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MAIN NEWS:Treasury gives unprecedented support to Fannie and Freddie
The US Treasury has offered a package of unprecedented support to failing mortgage groups Fannie Mae and Freddie Mac. The package includes an exceptional extension of the Federal Reserve’s supervisory authority over them.
Terry Baker-Self (1945-2008)
Terry Baker-Self was the driving force behind The Banker’s bank listings for almost a decade. There was little Terry didn’t understand about bank accounts and the intricacies of the Basel capital requirements. Under his leadership, the Top 1000 ranking became the foremost information source for the industry. Sadly Terry died, after a long battle with cancer, shortly before the publication of this year’s listing.
SIEMENS FINANCIAL SERVICES REPORT: Putting capital to work
SFS report identifies frozen capital in private sector business.
Latest Top 10 Banks China listing from The Banker
ICBC heads the latest listing of the Top 10 banks in China. But while the order of the first five banks remains the same, the smaller banks are shifting. In The Banker’s revised Top 10 listing, China CITIC Bank moves into 6th place from 8th place following a 163.4% increase in Tier 1 capital to $11,217m, forcing China Merchants Bank and China Minsheng Banking Corp down the table.
Main news: Barclays shores up capital to offset losses
Barclays has announced a plan to sell £4.5bn ($8.8bn) of shares to a mixture of foreign investors to boost depleted capital.
Arnold injects more capital into UBS
Luqman Arnold
Luqman Arnold, founder of Olivant and former chief executive of UBS, has increased the group’s stake in the Swiss bank to 2.5%, demonstrating its confidence in UBS’s potential. The capital injection does not come without criticisms, however, as the activist investor has not diminished its calls for UBS to reform.
RETAIL BANKING RESEARCH STUDY: The future for PoS interchange fees
RBR study investigates landscape of PoS interchange fees; Celent report identifies concerns about SEPA progress.
MAIN NEWS: Westpac bid for St George raises prospect of giant
Australia’s Westpac Banking has approached St George Bank with a takeover offer in a deal that would mark the biggest shake-up of the Australian banking sector in years and would create the country’s largest financial services company by market capitalisation, with a combined value of about A$65bn ($61bn).
Azar takes sovereign wealth role at Lehman
Heavyweight clients call for heavyweight services. In an effort to demonstrate commitment to serving state-owned investment institutions, Lehman Brothers has created the role of global head of sovereign wealth funds, filled this month by Makran Azar.
Banking sector bolsters Luxembourg economy
The economy of the Grand Duchy of Luxembourg relies heavily on its financial sector, as it contributed approximately 30% of gross domestic product in the last fiscal year.
CSFI REPORT: BANKING BANANA SKINS
CSFI report identifies the biggest risks facing banks; Deloitte report looks at the cost of financial services regulation.
MAIN NEWS: CIC and JC Flowers sign private equity fund deal
The China Investment Corporation (CIC), the country’s $200bn sovereign fund, has signed a deal with JC Flowers to start a $4bn private equity fund to focus on investment in US financial assets.
Paulson leads fund manager earnings list
Hedge fund manager John Paulson has come out on top in the list of the 100 top-earning fund managers,compiled by Trader Monthly magazine, with a record-breaking $3bn in earnings last year, according to reports. Big bank CEOs’ loss was hedge fund managers’ gain in the US subprime crisis.
IIF INTERIM REPORT: MARKET BEST PRACTICES and STANDARD & POOR’S: SMALL EUROPEAN SOVEREIGNS
IIF interim report reviews market best practices, while Standard & Poor’s report looks at small European sovereigns.
Morocco loans still strong
Moroccan banks have achieved strong growth in their loan books in recent years. Bank Al-Maghrib, the central bank, reports that total credit in the banking sector grew 17.7% to Dh327,357m ($38,708m) in 2006, the last complete year for which figures are available, following on 2005’s 12.5% growth.
MAIN NEWS: JPMorgan buys out Bear Stearns for $236m as subprime crisis claims another victim
The board of directors of Bear Stearns, one of the US’s largest investment banks, agreed to be bought by rival JPMorgan for $236m in shares in a deal that puts an end to Bear’s 85 years of independence and highlights the risks faced by banks during the credit crisis.
Rohner under pressure to split UBS
Tough times for bankers. UBS chief executive Marcel Rohner is under pressure to split the investment banking and wealth management arms of Europe’s second largest bank as this is touted as the best solution to the $18bn writedown that it has taken on mortgage securities.
UK top six results defy doom-mongers’ predictions
In spite of dire prognostications about the state of UK banking, the top six banks have emerged from the reporting season, if not unscathed, in pretty good shape.
CAPGEMINI,ING AND EFMA REPORT: WORLD RETAIL BANKING
Capgemini, ING and EFMA identify trends in world retail banking; Finalta and EFMA reveal growing focus on SME banking.
MAIN NEWS: European giants eye bid for troubled Société Générale
The unauthorised trades that cost Société Générale about €5bn ($7.2bn) have opened the bank to a possible takeover, with the names of several European banks being touted as potential acquirers.
Buffet to launch bond insurance firm
After eyeing the US municipal bond market for some time, Warren Buffet, the billionaire investor at the head of Berkshire Hathaway, is launching a new bond insurance firm thanks to the troubles of the sector’s main insurers. An industry’s nightmare is an investor’s dream.
Big five US banks record fourth-quarter downturn
Any hopes of Q4 results helping to restore the battered fortunes of the top five US banks were dashed as a further wave of bad news from the economy and escalating fall-out from the subprime crisis hit confidence.
BUSINESS MONITOR INTERNATIONAL REPORT: CHINA – WHAT IF WE ARE ALL WRONG?
BMI assesses the ramifications if China’s growth slows, and Deutsche Bank identifies a funding gap in microfinance.
MAIN NEWS: Huge losses spark dramatic shift in international finance
The beginning of 2008 may be remembered as the time that the dynamics of international finance shifted dramatically as the sovereign wealth funds of a handful of developing economies rode to the rescue of some of the developed world’s largest financial institutions.
Canadians’ capital building gives immunity from US
With mayhem in the banking sector in the US, the Canadian banks that have reported at their financial year end, October 31, 2007, appear to be sailing serenely on.
IIF REPORT: GLOBAL ECONOMIC & CAPITAL MARKETS FORECASTS 2008
IIF predicts global slowdown but no US recession, and MGI finds combined European markets are reaching US scale.
MAIN NEWS: Latin America’s Bank of the South opens for business
Seven Latin American presidents have inaugurated the Bank of the South, which starts operations this month. The regional bank was created amid a widespread perception in South America that adjustment policies imposed by multinational agencies have failed.
Citigroup names new chief executive
After a search that lasted more than a month, Citigroup has found its new chief executive. Former head of the bank’s institutional clients group Vikram Pandit faces major challenges in reviving Citigroup, which, even before the credit crisis, was under pressure to show faster revenue growth. Win Bischoff has been appointed as non-executive chairman.
Profits at Japan’s top six banks down a third on 2006
The six major Japanese bank groups posted a total profit of ¥1513.9bn ($13.2bn) before tax and minority interests for the half year to September 30, 2007, down 33.5% from ¥2274.8bn in the same period in fiscal 2006.
REPORTS
Oliver Wyman highlights opportunities created by climate change while Celent assesses Chinese and Indian ATM markets.
MAIN NEWS: Tight-lipped British banks fuel rumour mill over losses
As British banks look forward to next February’s reporting season, analysts have one request. They want the banks to ‘come clean’ as quickly as possible about the black holes that many fear lurk in their trading books.
NYSE’s Thain new head of Merrill Lynch
John Thain, NYSE Euronext
John Thain, chief executive of NYSE Euronext, is to be the new chairman and chief executive of Merrill Lynch, as Stan O’Neil leaves the bank following heavy losses in the subprime mortgage meltdown.
European banks jostle in relatively unbanked Ukraine
The announcement, as The Banker went to press, that Sweden’s SEB Group had signed an agreement to acquire 97.25% of Factorial Bank in Ukraine was the latest in a line of such acquisitions by European banks from outside the country.
IIF REPORT: CAPITAL FLOWS TO EMERGING MARKET ECONOMIES
IIF predicts record investment in emerging markets, while Standard Chartered warns over clashes with sovereign funds.
MAIN NEWS: China’s Citic keen on stake in ‘bargain’ Bear Stearns
China Citic Group, the overseas investment banking arm of the Chinese government, has announced its interest in acquiring a stake in Bear Stearns, the New York-based bank that has been severely hit by the troubles in the US subprime market. The interest highlights the growing ambitions of Chinese financial companies.
Libya opens door to foreign banks
Just as The Banker was going to press it was announced that BNP Paribas had taken a 19% stake in Libya’s Sahara Bank and with that stake acquired management control.
CELENT STUDY: MOBILE BANKING VENDORS TACKLING THE TECHNOLOGY-DISTRIBUTION TRADE-OFF
Celent study looks at mobile banking vendors while IFAD & IADB examines the burgeoning remittance market.
Main News: Standard Chartered to buy Amex Bank
Emerging markets specialist Standard Chartered has agreed to buy the banking unit of American Express (AEB) for about $860m, gaining branch licences in India and Taiwan and adding wealthy clients to its newly launched private banking operation. The acquisition will also double Standard Chartered’s dollar-clearing business.
Bumper yields in SE Europe
South-east Europe (SEE) is one of Europe’s fastest-growing and most profitable banking regions and looks set for continued strong growth.
COMMITTEE FOR ECONOMIC DEVELOPMENT (CED): REDUCING RISKS FROMGLOBAL IMBALANCES
Committee for Economic Development highlights global imbalances while S&P scrutinises corporate default trends.
MAIN NEWS: HSBC enters talks to emerge as frontrunner in the race to acquire Korea Exchange Bank
HSBC has entered negotiations to buy a 51% stake in Korea Exchange Bank from US private equity group Lone Star for more than $5bn.
Morgan Stanley to offer Carbon Bank service
Simon Greenshields,Morgan Stanley
Taking advantage of clients’ demand for carbon neutral strategies, Simon Greenshields, managing director and global head of power at Morgan Stanley, will oversee the development of a “Carbon Bank” service.
Foreign bankers impressed with Egypt’s reform process
National Bank of Kuwait’s (NBK) winning tender bid last month to buy Egypt’s Al-Watany Bank for $516m reflects not only NBK’s regional expansion strategy but also growing confidence in the Egyptian banking system.
MAIN NEWS: BA-CA buys majority stake in Ukrsotsbank
Bank Austria Creditanstalt (BA-CA) has agreed to acquire approximately 95% of Ukrsotsbank (USB) in a deal that will further strengthen the presence of the Austrian bank’s parent, UniCredit, in Ukraine. UniCredit already has two subsidiaries in the country, HVB Ukraine and UniCredit Bank.
Rohner replaces Wuffli
UBS stunned the financial markets in July by replacing chief executive Peter Wuffli, who has presided over a remarkably successful period at the Swiss bank, with Marcel Rohner, one time head of UBS’ wealth management business.
Kenya’s crowded banking sector ripe for consolidation
Forty-one banks in the Kenyan banking system (plus three non-bank financial institutions and a building society) at the end of 2006 seems rather a lot, given that Tier 1 capital for the top bank in the country was only 12,375m shillings ($178m) at the financial year end.
MERRILL LYNCH & CAPGEMINI: 11th WORLD WEALTH REPORT
Wealth Report analyses rise of the HNWIs and KPMG Forensic reports on the rise in anti-money laundering costs.
MAIN NEWS: Shareholders force ABN AMRO to set up sale talks
It has been an eventful month for Dutch bank ABN AMRO. A group of shareholders attacked the bank, calling for an end to its acquisition campaign and suggesting it spin off some divisions or put the whole bank up for sale. And a possible buyer did not wait long before knocking on the door.
Jarai picks up central bank governor accolade
Hungary’s central bank governor Zsigmond Jarai (left) accepts the award for Central Governor of the Year, Eastern Europe, for 2006 from The Banker’s editor-in-chief, Stephen Timewell.
Reports
KPMG highlights the growth of China’s consumer banking markets while Mercer Oliver Wyman outlines the benefits that can be derived from Basel II implementation beyond simple regulatory compliance.
MAIN NEWS: London opens secondary market for Islamic bonds
London has established the world’s first secondary market for trading shariah-compliant Islamic bonds. Such bonds, also known as sukuk, are structured to pay profits from an underlying business rather than from interest, which is prohibited under Islamic law because the creation of money from money is considered sinful.
Fundanga decorated as central banker
The Governor of the Bank of Zambia, Dr Caleb Fundanga (left) receives his awards for both Global and African Central Banker of the Year from The Banker’s editor-in-chief, Stephen Timewell, at a ceremony with president Levy Mwanawasa at the State House in Lusaka.
US banks outwit sourpusses
Noel Coward once wrote a song called ‘There are bad times just around the corner’, although I doubt he had the US economy in mind when he wrote it. However, as far as the US is concerned, in spite of the prognostications of many, the ‘corner’ has yet to be reached.
REPORTS
Mercer Oliver Wyman highlights the strong performance of global financial services, particularly in emerging markets, while the World Bank names and shames those individuals it has sanctioned for fraud and corruption.
MAIN NEWS: Taiwan’s top regulator shoulders political blame for run on The Chinese Bank
Taiwan’s chief financial regulator has resigned in the wake of a three-day run on a private bank, following the sudden collapse of its parent conglomerate and the flight of its founder to China.
IIF REPORT: NET PRIVATE CAPITAL FLOWS TO EMERGING MARKETS
IIF forecasts a fall in private capital inflows into emerging markets; the IMF assesses foreign influence on Chinese banking.
Putin follows enlightened view
In contrast with Russia’s ‘iron fist’ reputation in the oil industry, president Vladimir Putin has expressed market-enlightened views about the country’s banking sector, simplifying foreign ownership rules.
MAIN NEWS: BNY and Mellon will become custody giant
After eight years since their first talks, Bank of New York and Mellon Financial have finally decided to tie the knot. The deal, technically a merger, would create the world’s largest custodians of financial assets and a leading asset management firm.
Australia makes emissions gesture
In a new year's resolution, Australian prime minister John Howard, who refused to ratify the Kyoto Protocol, has charged a taskforce with finding a global emission trading system that the country would find acceptable.
SUNGARD/TRADE TECH: Opinions vary on effects of MIFID
Sungard/Trade Tech report finds mixed views on MiFID benefits while CreditSights study reveals M&A fillip of IFRS.
MAIN NEWS: Foreign banks take stakes in Brazil
Even with the cool season at its door, Brazil is hotter than ever – at least in banking terms. The past month has seen two of the biggest international banks taking stakes in Brazilian financial institutions, reflecting the country’s growth in both commercial and investment banking markets.
