Petrobras pay $2.95bn to settle US class action on corruption

Brazil's state-controlled oil company Petrobras denied any wrongdoing in the $2.95 billion deal. (Reuters)
Updated 03 January 2018
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Petrobras pay $2.95bn to settle US class action on corruption

LONDON: Petroleo Brasileiro has agreed to pay $2.95 billion to settle a US class action brought by investors who claim they lost money in a corruption scandal.
Brazil’s state-controlled oil company, Petrobras (as it is known) has claimed it was itself a victim, while expressly denying any wrongdoing under the terms of the deal. United States District Judge Jed Rakoff must approve the settlement.
But, the company’s market value has plunged as the so-called Lava Jato or “car wash” corruption scandal has deepened. The company said the settlement will be paid in three roughly equal installments and will affect fourth quarter results.
Investors sued Petrobras after prosecutors in Brazil accused former executives at the company of accepting more than $2 billion in bribes over the course of ten years, mainly from construction and engineering companies.
Petrobras said that it hoped the settlement would resolve all investor claims in the United States over the scandal.
The deal does not include investors who bought non-US-based Petrobras securities outside the United States, according to the company. The deal comes just days after Brazil’s securities regulator CVM formally accused eight former Petrobras executives of corruption.
According to a legal filing by the regulator on Friday, the accusations relate to possible irregularities in the contracting process for three drill ships.
Former Petrobras chief executives Maria das Gracas Foster and Jose Sergio Gabrielle are among the accused in CVM’s filing.
The largest securities fraud settlements in US history include $7.2 billion stemming from the collapse of Enron, $6.2 billion over an accounting scandal at WorldCom and $3.2 billion over an accounting scandal at Tyco International, according to Stanford Law School’s Securities Class Action Clearinghouse.


Emirates NBD Q2 profit surges 30 pct as net interest income rises

Updated 58 min 21 sec ago
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Emirates NBD Q2 profit surges 30 pct as net interest income rises

  • Emirates NBD made a net profit of $716.1 million in the three months to June 30
  • Bank expanded its international operations in May by agreeing to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2 billion

DUBAI: Emirates NBD (ENBD), Dubai’s largest lender, posted a 30 percent rise in second-quarter net profit on Wednesday, boosted by a climb in net interest income and a drop in provisions to cover bad loans.

The bank made a net profit of 2.63 billion dirhams ($716.1 million) in the three months to June 30, it said in a statement, compared with 2.02 billion dirhams in the corresponding period of 2017.

That was ahead of two analysts’ forecasts. SICO Bahrain forecast the bank would make a net profit for the quarter of 2.31 billion dirhams, while EFG Hermes expected a profit of 2.14 billion dirhams.

Banks in the United Arab Emirates are expected to benefit this year as economic growth recovers and investment in infrastructure picks up ahead of Dubai’s hosting of the World Expo in 2020.

Emirates NBD, 55.6-percent owned by state fund Investment Corp, was boosted by a 20 percent rise in net interest income to 3.25 billion dirhams compared with the same period a year earlier. — Reuters

That helped offset a 3 percent dip in non-interest income to 1.10 billion dirhams as income from investment securities dropped.

Reflecting improved economic conditions, provisions for bad loans eased by 49 percent to 315 million dirhams.

With existing overseas operations in several countries including Egypt, India, Saudi Arabia, Singapore, Britain, Indonesia and China, Emirates NBD expanded its international operations in May by agreeing to buy Turkey’s Denizbank from Russia’s state-owned Sberbank for $3.2 billion.

The bank said a 21 percent increase in costs during the quarter was due to higher staff and IT costs related to its digital and technology transformation, as well as higher costs related to international branch expansion.

The bank’s loan and deposit portfolio increased marginally at the end of June. Loans rose by 4 percent to 316.4 billion dirhams, while deposits increased by 3 percent 335 billion dirhams.