The European Union has ended its recession with a second quarter growth rate of 0.3% led by a robust 0.7% gain in Germany and 0.5% in France, beating analysts’ expectations of 0.2% growth for the 17-nation bloc.
However, EU Economic Affairs Commissioner Olli Rehn warns tough economic reforms need to continue in order to make the growth sustainable.
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“A sustained recovery is now within reach but only if we persevere on all fronts of our crisis response… There is still a very long way to go before we reach our ultimate goal of a sustainable growth model that delivers more jobs,” Rehn says.
Commonwealth Bank cautious after record profit
Commonwealth Bank chief executive Ian Narev reported a record $7.8 billion full-year cash profit yesterday, but warned there are limited short-term risks in the economy.
The bank also declared a fully-franked dividend of $2, taking its total annual dividend up to $3.64, with Narev claiming uncertainty over Basel III banking rules and the potential surge in loans mean it cannot afford a larger payout.
“You can always try to get a bit of a short-term kick on the stock price by surprising people with the dividend,” Narev says.
“That will get unwound as soon as you go ex-dividend, then you’re left with weaker capital. We’d rather manage for the long term.”
Optus announces bill shock plan after June quarter revenue decline
Optus has announced a plan to reduce “bill shock” in a bid to lure customers following a decline in revenues during the June quarter.
While Optus reported a 7.7% increase in profits $167 million, overall revenues were down 5.3% to $2.12 billion and mobile revenue fell 6.1% to $1.34 billion.
Under its new plans, the telco will temporarily move customers to a higher plan rather than charge high excess usage charges if customers exceed their monthly quotas.
“Bill shock is going to become a bigger issue in the next few months. I say that because 4G is taking off and more customers are going through their (data) limits,” Optus chief executive Kevin Russell says.
The Dow Jones Industrial Average is down .73% to 15337.66. The Aussie dollar is up to US91.28 cents.