BP Group Chief Executive Tony Hayward (l) discusses the oil spill clean-up operation with a US Coast Guard officer, May 2010. The 53-year old Hayward announced plans to resign on Monday.

British oil giant BP today reported a record loss after taking a $32.2bn charge for the Gulf of Mexico oil spill, the worst in modern US history. The company has appointed American, Robert Dudley, as the CEO.

The second-quarter net loss of $17.2bn compared with a profit of $4.39bn in the year-earlier period. Chief Executive Officer Tony Hayward has resigned and Robert Dudley, who joined BP via a takeover in 1998,  will succeed him on Oct. 1st.

In reporting second quarter results, BP revealed that it is taking a charge of $32.2bn to reflect the impact of the Gulf of Mexico oil spill, including costs to date of $2.9bn for the response and a charge of $29.3bn for future costs, including the funding of the $20bn escrow fund. The company will  also tell analysts later today that it plans to sell assets for up to $30bn over the next 18 months, primarily in the upstream business, and selected on the basis that they are worth more to other companies than to BP. The firm said this portfolio high grading will leave the company with a smaller but higher quality Exploration & Production business.

Meanwhile BP said it continues to access new business opportunities, with new agreements in Azerbaijan, Egypt, China and Indonesia announced since the end of the first quarter.

The company said it was taking a prudent approach to managing the balance sheet and its financial liquidity, in order to ensure that BP has the flexibility to meet all of its future financial obligations. As a result it plans to reduce its net debt level down to a range of $10-$15bn within the next 18 months, compared to net debt of $23bn at the end of June. Group capital spending for 2010 and 2011 will be about $18bn a year, in line with previous forecasts.

“With the leak now capped we have reached a significant milestone,” said Tony Hayward. “This provides a firm basis for moving forward to reshape the company. By disposing of assets worth more to others than to BP we can better align our strategic footprint with our global strengths.”

“We expect we will pay the substantial majority of the remaining direct spill response costs by the end of the year. Other costs are likely to be spread over a number of years, including any fines and penalties, longer-term remediation, compensation and litigation costs,” Hayward said.

The embattled BP chief was severely criticised in the US for his handling of the crisis that followed an April 20th explosion and fire on the Deepwater Horizon drilling rig that killed 11 people and unleashed the oil spill which was only stopped this month.

Discussing whether Bob Dudley is the best choice to succeed Tony Hayward as BP's CEO, with T. Don Stacy, former CEO, Amoco:

The new CEO Robert Dudley, who had been CEO of BP's Russian joint venture, TNK-BP, until 2008, has to persuade US lawmakers to allow BP resume drilling in the  US

The US operations account for 40% of the company's asset base but has been the location of three disasters in the space of five years - - a fatal blast at a Texas refinery in 2005, an oil spill in Alaska in 2006 and now the Deepwater Horizon incident.

BP chairman Carl-Henric Svanberg said: "The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired.

"The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident. BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world's energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board.

"We are highly fortunate to have a successor of the calibre of Bob Dudley who has spent his working life in the oil industry both in the US and overseas and has proved himself a robust operator in the toughest circumstances," Svanberg said.

Hayward will remain on the BP board until November 30, 2010. BP also plans to nominate him as a non-executive director of TNK-BP. BP said that under the terms of his contract Hayward would receive a year's salary in lieu of notice, amounting to £1.045 million.

BP's share price rose almost 5% in London.

Finfacts article, June 11, 2010 article; Day 52: BP is US Public Enemy No. 1; Wall Street should be the world's

The Spanish banking system was the most tested of all the EU nations with 95% of lenders going through stress tests. Jorge Gil from Confederación Española de Cajas de Ahorros and Jose Carlos Diez from Intermoney spoke to CNBC Monday:

Capital spending Budget unchanged in 'new' plan: Davy chief economist, Rossa White, comments  -- "The Irish government outlined a capital spending framework until 2016 to replace the now-defunct National Development Plan 2007-2013. This 'new' plan restates the Budget 2010 target of €28.4bn in voted capital spending (i.e. directly controlled by government) in 2010-2014. It adds two more years of spending of €5.5bn, matching the 2011-2014 slated annual expenditure. But spending could actually be a touch lower (up to €800m) in 2010-2014 under this plan: from 2012, a 'Capital Reserve Fund (CRF) was set up to be paid out of the annual budget. This will be used "to finance emerging investment priorities which may arise over the medium term (but only if these)…produce demonstrable net benefits to the state". Notwithstanding that caveat, investment will amount to a healthy 4% of GNP per annum in the early years.

On the face of it, spending is much lower under this plan than the last six-year outline. That totalled about €75bn compared with €39.4bn this time. There are four main reasons for the difference in the size of the plan. First, the latest initiative focuses on direct exchequer spending only, whereas the last one included all forms of capital spending. This one does not incorporate PPPs or semi-state companies' expenditure. That separately adds up to €3bn to annual spend. In effect, total infrastructure spending is higher than the narrow definitions of this plan. Second, the previous plan was announced in January 2007. Since then, nominal GNP has collapsed by 25% and the economy's potential growth has been structurally impaired. Third, tender prices have declined by more than 30%, which underpins the volume of activity at lower cost. Fourth, Ireland's structural budget deficit widened, which has imposed tight fiscal constraints.

It is positive that the Budget targets for capital spending have not been cut in the short term: the 2010 and 2011 estimates are unchanged. The bottom-line for 2012-2014 – €5.5bn per annum – is identical to what was revealed last December, albeit with the inclusion of the CRF. Remember that the capital spending programme is Ireland's discretionary fiscal stimulus. It is vital that it is well-targeted but safeguarded. The construction industry is set to shrink towards €10bn by next year as a result of the disappearance of most private activity. It would be a shame to lose skills or to allow them to atrophy. In that context, and to boost the Irish economy's potential, maintaining a solid level of state infrastructure expenditure is critical."

Richard Branson, founder of Virgin Group, is optimistic that the global economy will not be faced with a double-dip. He speaks to CNBC's Oriel Morrison about Virgin Money's new Australian venture and the company's stake in Virgin Blue:

Economic View: Ireland’s new capital investment programme; Goodbody economist, Juliet Tennent, comments  - - "A new spending plan was announced by the Government yesterday. The original National Development Plan covered the 2007 to 2013 period and was based on an assumption that economic growth would average 4-4.5%. It provided for €184bn in current and capital spending over the period. Since then the macro economic picture has altered substantially with GDP falling 14% since Q407, decimating public finances and making the original plan unfeasible.

The revised plan puts detail on the capital spending budget of €39bn for 2010 to 2016 announced in the December 2009 budget. In that budget €6.4bn was made available for 2010 and provisions for €5.5bn each year from 2011. Despite calls from the construction industry for the maximum spend possible, outlays on infrastructure projects have been cut by up to 40% compared to the original plan. The Government does, however, believe that the significant drop in construction tender prices means that they can achieve more for less. The lion’s share of the budget goes to Transport, which receives 32.3% (€12.1bn) of the 2010-2016 budget. The surviving projects include Dublin metro and Dart underground. Other investment will be concentrated in Environment Heritage & Local Government, which includes social housing & water services, (22.7%/€8.5bn), Education & Skills (11.2%/€4.2bn) and Enterprise, Trade & Innovation (10%/€3.7bn)."

Deutsche Bank: Germany's biggest bank, Deutsche Bank, today reported a second-quarter net profit of €1.2bn, up from €1.1bn the same time a year earlier.

The improvement partly resulted from consolidated activities from new acquisitions and sharply lower quarterly provisions for credit losses, which dropped from €1bn to €243m, thw bank said.

Net revenues for the banking group dropped in the second quarter, however, to €7.2bn from €7.9bn in the same period of 2009.

The bank said it had core capital equivalent to 11.3% of total assets. In stress tests conducted on 91 major European banks, the required ratio was 6% when taking into account a hypothetical economic recession along with sharp losses on loans and investments in stocks and government bonds.

Deutsche Bank said its sovereign debt holdings, include €1.01bn in exposure to Spain, €8.14bn in exposure to Italy and €1.09bn to Greece.

On Monday, the Dow rose 101 points or 0.97% to 10,525.

The S&P 500 added 1.12% and the Nasdaq advanced 1.19%.