Moody’s: Western banks do not want to rescue “daughters”

Written on 18 February 2009 by

International rating agency Moody’s Investors Service expresses concern concerning readiness of the West European banks to support to the affiliated companies in the Eastern Europe in terms of promptly worsening macroeconomic climate.
As it is marked in Moody’s report, after several years of rapid growth in economy of the Eastern Europe, the period of deep and long recession has come. In result the western banks have faced the raised risk of profitableness reduction in the sphere of investments in development of the affiliated structures in this region.
Moody’s proves that though the East Europe countries differ on vulnerability degree, situation among the countries with investment class ratings is difficult and the greatest deficiency of the state budget is observed in Baltic countries, Hungary, Croatia, Romania and Bulgaria. Nevertheless, the rating agency also notices, that some countries of region, including Ukraine, Kazakhstan and Russia, are under pressure, even despite rather low level of external debts of state sectors.
West European banks, having branches in the Eastern Europe, are basically banks from Austria, Italy, France, Belgium, Germany and Sweden. These six countries possess about 84 % of total amount of the rights of the requirement of the West European banks in the Eastern Europe.

UBS faces great losses

Written on 11 February 2009 by

In 2008 Swiss bank UBS has incurred ¬ the losses, which became unexpectedly great not only for the company, but also for all corporate history of Switzerland. Now the European bank, which has suffered from crisis, hopes to correct situation at the expense of reductions of employees and reorganization.
Last year UBS’ losses reached almost EUR 13 billion, in the fourth quarter of last year UBS has lost EUR 5,35 billion, thus that analysts predicted losses not more than EUR 4,1 billion. Results of financial activity of division on actives management and investment division have appeared the most disappointing. According to UBS managers wrong decisions in investing sphere have led so to substantial damages - till the end of a year this division will cut 2 thousand workplaces. Besides, the bank plans to change the structure, having divided business on work with premium clients on Wealth Mana¬gement & Swiss Bank, and also Wealth Management Americas.
UBS will continue the program of economy including expenses reduction and refusal from risky positions. As to unprofitable investment division it still remains to one of leading programs of the bank.
Last year investing department has cardinally changed business model, having reduced stuff, additional capital share and having risks. Despite rather sad results of last year financial activity, UBS has not refused from payment of bonuses. However, they will be reduced almost to 80 % and will make only EUR 1,43 billion.

DeltaCredit reduces rates

Written on 28 January 2009 by

Specializing savings and loan association DeltaCredit has lowered rates under the basic programs of hypothec crediting in rubles. Thus, the minimal value has made 14,5 %. Thus the standard commission of bank is lowered up to 1,5 %.
Dinara Yunusova, vice-president on development of business DeltaCredit, says that DeltaCredit offers one of the most favorable hypothec programs in the market and offers high-quality service. It is obvious that DeltaCredit’s offer will become a real gift for those buyers of habitation, who have for a long time expected for correction of its cost to solve the housing question. Now this time has come.
Decrease of rates in so uneasy for bank sector and Russian economy time is a result of the thought over and professional financial strategy DeltaCredit aimed at maintenance of uninterrupted delivery in current year. It confirms DeltaCredit’s intention to use the best efforts for maintenance of the mortgage as tool of the decision of a housing question for a significant part of the population of Russia.

Ireland will help national banks

Written on 21 January 2009 by

The government of Ireland invests 5,5 billion euro in three national banks of the country, having received packages of preference shares of these financial institutions in exchange. Bank of Ireland and Allied Irish Banks will receive €2 billion. They will give to authorities 25 percent packages of preference shares, on which will pay 8 % of profit annually. The third financial establishment, Anglo-Irish Bank, will receive from the government €1,5 billion in exchange for preference shares, on which dividends at the rate of 10 % will be paid annually.
Possession of preference shares of this bank will give the new proprietor the right to operate 75 % of voices of this credit organization. According to terms of transaction all banks can redeem shares at the price of release within the nearest five years. Then the price of the repayment will grow on 25 %.
Minister of Finance of Ireland has expressed hope, that shares of the cabinet on recapitalization of the largest players of bank sector can become a positive signal to the market about stability of financial system of the country: yesterday for short time at the tenders of the London stock exchange quotation of Bank of Ireland, Allied Irish Banks and Anglo-Irish Bank’ papers have grown on 41,3, 17,98 and 7,27 % accordingly.

DeltaCredit reduces rates under the mortgage

Written on 13 January 2009 by

Savings and loan association DeltaCredit reduces rates under the basic hypothec programs in dollars on 2 %. Thus the maximal validity of approval is increased up to one and a half months.
Dinara Yunusova, vice-president on development of business DeltaCredit, says that no many people are excited with a question, whether it is necessary to take credits in currency, considering strengthening of dollar. Owing to the fact that DeltaCredit offers one of the lowest in the market rates, their borrowers even in conditions of growth of a dollar exchange rate have significant advantages and save on monthly payments in comparison with ruble credits. In view of DeltaCredit’s offer, threshold value of a rate when payments will be made even exceeds 50 rubles for dollar.
In the end of year the significant number of purchases of the real estate is required. In many respects it speaks desire to give a significant gift and native on the eve of New year. Reducing rates, DeltaCredit enables clients not to break this tradition, considering that cost of habitation has decreased recently a little.
The offer operates in all regions of presence DeltaCredit since December, 15, till December, 31st.

Citigroup sells one more division in Japan

Written on 3 January 2009 by

Corporation Citigroup is to sell its not American actives. In the beginning of December it has sold German subdivision Citibank Privatkunden AG&Co to French group Credit Mutuel-CIC for $6,6 billion, and now has decided to sell a part of the business in Japan. It is a question of company NikkoCiti Trust and Banking Corp., focused on confidential management of actives. On official data, as the buyer one of the largest world financial groups - Mitsubishi UFJ Financial Group Inc., which has offered 25 billion yens ($277 million) for NikkoCiti , acts. It is expected, that the transaction will be finished till April, 1st. We shall remind, about intention to sell NikkoCiti Trust and Banking Corp. Then, besides Mitsubishi UFJ, market participants named banks Sumitomo and Mizuhoamong among possible applicants for purchase. Experts estimated NikkoCiti in $100 - 420 million.
Citi sells a part of the Japanese battalion in the context of program of optimization of the structure and reduction of operational charges, which have already led to dismissal 50 thousand employees of the company. As top-management expects, the cumulative income of realization of this package of actions will make about $10 billion.

Bank of America solves its main problem

Written on 24 December 2008 by

American financial market expects for the next wave of dismissals. Last week Bank of America has promulgated the plan on dismissals from 30 up to 35 thousand employees within three years. Management of the company is compelled to go for optimization of the costs connected with forthcoming merge Merrill Lynch and Co., and also with negative influence of recession of national economy.
Shareholders Bank of America and Merrill Lynch have approved merge on December, 5th. The transaction is to be finished till January, 1st, 2009. In result in the USA there will be the largest on volume of actives bank. Earlier the transaction was estimated in 50 billion dollars, but in connection with falling of cost of actions Bank of America (more than on 64 %) now makes less than $20 billion.
The number of employees of bank after merge will reach 308 thousand people, 60 thousand from which will work in Merrill Lynch. Analysts do not doubt of inevitability of personnel optimization, especially in view of recession in the USA and aggravations of competitive struggle in bank sector. According to Bloomberg, such important indicator, as P/E (the parity of cost of share to profitableness), makes about 43 %, while at two other leading American banks - JPMorgan Chase both Co. And Citigroup - this parameter makes 53 and 66 % accordingly.

Credit Suisse will cut 5300 jobs

Written on 4 December 2008 by

One of the largest Swiss banks Credit Suisse will cut 5300 jobs, or about 11 % of its global work force, in connection with global financial crisis. Such information has been represented in the published statement of bank.
According to the statement, reductions will mention mainly banking investment branch. In result of reductions and other measures on increase of profitableness the bank expects to reduce costs on 2 billion Swiss francs (€1,3 billion).
Thus the bank has estimated losses for current quarter (at the end of November, 2008) at the level of 3 billion Swiss francs (€1,95 billion).
Let’s remind, that in the end of October Credit Suisse declared about reduction of 500 workplaces in investing sector. As Credit Suisse’s mass-media representatives have informed later, reductions will touch employees in the USA and the Great Britain. Earlier Credit Suisse informed that it was intended to cut 1500 jobs.
Within 9 months of 2008 Credit Suisse’s pure losses have made 2,19 billion Swiss francs (€1,46 billion). For 9 months of 2008 A company’s gains have decreased on 56 % and have made 14 billion Swiss francs (€9,34 billion).
Credit Suisse is the largest European bank, offering a wide spectrum of services.

S&P warns Russian banks

Written on 21 November 2008 by

According to estimations of international rating agency Standard and Poor’s (S&P), next year the problem of Russian bank system’s debts can reach ten and more percent.
As Ekaterina Trofimova, an expert of the S&P’s branch in Paris, has explained, it will be negatively reflected in the capital of banks and level of their profitability. Now, according to Ms. Trofimova, debt problem is not urgent, therefore today it does not represent serious threat to bank system.
As Ekaterina Trofimova, the next year the problem of bank sector’s debts can make ten and more percent. Ekaterina Trofimova has told that it is their own indicator, which considers the delayed debts under credits without dependence from term of delay without technical delay, credits to the banks, the re-structured problem credits, and also the actives, withdrawn at liquidation of problem credits and credits to the parties, connected with borrowers’ problem.
As she said, now this indicator is much lower, therefore, the volume of problem debts does not bring serious threat to the bank system as a whole. She also notices, that of problem debts’ growth to ten and more percent is possible in case of sharp change of variety of factors, in particular, considerable deterioration of a macroeconomic situation in Russia, serious change of the rate of exchange and the further deterioration of a situation with liquidity.

IMF: Great Britain or Iceland?

Written on 17 November 2008 by

The economy of Iceland is on the verge of a collapse, and promised IMF’s 2 billion dollars credit was on fortnight delay - voting, which was planned on November, 5th, will take place only 19th. The suspension of negotiations about rescue of Iceland has been spent under the pressure of the Great Britain. London for a long time could not agree with Iceland about the sizes of indemnification to the British investors, whose money was in nationalized Icelandic bank Landsbanki Island.
Landsbanki Island has appeared on the verge of bankruptcy because of world credit crisis, therefore in October the government of Iceland has made the decision on its nationalization. At the same time the bank enjoyed great popularity among British and Dutches, whose total sum of contributions, including Internet accounts, has reached 8,2 billion dollars. Great Britain has demanded Iceland to compensate losses of investors. This position was supported by Holland and Germany. As consequence, the appointed voting has been transferred for November, 10th, but also in the beginning of last week two have not come to any agreement.
The maximum size of indemnification became a stumbling-block at negotiations between Iceland and London Past Friday the prime minister of Iceland has informed, that the parties «are close to arrangements». And on Saturday in Washington the head of IMF has declared, that the arrangement on credit allocation is reached and voting will take place on Wednesday, on November, 19th. According to British Financial Times, the possible compromise can be the following: Iceland compensates contributions at the rate up to 20 887 euro while the Great Britain will pay the rest of the sum.

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