Tuesday, November 24, 2009

“Citigroup to sell BMO a Diners Club business - CNN Money” plus 4 more

“Citigroup to sell BMO a Diners Club business - CNN Money” plus 4 more

Citigroup to sell BMO a Diners Club business - CNN Money

Posted: 24 Nov 2009 05:35 AM PST

* Sale includes Diners Club business in U.S., Canada

* Terms not disclosed

* Transaction expected to close by March 31

* Bank of Montreal parent bolsters corporate card business

(Adds details on acquisition)

NEW YORK (Reuters) - Citigroup Inc said it agreed to sell its Diners Club North America credit card business to Canada's BMO Financial Group as it sheds unwanted assets and focuses on its main units.

The agreement gives BMO exclusive rights to issue Diners Club cards in the United States and Canada. It will also more than double the company's corporate card business, as many business travelers use Diners Club cards.

BMO -- also known as Bank of Montreal -- will add nearly US$1 billion of outstanding customer bills and US$7.8 billion of card transactions.

The terms of the transaction were not disclosed, but the companies expect the deal to close before the end of March, pending regulatory approvals.

Diners Club is part of Citi Holdings, a portion of Citigroup that includes troubled or underperforming assets that the New York-based bank hopes to sell or wind down. Citigroup's main businesses, including retail and investment banking, are in an entity called Citicorp.

Diners Club offered the first charge card to be accepted by multiple companies, starting in 1950. Citi bought the business in 1981, and in 2008, sold the non-North American charge card network to Discover Financial Services.

Citigroup Chief Executive Vikram Pandit is casting offassets after the bank took $45 billion of taxpayer money in a series of federal bailouts.

The bank said the Diners Club transaction was not expected to materially affect its net income or capital ratios.

Under the agreement, Citigroup will continue to support the Diners Club business until it is fully integrated with BMO.

BMO said Diners Club represents a long-term strategic fit within its commercial card business and allows it to expand offerings to clients.

Citigroup shares closed Monday at $4.28 on the New York Stock Exchange. While those of Bank of Montreal closed at C$53.55 on the Toronto Stock Exchange. ($1=$1.05 Canadian) (Reporting by Jonathan Stempel and Euan Rocha; Editing by Lisa Von Ahn and Maureen Bavdek)

This content has passed through fivefilters.org.

SBA to run out of stimulus funds - Houston Business Journal

Posted: 23 Nov 2009 10:58 AM PST

Say goodbye to the 90 percent guarantee and reduced fees that sparked a rebound in U.S. Small Business Administration lending.

In a few days, the SBA will run out of the $375 million in economic stimulus funds that enabled the agency to make these enhancements. As a result, beginning Monday, borrowers and lenders will have to make a choice: They can be put on a waiting list to receive these breaks as stimulus funds become available, or they can apply for a regular SBA loan with higher fees and a lower government guarantee for the lender.

The SBA expects additional funds to become available to make loans under the stimulus provisions, since not everyone who is approved for a loan will go through with it. But, loans on the stimulus waiting list run the risk of not being funded at all.

As recently as Nov. 18, SBA officials said they expected to be able to make loans under the stimulus provisions into December. But, loan applications surged this past week, as borrowers and lenders tried to get their applications in before the stimulus money ran out.

SBA lenders, small business groups and the Obama administration have urged Congress to find money to extend the stimulus enhancements. But, Congress so far has failed to do so.

As a result, government guarantees on 7(a) loans will revert back to their usual 75 percent for loans of more than $150,000 and 85 percent for loans of $150,000 or less. Fees on 7(a) loans and 504 loans, which are used to finance real estate, will revert to their normal levels.

The higher guarantee made SBA loans more attractive to lenders, and the reduced fees made the loans more affordable for borrowers.

This content has passed through fivefilters.org.

Tyson Foods posts 4Q loss on beef charge - Beaver County Times

Posted: 23 Nov 2009 08:24 PM PST

Tyson Foods Inc. said it made strides in the meat business this year and predicts more improvements next year, but analysts worry the company's all-important chicken business is lagging others in the industry.

The world's largest meat producer, based in Springdale, Ark., said on Monday a hefty impairment charge in its beef business left it with a loss for the fourth quarter. But all of its business units, including chicken and pork, were profitable, when excluding the $560 million noncash charge.

The company said it expects those profits to continue as an improving economy will lead to better demand next year. Consumers have been watching their money tightly in the recession, eating less expensive food and limiting trips out to restaurants. That has hurt Tyson's business by pulling down prices for key items like chicken breast meat.

The company did not issue guidance for 2010, other than saying it expected to see more progress. There are still issues, such as feed costs rising again _ though not as high as records from summer 2008 _ and fluctuating foreign currencies.

"We have our beef, pork and prepared business where they should be, and we're on our way to getting our chicken business there, too," Donnie Smith, who was promoted to Chief Executive officer last week, told analysts on a conference call Monday.

The company's chicken business was hurt the most in the downturn, and last January it tapped former CEO Leland Tollett to restore the segment to growth. He was replaced last week by Smith, Tyson's senior group vice president of poultry and prepared foods, a sign that the company thinks its chicken business has improved.

But according to the latest numbers, the chicken business is performing worse than those of Tyson's peers, said KeyBanc Capital Markets analyst Akshay Jagdale.

Other companies in the industry _ including Pilgrim's Pride Corp, which filed for bankruptcy protection amid the downturn _ have cut production, which bolsters prices and helps ensure profits. But Tyson only shed inventory and made no mention of chicken production cuts next year, Jagadale said. Chicken volumes were up 10.4 percent in the quarter.

"They were very bullish about this fourth quarter just a few months ago and this ended up being a really bad quarter and their peers have had a very good quarter," he said.

Pilgrim's Pride said Monday it earned $82.7 million in the fourth quarter, an improvement from a loss of $802 million last year. Its chicken sales volume fell 14 percent due to production cutbacks.

Tyson lost $455 million, or $1.22 per share in the three months ended Oct. 3. That compares with a profit of $48 million, or 13 cents per share, a year ago.

Tyson lowered the value of its beef segment with the $560 million noncash charge, saying its cost of capital has gone up. It is used to determine fair market value, so the company had to lower the segment's worth. Tyson bought beef processor IBP Inc. for $3.2 billion in a cash and stock deal in 2001.

Excluding the impairment charge of $1.50 per share, Tyson earned 28 cents per share.

Sales rose slightly to $7.21 billion from $7.2 billion, with chicken sales up 11 percent to $2.64 billion from $2.38 billion.

Excluding the charge, Tyson's performance beat the expectations of analysts surveyed by Thomson Reuters, who forecast a profit of 26 cents per share on revenue of $6.88 billion.

Shares of Tyson fell 19 cents, or 1.5 percent, to close at $12.88 Monday.

For the year, Tyson lost $537 million, or $1.44 per share, compared with a profit of $86 million, or 24 cents per share, the year before, which included one less week.

Adjusted earnings were 6 cents per share after removing the impairment charge.

Annual sales dipped 1 percent to $26.7 billion from $26.86 billion.

___

AP Business Writer Michelle Chapman contributed to this report from New York.

This content has passed through fivefilters.org.

Christie meets with Rendell on economic development - Philadelphia Inquirer

Posted: 24 Nov 2009 05:21 AM PST

New Jersey Gov.-elect Christopher J. Christie has been reaching across the aisle to Democrats since Election Day, and yesterday he reached across the Delaware River to one more member of the opposition party: Gov. Rendell.

The two former prosecutors met for about 45 minutes at the Fairless Hills headquarters of a company that is setting up to manufacture polysilicon, a material used in the creation of solar panels.

Christie said York Tsuo, the founder of AE PolySilicon Corp., was from his own hometown of Livingston, N.J., but decided to locate his firm in Pennsylvania in part because of a more favorable tax structure. New Jersey is often ranked as one of the least business-friendly states in the nation, based on criteria including taxes.

Christie said that he hoped to learn from the best, and that in terms of attracting and retaining businesses, Rendell fit the bill.

"You heard me talk about Pennsylvania being a model for us from an economic-development perspective," Christie said. He and Lt. Gov.-elect Kim Guadagno "came here to learn," he said.

Christie said it would be good for the region for New Jersey and Pennsylvania to compete for jobs, but also to work together on initiatives such as marketing for tourism.

On the campaign trail, Christie talked about lowering income taxes and addressing property taxes. Yesterday, he declined to offer more specifics on what he might do financially to try to entice businesses to New Jersey.

Rendell said both states benefit when companies come to the region, noting that 40 percent of the longshoremen in Philadelphia live in South Jersey.

Christie said he had learned from Rendell that there is "no substitute for the involvement of the governor."

Rendell is known for being intimately involved in the process of recruiting businesses to Pennsylvania - sometimes from New Jersey - frequently making phone calls to speak with company executives.

New Jersey business leaders, while hesitant to criticize Corzine, said they hoped Christie's approach would resonate.

"I do know that Gov. Rendell's approach is extremely hands-on," said Joan Verplanck, president of the New Jersey Chamber of Commerce. "He would call the CEO of the New Jersey company weekly to make sure everything was moving well."

Philip Kirschner, president of the New Jersey Business and Industry Association, said such an approach could help.

"You have to distinguish yourself, and you do that by the incentives you offer, but also by the attention you give the prospect," Kirschner said. "Everybody likes to be paid attention to, and when that attention comes from the governor, and when you have assurance from the governor that the state will do everything possible to work with you, that makes a difference to a CEO - they remember that, and it impresses them."

Christie and Rendell also talked about the dredging of the Delaware River, which has been a source of contention between the states. Pennsylvania favors dredging because it would create jobs, but New Jersey and Delaware have argued it would hurt the environment.

Christie said that he told Rendell he was happy to listen to his arguments and that Rendell did not ask him to withdraw the state's lawsuit against the Army Corps of Engineers to stop the dredging from taking place.

Contact staff writer Adrienne Lu at 609-989-8990 or alu@phillynews.com.

This content has passed through fivefilters.org.

Late payments on credit cards drop in 3rd quarter - ABC2 News

Posted: 24 Nov 2009 05:35 AM PST

NEW YORK (AP) — For the first time in a decade, more people paid their credit card bills on time in the third quarter this year than in the second quarter.

The delinquency rate on bank-issued cards like those bearing MasterCard and Visa logos fell to 1.1 percent for the June-to-September period, from a rate of 1.17 percent in the prior three months, according to credit reporting agency TransUnion.

The 6 percent drop is significant not just for its size but also for its timing, since delinquency rates usually rise in the third quarter from the prior period, said Ezra Becker of TransUnion's financial services group. Taken together with the more than 11 percent decline seen between the first and second quarters, the results indicate that consumers are getting better at handling their debt.

The 2009 third-quarter delinquency rate was basically flat with the 2008 third quarter, when 1.09 percent of card payments were 90 days or more past due. TransUnion measures credit card delinquencies at 90 days because three months is considered an indicator that the card holder will default, since it is difficult to make up that many missed payments.


©2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This content has passed through fivefilters.org.
Posted by at

0 comments:

Post a Comment

Subscribe to: Post Comments (Atom)