By Katherin Jones and Arno Schuetze FRANKFURT (Reuters) - The Federal Reserve Bank of New York has found serious problems in Deutsche Bank AG's DBKGn.DE U.S. operations, including shoddy financial reporting, weak technology and inadequate auditing and oversight, people close to the matter told Reuters. In a letter to the German lender's executives last December, a senior official with the New York Fed described financial reports produced by some of the bank's U.S. divisions as "low quality, inaccurate and unreliable", said one of the sources, who is familiar with the letter. The New York Fed, as the U.S. central bank's eyes and ears on Wall Street, directly supervises the biggest U.S. and foreign banks, partly through embedded regulators who go to work each day inside the banks. "The size and breadth of errors strongly suggest that the firm's entire U.S. regulatory reporting structure requires wide-ranging remedial action," the letter, first reported by the Wall Street Journal, said.
General Motors Co on Wednesday announced six recalls covering 717,950 vehicles in the United States for varying reasons. None of the recalls were related to the ignition switch issues that have caused nearly 15 million recalls of GM vehicles worldwide this year. The new set of recalls brings GM's recalls worldwide this year to nearly 30 million. Vehicles involved in the recalls announced Wednesday have been linked to two crashes, 3 injuries and no deaths, GM said.
PepsiCo Inc's PEP.N higher-than-expected quarterly profit could give the company more ammunition against an activist investor who wants it to separate its snack and beverage businesses. The maker of Pepsi-Cola and Frito-Lay snacks raised its full-year adjusted earnings forecast on Wednesday and said organic revenue grew 5 percent in its global snacks business, helped by strong sales of Lay's, Doritos and Cheetos chips. It also reported a 2 percent organic sales increase in its beverage business, which includes the Gatorade and Tropicana brands. The sales increases were partly a result of price hikes that PepsiCo implemented as it launched new products which usually command higher prices.
Boeing Co reported a 52 percent jump in quarterly profit, helped by higher commercial plane deliveries and one-time tax gains, but investors were spooked by rising costs in its military tanker program. Boeing's shares fell as much as 3 percent after the company said it took a $272-million charge related to its tanker program and maintained its 2014 cash-flow forecast. The stock was the biggest loser on the Dow Jones Industrial index, which was down 0.41 percent by midday on Wednesday. "To us it is worrying that Boeing is booking a charge of this magnitude at a relatively early stage in this long-term program, particularly given recent assurances from management that everything was going to plan, RBC Capital Markets analyst Robert Stallard wrote in a note to clients.