent, at 4,065.49.
REYKJAVIK, Iceland – Icelanders were gathering on the 90th anniversary of national autonomy to call for the ousting of bankers and politicians they blame for the country’s economic collapse. Weekly demonstrations against the government draw several thousand people in a country of 320,000. The global credit crunch brought down the tiny country’s three main banks in October. Since then businesses have failed, unemployment has risen, prices have shot up and the value of the country’s currency, the krona, has plummeted.
MUNICH, Germany – State bank BayernLB plans to cut 5,600 jobs – 29 percent of its total work force – to weather the global financial crisis, the company said Monday. The cuts at the bank, which has been hit hard by the global financial turmoil, would be made through 2013 and would affect at least 1,000 positions in Munich, where the bank is headquartered, and in branch offices. Another 200 cuts would be made outside Germany, the bank said in a statement. Meanwhile, retail sales in Europe’s biggest economy fell 1.5 percent in October from last year as recession fears dampened spending by German consumers. German Chancellor Angela Merkel said Monday she is leaving “all options open” to stimulate Germany’s flagging economy, but repeated she still does not favor immediate tax changes. The DAX settled down 274.65, or 5.9 percent, at 4,394.79. The CAC-40 in France, meanwhile, ended 182.25, or 5.6 percent, lower at 3,080.43.
MUMBAI, India – India’s stock market fell sharply amid uncertainty over the political and economic outlook after terrorist attacks killed more than 170 people in the country’s financial capital. Also weighing on investors were fresh signs that economic downturns in the U.S. and Europe, both major export markets, were weakening demand for Indian-made goods. The Bombay Stock Exchange Sensitive Index, or Sensex, closed down 252.85 points, or about 2.8 percent, at 8,839.87 on light volume. The index rose 0.7 percent on Friday after being shut on Thursday. While the attacks could keep tourists and foreign investors away, at least in the short term, some analysts attributed the decline to shock and anxiety in the immediate aftermath rather than a loss of confidence in India’s economic prospects. Adding to the unease, government data showed the country’s exports were down 12.1 percent in October compared with a year ago, further evidence that the global slowdown was taking a toll on India’s economy.
SEOUL, South Korea – South Korea’s exports fell in November by the most in nearly seven years, the government said, while automakers took steps to cut production as vehicle demand slumps amid the weak global economy. Exports dropped 18.3 percent in November from the same month last year to $29.26 billion. Imports fell 14.6 percent to $28.97 billion for a trade surplus of $297 million. The ministry cited economic doldrums overseas related to the world financial crisis for the decline in exports. The Kospi fell 1.6 percent to close at 1,058.62.
BANGKOK, Thailand – Stocks reversed early gains as investors weighed prospects that the country’s political crisis will be resolved soon. Antigovernment protesters have occupied Bangkok’s two main airports for nearly a week, cutting off air freight, stranding tourists and crippling the economy. The benchmark SET index fell 2.7 percent to 390.92.
BEIJING – China’s manufacturing activity contracted sharply in November, falling to 38.8 in November from 44.6 in October, as a downturn in the world’s fourth-largest economy worsened, raising the threat of politically volatile job losses. A number below 50 for the purchasing managers index indicates manufacturing activity is shrinking. The government also lifted food price controls imposed earlier in the year to cool high inflation. The move highlighted the speed with which Beijing has had to shift focus from surging prices to falling growth. China’s Shanghai Composite index gained 1.3 percent to 1,894.61.
DOHA, Qatar – The United Nations is recommending massive economic-stimulus packages to deal with the fallout of a global downturn. A U.N. report predicts the U.S. dollar and world per capita income will decline further in 2009. It says export growth and capital inflows will fall and borrowing costs for developing countries will increase next year. The report says the world body recommends stronger regulation of financial institutions, an overhaul of the international reserve system and more inclusive global economic governance.
MADRID, Spain – Spain’s car manufacturers reported a 50 percent drop in sales in November compared with the same period a year ago, the second worst annual drop on record and the latest sign of the country’s sharply weakening economy. Automobile trade association ANFAC said 63,068 vehicles were sold last month, down 49.6 percent from the 125,206 sold in November 2007. Sales so far this year are down 26 percent at 1.08 million.
TOKYO – The benchmark Nikkei 225 stock average lost 115.05 points, or 1.4 percent, to close at 8,397.22 after advancing 7.6 percent last week. Investors sold exporters as the yen strengthened, which erodes their overseas earnings. Markets in Australia and Singapore also fell, while Hong Kong’s Hang Seng index closed up 220.60 points, or 1.6 percent, to 14,108.84, continuing its rally from last week, when it rose nearly 10 percent.
KUWAIT CITY – A Kuwaiti Cabinet minister says the government is reviewing a 35-billion dinar – about $128 billion – development plan because of lower oil prices and the effects of the global financial crisis. Her comments are the first indication that lower state income and the global financial meltdown are affecting Kuwait’s ambitious plan to become a regional financial hub. The plan begins fiscal 2009-2010 and ends 2013-2014. It includes building new cities, ports, a railway and an underground.
BRUSSELS, Belgium – European Union finance ministers took a first look at a proposed 200 billion euros ($252 billion) economic stimulus package to counteract a deepening economic slowdown – a plan the 27 EU leaders are asked to formally endorse later this month. The finance ministers’ first round will give an indication how enthusiastic EU capitals are about the European Commission proposal for ambitious public spending measures and tax breaks in 2009 and 2010. The plan was made public last week. Meanwhile, the EU said it had to carefully inspect France’s bank bailout plan – but stressed it was not blocking it – to make sure banks wouldn’t profit unfairly from large doses of state money. The EU rejected media reports that it sought to stop the French financial rescue package. The EU also said it will take the first step toward new rules governing high-risk hedge funds this week.
CHARLOTTE, N.C. – American International Group Inc. said it has agreed to sell its wealth-management arm AIG Private Bank Ltd. to Aabar Investments PJSC of Abu Dhabi. Terms of the deal, which is part of the New York-based insurance company’s restructuring plans, were not disclosed. Under its new ownership, AIG Private Bank will become an independent financial institution, headquartered in Switzerland along with branches and representative offices in Hong Kong, Shanghai, Singapore and Dubai.
SAO PAULO, Brazil – Brazilian stocks are down 5.4 percent after rising five days in a row last week. The Ibovespa index fell 1,961 points to 34,634 in midday trading. Argentina’s Merval was down 7.1 percent at 923.44.
WARSAW, Poland – Poland’s prime minister says his Cabinet has prepared a 24 billion euro ($31 billion) plan to stabilize the country’s finances and boost the economy. Donald Tusk said Sunday the plan was preventative and that Poland is in a “not bad situation despite the crisis.”