Daily Brief - 10 May 2024

UBS granted more time to respond in Credit Suisse bond loss case

UBS Group AG's lawyers have successfully obtained another extension, until June 3, to prepare their response regarding a lawsuit. This case involves investors who lost $17 billion from the wipeout of Credit Suisse Additional Tier 1 (AT1) bonds last year.

The Swiss court agreed to the delay after the legal team needed more time to review a large number of documents and switch their submissions to Italian. The ongoing legal tussle concerns AT1 bonds, designed as financial safety nets for banks, which usually convert into equity or take losses to help a bank in trouble.

The extension continues the uncertainty for investors unhappy with how they were treated during UBS's rescue of Credit Suisse.

Barclays CEO confirms investor support for new strategy as shares soar

Barclays Plc's CEO, C.S. Venkatakrishnan, shared at a shareholder meeting in Glasgow that the substantial rise in the company’s stock price reflects investor confidence in its new strategy. Since February, Barclays’ stock has increased by over 40% following the announcement of their focus on the UK market and maintaining a global investment bank presence.

Venkatakrishnan highlighted the importance of consistently proving their dedication to the outlined growth and rebalancing plans. Additionally, Barclays aims to boost profits by cutting costs and has promised significant capital returns to its investors in the upcoming years.

The bank also faces ongoing challenges, including investor queries about its Wall Street operations and external pressure regarding its environmental and social impacts.

Poland maintains interest rate at 5.75% for the seventh consecutive month

Poland's central bank has decided to maintain its benchmark interest rate at 5.75% for the seventh consecutive month, a move that aligns with economic predictions and reflects ongoing worries about potential inflation spikes.

After a slow economic recovery and the largest fall in industrial output in nearly a year, the rate remains unchanged as inflation is still within the acceptable range. Governor Adam Glapinski emphasizes the importance of cautious monetary policy, especially with looming uncertainties like the possible removal of energy price caps and higher food taxes, which could push inflation rates higher.

While some policymakers suggest future rate cuts, they prefer to wait until the impacts of phasing out current fiscal measures are clearer. The decision has had minimal effect on the Polish zloty, showing slight strength against the euro.