Government to trim AIG stock holdings
WASHINGTON – The U.S. government says it plans to sell $4.5 billion worth of shares of American International Group stock, the latest effort to recoup taxpayer money spent on the largest bailout of the 2008 financial crisis.
The Treasury Department announced the fourth round of AIG stock sales Friday. The insurance company has indicated it intends to purchase up to $3 billion of the stock being offered in this sale.
Treasury and the Federal Reserve stepped in with $182 billion to rescue New York-based AIG from collapse in September 2008. AIG still owes taxpayers $30 billion on the initial investment. Treasury still owns about 61 percent of AIG’s common stock.
Treasury’s announcement Friday came a day after AIG announced in an earnings report that its net income rose 27 percent in the second quarter.
During the quarter, AIG repaid all of the loans it owed to the Federal Reserve as part of the financial rescue in 2008 and 2009.
Mortgage insurance deals under scrutiny
WASHINGTON – The government’s consumer finance watchdog is investigating deals that transferred billions in premiums charged to mortgage borrowers from mortgage-insurance companies to the banks that made the loans.
The deals amounted to kickbacks because the banks pressured insurers into them in exchange for a share of the banks’ mortgage-insurance business, according to civil lawsuits filed by borrowers and legal experts.
The Consumer Financial Protection Bureau has served subpoenas to American International Group Inc., MGIC Investment Corp., Genworth Financial Inc. and Radian Group Inc., the companies said in public filings this week. The CFPB asked for documents and answers to written questions about captive mortgage reinsurance deals, they said.
Procter & Gamble’s earnings top estimates
NEW YORK – Procter & Gamble Co. said Friday that its net income climbed 45 percent in its fiscal fourth quarter, boosted by the sale of its snacks division. Even without the impact of the sale, its earnings beat Wall Street expectations and the company said it was making progress with its cost-cutting plan and strategy to improve results by focusing on its most profitable categories.
The maker of Tide detergent, Crest toothpaste and other consumer goods also said Friday that it plans to buy back $4 billion in shares this fiscal year. That’s a reversal from June, when the company said it did not plan any share repurchases.
P&G has admitted missteps in pricing and balancing growth in emerging markets, which make up about 30 percent of its sales, with the realities of an uncertain global economy and lackluster market share growth.
AT&T sets end of 2016 for 2G network demise
NEW YORK – AT&T Inc. said Friday that the shutdown of its second-generation, or “2G,” wireless network will be complete by the end of 2016, a process that will force customers with older phones to upgrade to “3G” or “4G” handsets.
In a regulatory filing, the Dallas-based company said 12 percent of its customers on contract-based plans, or 8.4 million people, have 2G phones.
AT&T said it’s shutting down the older network, which doesn’t support high data speeds, city by city. It said earlier that the process has started in New York City.