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RBS can sell credits for 8 billion dollars

admin — Mon, 25 Aug 2008 09:25:12 +0000

Yesterday Financial Times (FT) has informed that the second-largest bank of Great Britain Royal Bank of Scotland (RBS) sells to funds of direct investments Apollo, TPG and Blackstone credits for 8 billion dollars. Bank’s mass-media representatives do not make comments on this information. Analysts mark, that the transaction can be a part of strategy of bank within the limits of which it from the beginning of year has reduced actives on 200 billion dollars.
According to FT sources, RBS sells a part of the credits portfolio for the repayment of the companies. Thus, according to Blackstone’s President buyers of credits can receive the 30 percent income on the transaction as the credits, which have fallen in price because of crisis. Investment division Blackstone GSO Capital is one of participants of the transaction, however, its concrete conditions while are unknown.
Thus if the transaction will prove to be true, it will become one more step in strategy of bank on reduction of the actives, which it realizes after purchase of Dutch bank ABN Amro.

Credit crisis has come to Asia

admin — Mon, 18 Aug 2008 09:24:19 +0000

The majority of the Asian economies have practically not suffered from August crisis of credits of subprime level. As the American financial system tried to recover from summer crash, the Asian companies enjoyed stable profits and increased manufacture.
However, recently business in this region does not go well. Economists mark, that in June, 2008, volume of export from the countries of Asia has sharply gone on recession, testifying that credit crisis has come to the Asian states.
The chapter of Hong Kong Feng Tai Footwear Co Ltd marks that the problem consists in the western companies. Because of purchasing capacity decrease they do not know what to do with the goods and often break off contracts with suppliers.
In economists opinion, rates of growth of the Asian economy (except for Japan) will decrease from 9,1 % in the past to year up to 7 % in this year.
If demand from the USA will continue to decrease, the majority of developing countries will face sharp delay of rates of economic growth. And the Asian countries will not be the exception.

SocGen and Northern Rock have disclosed their losses

admin — Sun, 10 Aug 2008 18:16:31 +0000

Net profit of French bank Societe Generale (SocGen), which in the beginning of the year has become a victim of the swindle largest in history from the trader, in the second quarter, has reduced more than twice - up to 644 million euro.
Yesterday the victim of credit crisis, largest in the Great Britain bank, Northern Rock (NR) in the first report after nationalization has opened semi-annual losses in 747 million euro.
Yesterday in the Great Britain NR has informed on the loss in the first half-year in 592 million pounds sterling (747,3 million euro), it is connected with write-off by bank of the delayed credits for the sum 191,6 million pounds (242 million euro), and also with charges on business reorganization.
NR has been nationalized in February of the last year after what it has gone through crisis of liquidity and scale response of means from deposits. Nationalization has been caused by absence of competitive private offers; however, this step still causes disputes.
NR, however, has informed, that has paid to Bank of England 9,4 billion (11,9 billion euro) from 26,9 billion pounds (34 billion euro), which it still should pay. Northern Rock has informed, that it will return to profit not earlier than 2010, when it expects to extinguish completely debts before British Central Bank. Thus yesterday the government has met NR, actually having given to it new financial injections: 3 billion pounds (3,8 billion euro) from the remained duty and preference shares for the sum 505 million the euros belonging the government, will be converted in ordinary bank’ shares.

European banks disclose credit losses

admin — Tue, 05 Aug 2008 20:38:50 +0000

Yesterday The largest bank of Europe HSBC has informed on decrease in semi-annual profit almost on third, up to 10,2 billion dollars, on a background of write-offs in the American hypothec business. HSBC became the first of European banks, which this week would open the losses before investors.
Nevertheless analysts mark, that the bank copes with crisis much better the majority of competitors owing to business diversification and good presence in developing markets of Asia.
Meanwhile HSBC only the first in a turn of the European banks which will open the losses from crisis. Analysts expect, that British Royal Bank of Scotland (RBS) will inform on the loss from 1 billion up to 1,5 billion pounds sterling (2-3 billion dollars) in the second quarter, which becomes the largest in history of bank sector of the country. Under analysts’ forecasts on Thursday Barclays will show 35 percent decrease in quarter profit, up to 2,6 billion pounds (5,1 billion dollars).
Besides, today French bank Sosiete Generale can declare falling profit on 69 %, up to 550 million dollars, and BNP Paribas can open, that after write-off 475 million euro its profit has fallen to third, up to 1,5 billion euro. From the beginning of crisis credit losses of the European banks have already exceeded 209 billion dollars.

Japanese banks become more active

admin — Sat, 26 Jul 2008 21:03:51 +0000

The bank sector of Japan has overcome consequences of the American hypothec crisis almost lost-free. Local financial institutions operated cautiously and promised high percent reacted to investment offers at the minimal risks. The Japanese bank branch has started to show activity just now.
According to Association of the Japanese banks, net-profit all financial institutions of the country has fallen on the average to 38 % and is on the lowest for last three years a level in 2,12 billion yens.
One of the largest Japanese banks Mizuho, which has suffered all the same strongly enough in result of the American financial crisis, plans to address to local investors. Thus it is necessary to note, that unlike the western banks crisis has not destructed it. And its competitors in Japan have even enough means to be aimed at favorable purchases worldwide.
So, for example, bank Sumitomo Mitsui buys a share in strong on-suffer as a result hypothec troubles Barclays in London. The concept of their cooperation provides, in particular, mutual support at release on the domestic market of the partner. Sumitomo Mitsui managers prove that interaction with the global player allows moving ahead in those segments where they could not make the way. Now the largest investment bank of Japan Nomura plans to create division, which similarly to a hedge-fund will invest in the bond in the New York branch. In these purposes Japanese have got firm Proxima Alfa Investments. It has also become known that the leader of the Japanese financial branch bank Mitsubishi UFJ Financial Group also prepares serious transaction.

ECB has raised a discount rate up to 4,25 %

admin — Sat, 19 Jul 2008 21:03:13 +0000

The European central bank (ECB) has raised a discount rate on 0,25 percentage items. Thus, the parameter has made 4,25 % annual. Such decision was accepted today, on July, 3rd, at session of advice of managing directors of bank.

Decision of ECB has coincided with expectations of analysts, who predicted, that the bank will raise the rate of refinancing on 0,25 percentage items - up to 4,25 % annual.
More than for a year the rate was kept at the level of 4 %. However, the president of Bank has for many times declared that the bank had to solve the problem of struggle against inflation, even in detriment of economic growth.

Let’s remind that ECB’s previous session took place on June, 5th, 2008, and the discount rate has been left at the level of 4 % annual.

According to published on June, 30th, preliminary data of Eurostat, inflation in Euro zone of euro is expected at the level of 4 % in annual calculation. Thus ECB’s reference point on inflation in Euro zone makes not above 2 %.

In experts’ opinion, increase of the European discount rate will inevitably lead to the further falling of dollar and rise in prices on raw actives. Now the difference between rates in the Europe and the USA will make 2,25 %, that, most likely, will serve as a principal cause for weakness of US currency.

Bank of America has finished purchase of hypothec broker Countrywide

admin — Sat, 12 Jul 2008 21:01:45 +0000

Bank of America (BoA) has finished purchase of hypothec broker Countrywide Financial for 2,5 billion dollars. The sum of the transaction was on 37 % below initial 4 billion dollars because of decrease in BoA’s quotations. Opponents of merge prove, that together with Countrywide BoA has got billions dollars of write-offs and a legal cost in the future, and opponents object, that in long-term prospect the bank only will win from the transaction and after end of crisis it will receive a quarter of the hypothec market of the USA.

This transaction as a matter of fact has been begun in August, 2007 when BoA in exchange for 16 % of shares has invested 2 billion dollars into Countrywide and has helped bank to cope with the deficiency of liquidity, caused by credit crisis. In January of this year the company has agreed upon purchase of Countrywide, entirely through exchange of shares in the ratio 1 to 0, 1822. For that moment the transaction was estimated in 4 billion dollars, however, since then shares of bank have fallen in price almost on 40 % because of what the size of the transaction was reduced up to 2,5 billion dollars. The Bank has paid for the company about 4,3 dollars per share, besides, one year ago papers of the company cost over 35 dollars piece.

Bank of America will fire 7,5 thousand of “hypothec” employees

admin — Mon, 30 Jun 2008 18:34:22 +0000

Within two years after purchase of largest in the USA hypothec company Countrywide Bank of America is going to reduce nearby7,5 thousand workplaces.
To reduction will cover about 3 % of all labor of the united companies. In the end of March nearby 209,1 thousand person worked in Bank of America and nearby 50,4 thousand employees worked in the Countrywide.
Reduction of the personnel will pass all over the country, basically, in those areas, where functions of the serving two companies are duplicated.
Countrywide has already reduced 11 thousand workplaces in connection with growth of losses under credits from the middle of 2007 and has limited delivery of brave loans, including low-rate subprime credits and loans with the floating interest rate.

Mortgage will ruin thousand British

admin — Sun, 29 Jun 2008 16:59:05 +0000

More than 23 000 Englishmen, who have taken the mortgage from the beginning of year, continue to lose money. Falling of the prices for the real estate means unprofitableness of investments in hypothec habitation as cost of the house, got in such way, becomes below the sum, which the borrower should give to the bank.

Data of Hypothec creditors’ council show that rates of growth continue to decrease in the housing market. The quantity of transactions has fallen to one agent up to the lowest mark for last 30 years. For last 5 months real estate has lost in the price about 6 %.

These data have forced banks to toughen requirements to borrowers - now they reluctantly give out loans and refuse clients without initial payment as the risk of outstanding credit is very high. For the borrower loss in cost of habitation doesn’t seem such a serious problem while the owner will not face necessity of leaving the house, when he will not be able to pay the percent under the mortgage.

Data show decrease in a segment of sale and purchase, where very small quantity of people have replaced habitation - for last 3 months on each agency hardly has more than 17 transactions. However, it is not the end - up to the end of 2009 experts predict even greater falling in prices.

Royal Bank of Scotland predicts world financial crash

admin — Sat, 21 Jun 2008 09:00:01 +0000

Royal Bank of Scotland (RBS) analysts believe that within the nearest three months the world share market can suffer crash, which will become one of the most scale for last 100 years, predicting, that by September of this year S&P 500 index will lose 22 %. At the same time HBOS bank’s experts consider, that the quantity of the given out loans on purchase of the real estate will decrease on 45 %, and the number of non-returns of credits will grow on 17 %. The bank of Russia also prepares for the next demand for liquidity from banks.
RBS analysts predict longer period of economic growth delay, which will be kept not only within this, but also within the following year. Thus in such conditions Central Banks will appear actually paralyzed and will not be able to undertake anything for inflation restraint. Most of all RBS analysts are disturbed with prospect of increase of rates in the Europe for struggle against inflation that can turn back with sharp toughening of monetary policy. The further decrease in economic forecasts will lead to reduction and according to analysts’ estimations it will lead to decrease of companies’ profits and increase in forecasts of corporate defaults.