Moody’s Investors Service said its outlook for the U.S. banking industry remains negative, as low interest rates and tepid economic growth will continue to hurt banks’ finances over the next 12 to 18 months.
The rating agency also said in a report issued Tuesday that uncertainty over a plan to reduce the federal budget deficit as well as the debt crisis in Europe create a difficult environment for U.S. banks.
Moody’s has raised its credit rating outlooks for most U.S. banks to stable from negative since early 2010 as banks have increased their cushions against losses. But Moody’s said problems in the broader economy override that, as banks still carry many loans prone to default on their books and gains could be reversed if the economy turns downward.
Moody’s warning follows recent data on banks from the Federal Deposit Insurance Corp. that adds to evidence that the industry is strengthening four years after the financial crisis.
But regulators warn of the potential negative effect on the U.S. economy and banks from the European debt crisis
Campbell Soup profit up on turnaround talk
Campbell Soup is preparing to flood supermarket shelves with dozens of new products in the year ahead, but the push to revive its mainstay soup business isn’t expected to pay off anytime soon.
The Camden, N.J., company, which also makes Pepperidge Farm cookies and V8 juices, said Tuesday that it expects the vast majority of its sales growth in fiscal 2013 to come from its recent acquisition of Bolthouse Farms, which is intended to position the company in the faster-growing premium juice market.
Campbell Soup aid it earned $127 million, or 40 cents a share, for the period ended July 29.
In the year ago period – when the company was weighed down by restructuring charges – it earned $100 million, or 31 cents a share.
Drugmaker to shed 1,100, 10% of workers
German drug maker Merck KGaA will eliminate one out of every 10 jobs in its home country.
Merck said Tuesday it would cut 1,100 of the 10,900 positions in its home country. It signed an agreement with employee representatives about the cost cuts.
The company will try to find the cuts through either not filling the posts of people who leave or workers opting to take early retirement.
Merck has suffered development and marketing setbacks including the abandonment of its multiple sclerosis drug Cladibrine after it was rejected by EU regulators and questioned by the U.S. Food and Drug Administration.
Merck KgaA has 40,000 workers in 67 countries. It’s a different company from U.S.-based Merck & Co.
Hyundai Motor union OKs deal, ends strike
Hyundai Motor’s labor union has voted to accept a deal for increased wages and the elimination of overnight shifts, ending one of the costliest strikes ever at South Korea’s largest car maker.
The union, which elected a hardline leader at the end of last year, walked out on July 13, starting the first strike at Hyundai in four years. The union staged walkouts that totaled 92 hours in July and August. That resulted in lost output of 82,000 vehicles worth $1.5 billion, according to the company.