Business this week

UBS posted a SFr1.4 billion ($1.3 billion) quarterly net loss. Net outflows of clients’ cash slowed, but still hampered the Swiss bank’s efforts to recover from huge losses. It has been hurt also by investigations in America into customer accounts allegedly used for tax evasion. UBS reached a preliminary settlement with the Internal Revenue Service in a civil action on revealing the identities of account holders. It had settled a criminal case with the Justice Department in February. See article

Britain’s big banks reported earnings for the first half. HSBC’s pre-tax profit was $5 billion—a mere half of what it made in the same period last year, but a significant improvement on its loss in the last six months of 2008. Pre-tax profit at Barclays was £3 billion ($4.4 billion), 8% higher than a year ago. Neither bank has taken government equity.

Northern Rock, in which the British taxpayer holds a sizeable stake, reported a first-half loss of £725m and revealed that the proportion of its mortgages which were more than three months in arrears had risen to 3.9%. Lloyds Banking Group said it had lost £4 billion in the first half of the year, as it grappled with toxic loans at HBOS, which it took over in January. See article

GMAC, a beleaguered American lender, reported a $3.9 billion quarterly loss. The company has received $12.5 billion in public loans since December, and has until early November to fulfil its obligations under the government’s “stress test” requirements.
Here to help

America’s Treasury found that a $75 billion programme set up in March to assist banks in modifying mortgage payments has aided only 9% of eligible borrowers so far. Homeowners can apply if their loan is equivalent to at least 31% of their income and if they are 60 days or more behind with a payment. The Treasury urged banks to do more to push the scheme.
The real economy?

America’s economy contracted by 1% at an annual rate in the second quarter, according to an initial estimate. Consumer spending remained anaemic, but there was a noticeable improvement in business spending, which fell by 8.9% compared with 39.2% in the first quarter. The Bureau of Economic Analysis also carried out a comprehensive review of data, and revised GDP growth for 2008 down to 0.4%, from a previous 1.1%. See article

Google’s boss, Eric Schmidt, resigned as a director at Apple. With Google expanding its mobile-phone and computing businesses, antitrust regulators have started an inquiry into directorships that straddle both companies.

Rupert Murdoch said he expected that all of his websites would charge users for access within a year, despite his previous commitment that only some sites would experiment with such charges. News Corporation’s boss was speaking as the company revealed a quarterly loss, caused in part by its struggling MySpace social-networking site. The media mogul has sparked an intense debate about ending free access to online news content; many observers remain sceptical that such a plan will work.

Cisco Systems reported a drop in quarterly profit. John Chambers, its chief executive, expressed confidence that the company’s recent expansion into dozens of new businesses such as camcorders and visual systems for sports stadiums would eventually help to spur growth.

There was some rare good news from Detroit’s troubled carmakers. Sales at Ford in July were 2% higher than in the same month in 2008, its first year-on-year gain since November 2007. Sales were down by 9% at Chrysler and by 19% at General Motors, though this was better than many analysts had expected.
Government drivers

Ford’s better fortunes coincided with the start of the politically contentious “cash-for-clunkers” programme, giving customers a subsidy for trading in their old vehicles for new, fuel-efficient models. The scheme quickly ran out of cash, but the White House pushed for its replenishment.

Toyota reduced its projected loss for the year and raised its outlook for sales slightly. The carmaker has been helped by, among other things, the Japanese government’s car-scrapping incentives and tax reductions on environmentally friendly vehicles.

Nissan took the wraps off its Leaf electric car. Unlike the fuel-electric hybrids made by its competitors, Nissan’s Leaf runs solely on a battery that can power the car for up to 100 miles (160km) on a single charge. The battery can be recharged in 30 minutes with a special quick charger, though it takes eight hours from an ordinary household socket. Carlos Ghosn, Nissan’s boss, predicted that pure electric vehicles could make up 10% of the world’s market by 2020.