Dinallo defends monolines conduct
by Dave Nixon
Story link: Dinallo defends monolines conduct
Eric Dinallo, New York’s insurance watchdog, has defended his management of the bond insurer predicament, saying his decision to call in Wall Street’s top banks last month for discussions was an attempt to expose problems and not the oppressive intervention portrayed by critics.
Mr Dinallo rejected condemnation that he was focused on protecting municipal bond issuers [...]
UBS contacts bankers over chairman position
by Dave Nixon
Story link: UBS contacts bankers over chairman position
UBS has quietly contacted some of Europe’s zenith bankers to join its board of directors and ultimately replace the troubled Swiss bank’s incumbent chairman, Marcel Ospel.
The executives approached by headhunters acting for the bank consist of Bob Diamond, president of Barclays; Michael Cohrs, head of global banking at Deutsche Bank; and John Studzinski, Blackstone‘s [...]
GIB loses $757m from subprime exposure
by Richard Kilner
Story link: GIB loses $757m from subprime exposure
Yesterday the Gulf International Bank reported a loss of US$757.3m during last year, mostly due to the US subprime mortgage crisis.
The figures contrast sharply with the Bahrain-based firm’s 2006 performance, which saw it achieve profits of US$255.5m.
An extra billion dollars was injected into the bank’s share capital by its shareholders, the six member states of [...]
Indian banks HDFC and Centurion set to merge
by Richard Kilner
Story link: Indian banks HDFC and Centurion set to merge
India is poised to see one of the largest bank mergers in its history.
The Centurion Bank of Punjab is set to be taken over by HDFC Bank in an all stock deal.
The boards of the two banks will meet on Saturday to consider the merger.
Two days ago representatives from the two firms met in a [...]
Brazil becomes external creditor as international reserves rise
by Richard Kilner
Story link: Brazil becomes external creditor as international reserves rise
Brazil has enough reserves to pay off its debt both publicly and privately, the central bank of Brazil declared yesterday.
The country’s debt is outmatched by assets and international reserves to the tune of US$4bn.
The central bank has said that this is a first in Brazilian history, whereby the country had become an external creditor.
The present [...]
Carbon bank proposed by Brown
by Richard Kilner
Story link: Carbon bank proposed by Brown
An independent European carbon bank would assist the EU’s efforts to combat global warming and augment the Emissions Trading Scheme currently in place, according to Prime Minister Gordon Brown, speaking in Brussels.
Brown has also called for weathy nations to co-operate and assist poorer nations in their transition to low carbon economies.
The EU must be at [...]
Savings increase along with withdrawals
by Gill Montia
Story link: Savings increase along with withdrawals
Latest research from Birmingham Midshires, the mortgage lender, has revealed that more people now have, and are making use of, savings accounts.
Sixty-nine per cent of respondents to the survey reported that they are now saving regularly (a 3% rise on January 2007).
However, UK consumers are also spending more and widening an existing savings deficit.
Those questioned [...]
Sub-prime damage could exceed $500bn
by Gill Montia
Story link: Sub-prime damage could exceed $500bn
A leading financier has warned that the credit squeeze could run for longer and be more damaging than many people believe.
In November of last year, Guy Hands, head of private-equity firm Terra Firma, estimated that banks faced losses of £154 billion in connection with the US sub-prime mortgage crisis.
This week he has stated that: [...]
Northern Rock withdraws 125% mortgage
by Gill Montia
Story link: Northern Rock withdraws 125% mortgage
Northern Rock has joined other leading lenders in withdrawing its 125% mortgage.
The bank aims to secure its future by moving towards low-risk lending and reducing the size of its mortgage book.
However, the strategy of cutting back on lending has been questioned because it appears that post nationalisation, the bank will no longer own many of [...]
Lloyds TSB posts profit of £3.92bn
by Gill Montia
Story link: Lloyds TSB posts profit of £3.92bn
Lloyds TSB posted profit of £3.92 billion in 2007, representing a 6% rise on 2006.
The group surprised the market by reporting a mere £280 million loss in relation to its investments affected by the US sub-prime mortgage crisis.
The bank had previously estimated its writedown to be in the region of £201 milliion but an additional [...]
SocGen posts €3.3 billion fourth-quarter loss
by Gill Montia
Story link: SocGen posts €3.3 billion fourth-quarter loss
French bank, Société Générale (SocGen), posted a record net loss of €3.3 billion in the fourth-quarter of 2007.
The result comes in the wake of a scandal involving rogue trader, Jérôme Kerviel, and takes net profit down to €947 million for last year, compared with €5.2 billion in 2006.
During 2007, SocGen’s corporate and investment banking business [...]
Slowdown greater risk than inflation for UK
by Richard Kilner
Story link: Slowdown greater risk than inflation for UK
The Bank of England’s Monetary Policy Committee, the body responsible for interest rates, faces a continuing dilemma in 2008.
Officially the bank is directed to alter rates with its eyes firmly set on inflation.
However, in addition to inflationary pressures are fears of an economic slowdown, which would also be negative for British business.
Kate Barker, one [...]
More World Bank offices in China possible
by Richard Kilner
Story link: More World Bank offices in China possible
Local programmes in China funded by the World Bank could be augmented by the opening of new offices there.
David Dollar, the World Bank’s country director for China, has said that the organisation is actively exploring the option.
World Bank president Robert Zoellick visited China two months ago and spoke of the matter with Bo Xilai, Chongqing [...]
GIC sees profits despite subprime losses
by Richard Kilner
Story link: GIC sees profits despite subprime losses
The Gulf Investment Corporation has announced it is the latest financial institution to suffer a loss related to the subprime mortgage crisis.
The bank, which is based in Kuwait, has had to set aside $246m to cover potential losses.
Despite the large amount put to one side, it did still manage to turn a profit for 2007 [...]
A&L shies away from mortgages
by Gill Montia
Story link: A&L shies away from mortgages
Alliance & Leicester (A&L), which yesterday reported a 30% drop in 2007 profit, has warned that it will be turning away from the mortgage market in 2008.
The UK’s seventh-largest bank also said that it will not be competing strongly for savings business, leaving analysts wondering exactly what it will be doing in the coming months.
Last [...]
BMO facing $12bn outlay
by Dave Nixon
Story link: BMO facing $12bn outlay
Canada’s BMO Financial will make available up to US$12.2bn, or approximately 3 per cent of its assets, in liquidity support for two structured investment vehicles that it is looking to wind down.
The group, centred on the Bank of Montreal, will take C$490m in pre-tax charges on its exposure to ACA, the monoline insurer, and [...]
Subprime knock for Agricole
by Dave Nixon
Story link: Subprime knock for Agricole
Crédit Agricole, France’s major retail bank, is set to become the country’s biggest loser to this point from the US subprime calamity when it announces an added writedown to the €2.5bn ($3.7bn) already disclosed.
France’s third-largest bank by market value would not remark on Tuesday, but it is thought to be facing additional losses due to [...]
Ackman proposes to hive off municipal units
by Dave Nixon
Story link: Ackman proposes to hive off municipal units
William Ackman, hedge fund manager and fervent opponent of the bond insurers, has tendered to banks and regulators a scheme that would divide the companies’ businesses and overhaul their capital management.
Bond insurers, for instance MBIA, have been under inquiry due to of their exposure to uncertain structured products. Mr Ackman’s proposal would hive off the [...]
Deference might explain trading failure
by Dave Nixon
Story link: Deference might explain trading failure
An industry culture of esteem by risk managers to thriving traders might be one possible explanation for the failures that resulted in Credit Suisse marking down trading positions by $2.85bn this week, senior investment bankers said.
The Swiss bank was under increasing pressure on Wednesday to rapidly complete its review of how a small number of [...]
FSA supports new parents with money guide
by Gill Montia
Story link: FSA supports new parents with money guide
The Financial Services Authority (FSA) is to provide new parents with money advice packs that contain information on budgeting, benefits and the cost of childcare.
The Parent’s Guide to Money (PGM), which will be distributed by midwives to mothers in the early stages of pregnancy, will also contain information on maternity leave and Child Trust Funds.
The [...]
