Business Briefs

Puma posts record profits

German sportswear and equipment maker, Puma AG announced on Wednesday that its first-quarter pre-tax profit had more than doubled. The firm, Germany’s second biggest sporting goods firm after Adidas-Salomon, raked in €72.1 million ($ 79.17 million), up from €33.1 million a year ago. The profits have prompted the company to raise its 2003 earnings forecast as fashion-conscious shoppers snap up its trendy sportswear. "Puma continued its powerful performance and acheived its strongest quarter ever," the company said in a statement. Puma’s sales were boosted by a 60 percent increase in Europe, its key market as the company consolidated its niche position between sports and fashion.

Finance minister warns on budget deficit

German Finance Minister Hans Eichel warned on Wednesday that Germany would have to revise its public deficit forecasts on account of a worsening budgetary situation. "Conditions have deteriorated sharply," Eichel told the Handelsblatt daily. He was responding to a question about Germany’s ability to reduce its public deficit to below 3.0 percent of gross domestic product, the ceiling set by the European Union's Stability and Growth Pact. Officials confirmed on Tuesday that Germany’s budget for 2003 would need to be thoroughly overhauled amid lower-than-expected tax revenues and higher than forecast unemployment. Revenues for the federal and state governments and local authorities were 2.9 percent below the corresponding period last year. The poor figures have increased the chances of Eichel being obliged to draw up a supplementary budget for 2003.

Banks’ loan initiative seen boosting growth

The German Finance Ministry said on Wednesday that plans by the country’s leading private banks to offload billions of loans on the bond market will stimulate Germany’s economic growth and employment. "The planned securitizing of bank assets is aimed at strengthening the capital base of credit institutions and will give more room for lending and therefore will be of benefit to small and medium-sized companies' financing," the ministry said in a statement. The banks involved are Deutsche Bank AG, Commerzbank AG, Allianz AG’s Dresdner Bank, HVB Group AG and DZ Bank. Along with state-owned bank, Kreditanstalt für Wiederaufbau, the five have announced a joint venture to issue asset-backed securities. Germany’s small-to medium-sized companies, which form the backbone of the country’s economy, have been in financial doldrums for months because banks are reluctant to lend at a time when insolvencies are on the rise. Insolvencies reached a record high of 37,700 in 2002, up 16.4 percent from the year before.