US banks could see worst credit for generations
by Richard Kilner
Story link: US banks could see worst credit for generations
The US banking system is to see the worst downturn in credit for generations, according to Oppenheimer & Co’s analyst Meredith Whitney.
Whitney forecasts that the worst profit margins since 1990 will be seen, there will be massive defaulting on a variety of loans and the most dire housing crash since the Great Depression.
Earlier, Whitney correctly [...]
China may raise rates to tackle inflation
by Richard Kilner
Story link: China may raise rates to tackle inflation
China could see an interest rate rise in late March, in an effort to stave off inflation which is forecast to soar by as much as 8.7% in February.
The prediction comes from the Bank of China, which has also stated that the dire winter weather is still having a serious and negative effect.
Because of the [...]
Russia’s top bank expands into Shanghai
by Richard Kilner
Story link: Russia’s top bank expands into Shanghai
Yesterday saw Venshtorgbank, Russia’s biggest bank, open its first ever branch in China.
The branch is located in Shanghai, and is being seen as the first step in a new phase of financial relations between the two Asian countries.
Andrei Kostin, president and chairman of the Venshtorgbank Group, has described China as the most promising economy in [...]
BoE deputy on “largest-ever peacetime liquidity crisis”
by Gill Montia
Story link: BoE deputy on “largest-ever peacetime liquidity crisis”
The deputy governor of the Bank of England has warned of the consequences of slowing growth and rising inflation.
Speaking at the Institute of Economic Affairs in London, Rachel Lomax painted a bleak picture of the global economy, saying outlook has “changed dramatically” in recent months as a result of the credit squeeze and the increased [...]
HBOS puts profitability above market share
by Gill Montia
Story link: HBOS puts profitability above market share
HBOS has posted a 3% rise in underlying pre-tax profits, to £5.71 billion, for 2007.
However, the result is below market expectations of £5.76 billion and was accompanied by a warning of continued uncertainty in the financial markets.
New mortgage business increased 22% in the second-half of last year but the bank says it will be putting [...]
FSA head heralds end of cheap credit
by Gill Montia
Story link: FSA head heralds end of cheap credit
The head of the Financial Services Authority, Hector Sants, has warned that the UK’s era of cheap credit may be over forever.
Speaking on the BBC’s Today programme, on Radio 4, Mr Sants stated: “I don’t think markets are ever going to return to the way they were.”
Adding: “The idea that at some point they will [...]
Freight futures rush as funds seek sanctuary
by Dave Nixon
Story link: Freight futures rush as funds seek sanctuary
Freight derivative volumes have rocketed this year as banks and hedge funds have looked to a market that has not been influenced by the credit crunch or economic slowdown.
Freight forward contracts, which permit shipowners and operators to lock in prices in advance, grew 150 per cent over the past year as market instability and a [...]
Chinese banks lend to green projects
by Richard Kilner
Story link: Chinese banks lend to green projects
Over the course of 2007 China’s five largest banks offered a combined sum of over 100bn yuan (US$4.08bn) for loans aimed at green projects, the China Banking Regulatory Commission revealed today.
The CBRC has also stated that 2007 saw some 30 companies guilty of high pollution levels being financially blackballed, and refused credit from the big [...]
London Scottish posts £15.7m loss as bad debts hit £32.3m
by Gill Montia
Story link: London Scottish posts £15.7m loss as bad debts hit £32.3m
London Scottish Bank has posted a loss of £15.7 million for the 2006/07 financial year, having made a profit of £15 million in 2005/06.
The bank, which specialises in lending to low-income families and also operates as a debt collector, has experienced a sharp rise in bad debt with the result that losses are well beyond [...]
NAB sees upside of the credit crunch
by Richard Kilner
Story link: NAB sees upside of the credit crunch
The worsening credit markets has led to a positive aspect for Australian banks, according to John Stewart, National Australia Bank’s (NAB) chief executive.
Because of the credit crunch banks now have a surplus of business available with strong profit margins.
In recent times credit has been undervalued, but following the credit crunch there are now many customers [...]
Ithmaar Bank achieves record profits
by Richard Kilner
Story link: Ithmaar Bank achieves record profits
The Ithmaar Bank of Bahrain saw its highest ever profits in 2007.
Its net profits hit $188.3m, with operating income skyrocketing up to $339.5m, a rise of 173%.
The previous year had seen a net profit of $181.1m, though that included the selling of Islamic Investment Company of the Gulf (Bahamas) Limited for $105.5m.
Disregarding the one-off subsidiary [...]
NZ banks called on to assist students
by Richard Kilner
Story link: NZ banks called on to assist students
Bankers’ union Finsec and the New Zealand Union of Students’ Association have issued a combined message saying that students in financial difficulty need assistance to stay out of debt with crippling interest rates.
The two organisations have called on the banking industry in New Zealand to reconsider the services it offers to students.
Recent statistics have shown [...]
Gloomy forecast for Citigroup
by Gill Montia
Story link: Gloomy forecast for Citigroup
Leading Wall Street analyst, Meredith Whitney, is warning that shares in Citigroup, the world’s largest bank, could fall by more than one-third.
Ms Whitney has issued an investor note in which she cuts her 2008 earnings per share estimate from $2.70, to 75 cents.
She has also made it know that these revised estimates could prove [...]
Barclays Bank Kenya releases student credit cards
by Richard Kilner
Story link: Barclays Bank Kenya releases student credit cards
Barclays Bank Kenya has said that, as part of its growth programme, it is to create credit cards aimed at university students.
The firm will also offer transactional accounts to students.
According to the bank’s chief executive officer, Adan Mohamed, the latest plans are part of the footprint expansion programme begun last year.
Mohamed made the statement at [...]
Political unrest in Kenya could cause rate rises
by Richard Kilner
Story link: Political unrest in Kenya could cause rate rises
The continuing political instability in Kenya, caused by disputed election results and ensuing violence, could soon have direct and negative consequences for the nation’s banking systems.
Credit lines extended to Kenyan banks by international financial institutions could soon be curtailed, unless a political way forward is found soon, banking analysts warned on Wednesday.
Meanwhile, Kenyan banks themselves [...]
Credit crunch set to continue
by Richard Kilner
Story link: Credit crunch set to continue
Financial analysts believe that the credit crunch is set to rumble on for some time yet.
To date the credit crisis, caused by the US subprime mortgage crisis, has cost financial institutions around the globe $150bn.
However, Oppenheimer & Co in New York believe that this figure could leap by $75bn in the near future.
The reasoning [...]
US could suffer massive recession
by Richard Kilner
Story link: US could suffer massive recession
The US could see a major recession, according to analyst Nouriel Roubini, of the Stern School of Business of New York University.
There is now a consensus that the US will see a slowdown and probably a recession in the near future, but Roubini predicted this as far back as mid-2006, when his position was in [...]
RBS results could spark disposals
by Gill Montia
Story link: RBS results could spark disposals
Royal Bank of Scotland (RBS) is expected to write down over £1 billion in US sub-prime-related losses, when it reports its full-year results on Thursday of this week.
At the same time, the bank is expected to increase its dividend in an attempt to calm fears about its capital ratio, that is its ratio of [...]
HBOS supports financial management project
by Gill Montia
Story link: HBOS supports financial management project
HBOS’s charitable foundation is funding a £300,000 three-year project to help young people manage their finances and avoid getting into serious debt.
The Citizens’ Advice Bureau (CAB) and YouthNet will use the grant to target young people aged 16 to 25 via web content, podcasts and mobile phones.
The charities hope to reach a million young people [...]
Competition Commission demands annual statement of charges
by Gill Montia
Story link: Competition Commission demands annual statement of charges
The Competition Commission is proposing that customers of UK banks should receive an annual summary of charges and interest payments.
The commission has completed a two year investigation into whether bank customers in Northern Ireland are being treated fairly.
The review means that by October of this year banks in the province will be obliged to act [...]
