News - The Banker

The European Investment Bank (EIB) is providing €240m to three Nigerian banks for infrastructure projects, in a move that it is hoped will bolster confidence in the country's banking system.

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Argentina's president Cristina Fernández de Kirchner's decision to request central bank governor Martin Redrado's resignation has led to international investor concern about the monetary authority's independence. Mr Redrado refused to release $6.5bn in foreign currency reserves that Ms Fernández had ordered for a special fund to meet the country's rising debt obligations of $13bn, and the president took steps to replace Mr Redrado with Mario Blejer, who was central bank president in 2002.

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The International Finance Corporation (IFC), the World Bank's private sector arm, the European Bank for Reconstruction and Development and fund manager CRG Capital have announced the launch of the Central and Eastern Europe (CEE) Special Situations Fund to buy distressed assets in the region. It is hoped that the fund will raise €200m to buy distressed corporate assets in an attempt to aid recovery in CEE.

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Abu Dhabi, Dubai's oil-rich neighbour in the United Arab Emirates, is to bail out the emirate with $10bn to enable it to meet its immediate debt obligations and allow the payment of a $4.1bn sukuk bond related to Dubai World's real estate subsidiary, Nakheel. Dubai's government said that the remaining capital would be used to pay interest, contractors, suppliers and operating costs until the company reaches agreement with its creditors on the remaining portion of Dubai World's $26bn debt. Abu Dhabi has contributed more than $25bn in capital injections to Dubai this year.

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Changes in risk management are fundamental to the future of banking, according to the International Institute of Finance's (IIF) recently published report on reform in the financial services industry. The report, published in conjunction with Ernst & Young, identified a number of improvements, including strengthening board oversight and improved better management.

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Kazakhstan is to issue its first international bond issue in nearly 10 years as the government looks to strengthen its public finances and provide companies with a target benchmark as it returns to the international capital markets.

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The fourth ministerial conference of the China-Africa Co-operation Forum held in Egypt last month saw China reaffirming its ties to the African continent. Chinese premier Wen Jiabao offered $10bn in low-cost, concessional loans to African countries over the next three years to help build financial capacity, expand infrastructure and social programmes.

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Spanish giant Santander, the eurozone's largest bank by market capitalisation, has raised some $8bn after the flotation of its Brazilian subsidiary, Banco Real, in the world's largest listing this year. The bank will list under the name Santander Brasil.

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The world's largest bank by deposits, Japan Post, has unveiled plans to use its assets to spur regional development in Japan and expand into overseas lending.

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Bank of America Merrill Lynch has had a rough year.
Its CEO is being forced to retire, it is under intense regulatory scrutiny and senior investment bankers have left in droves. Yet it is holding up well in the league tables, and deal flow is looking pretty strong. Is Bank of America beating the odds and making a success of the acquisition?
Geraldine Lambe reports

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A new retail bank is set to be created by a team of London professionals, who are in talks to raise more than £100m ($163m) through a listing in the capital.

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The Nigerian central bank last month injected $2.6bn into five of the country's biggest banks and sacked their chief executives.

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Wall Street second-quarter results have placed Goldman Sachs and JPMorgan ahead of the competition thanks to profits that beat analysts' forecast.

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Global loan volumes plummeted to new lows in October, according to data provider Dealogic. At the same time pricing has reached record highs. Just $95bn worth of syndicated loans were signed in October, the lowest amount since January 2004. This compares with ­October 2007, when $423bn worth of loans were signed.

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Barclays Bank has sold Barclays Global Investors to Blackrock for $13.5bn. The deal makes the US firm the largest investment manager in the world with more than $2700bn in assets under management - although it is estimated that it will only have up to 5% market share in the highly fragmented industry.

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Nigeria has announced it will remove a ban on foreign takeovers of its banks, breaking the country's long-standing protectionism to open its financial services market to international competition.

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Signs that the economic gloom could finally be lifting emerged last month as financial stocks staged a minor recovery and some of the world's biggest banks hinted they wanted to repay government money.

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The world's sovereign wealth funds (SWFs) have been hit hard by the global financial crisis, soaking up losses of an estimated 25% in 2008, according to a report issued last month. Most of the pain was felt in the financial sector, after a calamitous year for banks.

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The controversial credit default swap (CDS) industry underwent its most significant development since the September collapse of Lehman Brothers, with last month's industry-wide movement to a new protocol designed to imp­rove the settlement of future credit events. Dubbed the CDS 'big bang' due to its immediate effect, the protocol standardises the global CDS contract as well as the North American CDS trading conven­­tions. It is thought Europe will move to the new conventions in due course.

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