| {"podcast_details": {"podcast_title": "Marketplace Morning Report", "episode_title": "Credit Suisse collapse gives UBS a major boost", "episode_pubDate": "Thu, 31 Aug 2023 10:58:25 +0000", "episode_image": "https://www.marketplace.org/wp-content/uploads/2019/05/marketplace_morning_show_logo-1.png", "episode_transcript": " Have you heard of Instacart Business? It's a new way to stock up on supplies, fresh ingredients, and last minute items, delivered in as fast as one hour. Whether you run an office, restaurant, or store, you can get what you need from over 1,200 retail brands, with delivery that moves as fast as you do. Sign up for Instacart Business, and for a limited time, get free delivery and 2% credit back for one year, with a free Instacart Plus trial. Visit instacart.com slash business to redeem. Instacart Plus trial for new users while supplies last. Plan renews at $99 per year, $250 credit back minimum, excludes alcohol, terms apply. Have you heard of Instacart Business? It helps you take on Monday with office supplies, snacks, and last minute items delivered in as fast as one hour. And with access to over 1,200 retail brands, you can get your team's favorites, even their break room coffee. Get delivery that moves as fast as you do. Sign up for Instacart Business, and for a limited time, get free delivery and 2% credit back for one year, with a free Instacart Plus trial. Visit instacart.com slash business to redeem. Instacart Plus trial for new users while supplies last. Plan renews at $99 per year, $250 credit back minimum, excludes alcohol, terms apply. When two Swiss banks become one. Hello, and you're listening to the Marketplace Morning Report, live from the BBC World Service. I'm Leanna Byrne. A very good morning to you. Now throwback to the season of banking collapses. It's been more than five months since Swiss bank UBS bought its rival Credit Suisse in a $3 billion government-backed bailout. The banking giant had delayed its second quarter results. That's the first since that takeover. And today they finally released them. They recorded a $29 billion pre-tax profit. That's almost entirely thanks to the takeover. And at the same time, UBS says it will press ahead with absorbing Credit Suisse's domestic business, which will result in thousands of job cuts and branch closures. Banking analyst Frances Coppola explained what the implications are to BBC's Will Bain. There's an absolute massive headline profit of about $29 billion made up almost entirely of what UBS didn't pay for Credit Suisse. It must be one of the best deals in history this, because it's almost $29 billion of what we call negative goodwill, which is the difference between what UBS actually paid for Credit Suisse and the net book value of the actual assets that they've purchased. They basically bought them at a whopping discount, and they put all of that through profit and loss, and it's turned up as a $29 billion. Couple of controversial bits ahead, though, aren't there? One, the decision that came in the results that UBS would swallow up in its entirety Credit Suisse's domestic bank. Politicians in Switzerland have been pretty critical of that. Yeah, they're not going to be happy about that, because it does mean now that there will eventually only be one very big Swiss bank in Switzerland, which is a worry for them. From an economic point of view, from a brand point of view, and from a competition point of view, it does mean that eventually the Credit Suisse brand will disappear, although they do say in the results it will take them a while. That was banking analyst Frances Coppola. Now, more signs of economic trouble from China, its manufacturing sector contracted for the fifth straight month. David Wu is former IMF economist and Wall Street investment strategist, and he says that China's leaders are constrained when it comes to boosting the economy. The government faces a lot of constraints, so I don't want to say that they're just not doing their job. I mean, quite clearly with the Fed still hiking rates, other central bank hiking rates, the ability to lower interest rates is very limited. At the same time, what's going on is that China being so very leveraged, especially with the buildup in debt over the last three years since the pandemic, I think there's a great reluctance to resort to more fiscal stimulus. And this is why they've been resorting to very incremental steps. And clearly those incremental steps so far are failing to actually turn things around. That was investment strategist David Wu. All right, let's do the numbers. Sticking with China, Chinese property giant Country Garden reported record losses, which pushed the CSI 300 real estate index down by 2 percent. Eurozone inflation stalled in August at 5.3 percent, which cast doubts over where the European Central Bank will pause its series of interest rate hikes. And the Swedish buy now pay later startup Klarna says it's returned to profit for one month for the first time in three years, but refuses to say which month. Europe's biggest wildfire this century is raging in Greece. Both lives and livelihoods have been lost. The direct cost to local businesses on the Greek island of Rhodes has been felt from the loss of tourism to the destruction of property. The BBC's Sofia Adamadou has been seeing how businesses were affected by those fires. Driving through the southern part of Rhodes, you can notice the aftermath of the recent 10 day fire that swept through the region. Hills now bear the scars of the blaze. In this transformed scenery, there is Katari, a village heavily impacted by the fires. For those businesses, the fire brought significant economic challenges. I have arrived to the Lighthouse Beach Bar in Katari to meet Georgi Appalakiatis. Her beach bar provided shelter to people during the fires. We had something like 10,000 people walking on the road. All the restaurants at Katari were trying to help the people, giving them cold water. I personally put about a thousand people in my shop, waiting for the coast guard to come and pick them up. It was very hectic, it was very panicking. We've opened our businesses, we've opened our hearts, but unfortunately there are no tourists. There's no one. Further along the town, I find Dimitris Zoraris. He owned a horse riding club where tourists enjoyed horseback riding. Before the fire got in the village, his colleague mounted one of the horses, guiding the rest horses to safety. Within minutes, all of his hard work, the ranks that he built with his own hands, was reduced to ashes. I'm 72 years old. I can't build anything from scratch again. I used to believe that for as long as I would live, I would care for that place. For me, it was a place of life. It was a place that fulfilled me, made me live and feel good. The fires and robes have subsided. What happens next? This is a message from Georgi Apolakiatis, who we heard from earlier. We want people to come to the south of Rhodes. We want people to rent villas, rent apartments, but get out, support the people. Support the people of the south of Rhodes. It's beautiful, it's safe, our ocean hasn't changed, it's crystal clear. The food is absolutely phenomenal. Please visit us. Local businesses have reopened their doors, ready to once again offer tourists the unparalleled hospitality and enjoyable experiences they have always provided. In Rhodes, I am BBC's Sofia Adamidou for Marketplace. And finally, police in Canada have thanked local beekeepers for coming to the rescue after hives containing around 5 million honey bees. The hives containing around 5 million honey bees fell off the back of a lorry near Toronto. Dozen beekeepers were mobilised to round up the swarms, sustaining plenty of stings in the process. But it's all sorted, but then again, if you're in the area, beware. I'm Leanna Byrne with the Marketplace Morning Report from the BBC World Service."}, "podcast_summary": "- UBS, the Swiss bank, has recorded a $29 billion pre-tax profit in its second quarter, largely due to its takeover of Credit Suisse.\n- UBS plans to absorb Credit Suisse's domestic business, resulting in job cuts and branch closures.\n- China's manufacturing sector has contracted for the fifth consecutive month, and the country's government faces constraints in boosting the economy.\n- Chinese property giant Country Garden reported record losses, leading to a 2% drop in the CSI 300 real estate index.\n- Local businesses on the Greek island of Rhodes are facing economic challenges following the devastating wildfires, with tourism and property destruction affecting livelihoods.\n- Around 5 million honey bees fell off a lorry near Toronto, Canada, and local beekeepers were called in to round them up.", "podcast_demographic": "- Business owners and managers\n- Banking professionals and analysts\n- International economics enthusiasts"} |