Samsung slashes Q3 profit estimates

SEOUL • Samsung Electronics cut its third-quarter operating profit estimates by US$2.3 billion (S$3.2 billion) after ending production of its Galaxy Note 7 smartphones, the first official indication of how much the crisis will cost South Korea's largest company.

Profit is projected to be 5.2 trillion won (S$6.8 billion) instead of 7.8 trillion won in the three months ended September, the firm said in a statement yesterday. That effectively erases all the mobile business profit analysts had projected. Revenue will be 47 trillion won instead of 49 trillion won.

Samsung is struggling to contain fallout from the Note 7 phones, which were overheating and catching fire even after a recall to fix the problem.

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Banks to get more time to phase in loan rules

VIENNA • Banks should be given three to five years until new accounting rules for loan losses have an impact on regulatory capital, said the Basel Committee on Banking Supervision.

Accounting standards that require banks to set aside money for expected bad-loan losses will enter into force in 2018 in most of the world, and in 2020 in the United States.

While the committee said it welcomes the change in principle, it also said banks may have to raise provisions as a consequence and thus should be given more time to phase them in. "The committee currently sees the primary objective of a transitional arrangement as being to avoid a 'capital shock' by giving banks time to rebuild their capital resources," it said.

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