American hypothec giant Fannie Mae has lost $29 billion
Written on 11 November 2008 by adminIn the third quarter of current year Losses of the American hypothec agency Fannie Mae, which have passed in September under a direct control of the state, have reached $29 billion owing to continuation of growth of volume of nonpayments under the mortgage.
During July-September losses Fannie Mae in recalculation in one ordinary share have made $13. Analysts predicted losses at the rate of $1,6 per share.
The company has finished the similar period of last year with losses in $1,4 billion ($1,56 per share). In the second quarter of current year losses of hypothec agency have made $2,3 billion ($2,54 per share).
Fannie Mae and Freddie Mac, one more leader of the USA hypothec market, whose total losses from the middle of last year till March, 2008, have exceeded $12 billion, have been translated under state management in the beginning of September.
Credit cards can aggravate world crisis
Written on 4 November 2008 by adminThe market of credit cards has heavy times that can create a new coil of world crisis. According to data US FRS now intimidated by prospect of approach of economic recession Americans are having about 950 billion dollars of “a plastic debt”.
According to experts, the situation in sphere of card crediting reminds a vicious circle: in view of growth of volume of non-payments the interest overdraft rate increases, that finally again turns around growth of non-payments.
According to Moody’s, the share of transient card credits has increased from 4,61 % up to 6,82 %, i.e. growth has made 48 %. In case of growth of unemployment, write-off on credit cards can get really historical scales.
It will, first of all, affect such banks, as JP Morgan Chase, Bank of America and Citigroup, which, according to Nilson’s report, have issued the greatest quantity of credit cards.
It is necessary to note, that, according to the American legislation, citizens, facing problems with debts, can have possibility can apply for personal bankruptcy, and at performance of all necessary conditions they will receive chance, that in five years all their debts will be cancelled. For example, the citizen it is obliged to return only 10 % of debts and 90 % of debts will remain as creditor’s loss.
Chinese mortgage
Written on 30 October 2008 by adminWorld financial crisis has come to builders and developers from China. In order to minimize losses and to support the real estate market, the government of China has made the decision on decrease in taxes for real estate operations, stamp duties, and also initial payments under the mortgage.
As the Chinese Ministry of Finance has informed, since November, 1st, the tax for citizens, who for the first time buying habitation, and also for those who gets habitation the area less than 90 sq. m, the tax to fulfillment of the transaction with the real estate will be lowered from 1,5 to 1 %. The Stamp duty at the rate of 0,05 % and VAT will be cancelled for all transactions on real estate purchase and sale. The initial payment at purchase of apartment by means of the mortgage will be lowered from 30 to 20 %. Besides, the decision to reduce the rate under hypothec credits is accepted.
The representative of National bank of China has informed that the purpose of a new package of measures is a struggle against global financial crisis by means of support of growth of local consumption and improvement of financial services for buyers of habitation. According to Clement Luk Shing, a director and assistant general manager at Centaline (China) Property, «new measures were expected for a long time already, they should give a positive signal to the real estate market is shows, that the government has weakened a vice».
The Peking habitation became more expensive on 6,9 % in comparison with the similar period of last year. But in comparison with August it has fallen in price on 0,2 %. The municipal government of Beijing has informed on Wednesday, that the price for the earth under residential buildings has decreased on 17,3 % in comparison with the last quarter and has made 445 dollars for one square meter.
Credit Suisse dismisses employees in the USA and Great Britain
Written on 28 October 2008 by adminOne of the largest Swiss banks Credit Suisse declared about reduction of 500 workplaces in bank sector. As representatives of Credit Suisse have informed, reductions will concern employees in the USA and the Great Britain.
It is not the first reduction of employees, declared by bank. Earlier Credit Suisse has informed, that it is intended to dismiss 1,5 thousand workplaces.
During last 9 months of 2008 pure losses of Credit Suisse have made 2,19 billion Swiss francs (1,46 billion euro).
During the same period company’s gain has decreased on 56 % and has made 14 billion Swiss francs (9,34 billion euro).
Credit Suisse is one of the largest European banks, providing wide spectrum of services.
Indian banks do not have not enough liquidity
Written on 21 October 2008 by adminNotwithstanding the fact that bank system of India is enough reliable, unexpected crisis of liquidity, and also decrease in trust of investors, investors and managers are also suffering from global financial crisis. The government of the country has made a decision on financial injections.
In weekend the Central Bank of India has reduced the reserve rate from 9 up to 7,5 %: owing to it in financial system has received 600 billion rupees (12,4 billion dollars). Still nearby 8,2 billion dollars was released, as banks have been compelled to reduce investments in state loans from 25 up to 24 %.
Because of not too close communications with the world financial system, strictly adjustable state banks and only partially convertible currency of India has not been subject to global crisis.
Nevertheless the fear before distribution of financial crisis gradually covers also the crediting market of India. Despite of financial injections from the Central Bank, the Indian banks have ceased to lend each other.
Most of all the real estate market, as many civil engineering firms, suffer shortage of liquidity suffers from crisis in India.
European banks are looking for way out from crisis
Written on 17 October 2008 by adminAt absence of the coordinated policy of EU on support of the banks, which have suffered during global credit crisis, the European financial structures differently solve the problems.
On Sunday the government of Germany and consortium of German private banks have developed the new plan of rescue from bankruptcy of large hypothec holding Hypo Real Estate AG (HRE).
The Ministry of Finance of Germany promised to allocate 50 billion euro for these purposes.
Yesterday the step to rescue was made also by financial group Fortis: the largest French bank BNP Paribas has agreed to get its control share holdings of the Belgian and Luxembourg divisions for 14,5 billion euro.
Threat of bankruptcy has hung above HRE because of financial losses of its branch Depfa. The Foreground of rescue HRE has been developed last week and has been approved by Eurocommission: the consortium of not named Deutsche Banks should give HRE the credit at the rate of 8 billion euro, and the government of Germany will add 27 billion euro more.
However the transaction did not take place, as banks have demanded greater guarantees from authorities. The government of Germany has gone on concessions and has allocated additional means.
Citigroup: situation in developing markets will get worse
Written on 15 October 2008 by adminAmerican bank Citigroup has warned about the further deterioration of a situation in developing markets the nearest months, especially in the countries with unstable political situation.
Representative of City Private Bank in Asian-Pacific region recommends investors to put means in those sectors of economy, which show the greatest stability, such as public health services, the municipal enterprises and an infrastructure, and to diversify investments.
According to Bank’s representatives in the nearest some months there will be difficulties with everything, connected with developing markets. That the geopolitical situation in this region is far from ideal, as for example in Thailand and Russia only aggravates a situation.
The expert has admitted that advice to invest in Asian and other developing markets was one of the worst recommendations of bank to clients for last year.
MUFG is to get 24,9 % of Morgan Stanley
Written on 7 October 2008 by adminFederal Reserve System of the USA has approved transaction on purchase 24,9 % of share capital Morgan Stanley by the Japanese bank Mitsubishi UFG Financial Group (MUFG). Such data has been represented in FRS’s official documents. Meanwhile nothing is informed on details of the transaction.
Earlier it was informed, that MUFG gets 21 % of Morgan Stanley’s share capital for 9 billion dollars. Transaction has been divided on two parts: the Japanese bank should get 9,9 % of ordinary shares of Morgan Stanley for 3 billion dollars at the rate of 25,25 doll./share.
Besides, MUFG should also get convertible preference shares of the American bank for the sum of 6 billion dollars. Converting price of preference shares has been established at the level of 31,25 doll./share. Thus the Japanese bank acquires the right to dividends in volume of 10 % on Morgan Stanley’s preference shares.
After end of the transaction one of Mitsubishi UFG’s representatives will be included into Morgan Stanley’ board of directors.
Mitsubishi UFJ Financial Group Inc. is formed in 2005. In result of merge in cost of 30 billion dollars, it was carried out by two large Japanese banks - Mitsubishi Tokyo Financial Group and UFJ Holdings. In result incorporated corporation has selected a palm tree of superiority in bank sector at American Citigroup, before association of the Japanese banks was considered as the world’s largest bank. Mitsubishi UFJ has 80 thousand employees.
Citigroup gets Wachovia
Written on 30 September 2008 by adminToday Federal Deposit Insurance Corporation of the USA has informed that American bank Citigroup gets bank business Wachovia. In the message of department it is emphasized, that bank Wachovia is not ruined and not the bankrupt, but is only being got by other bank.
According to the terms of transaction, Citigroup gets the most part of business Wachovia, thus AG Edwards and Evergreen remain under Wachovia’s control.
Citigroup undertakes to take up losses at the rate of up to 42 billion dollars from credit portfolio of Wachovia, which total amount makes 312 billion dollars. In case if losses under the credits, which have been given in due time to Wachovia, will exceed this sum, this rest will be paid by Federal Deposit Insurance Corporation. As indemnification for risk accepted by Federal Corporation, Citigroup transfers it preference shares and warrants for the sum of 12 billion dollars
The transaction has been concluded at intermediary of Federal Deposit Insurance Corporation and Federal Reserve System (FRS) of the USA. Besides, the transaction was also coordinated with U.S. Treasure Secretary Henry Paulson and U.S. President Georges Bush.
Wachovia is the fourth on size the bank company in the USA on volume of actives and it renders various bank services on territory of 21 American states. The number of employees of the company makes 110 thousand people. Pure losses of American bank Wachovia have made 8,9 billion dollars.
Credits for small business
Written on 24 September 2008 by adminNowadays Russian economy has crisis times: for some months leading experts of all services, including Minister of Finance Alexey Kudrin, are speaking.
Bank sector experts unanimously do rates on development of opportunities of crediting of small and medium business in Russia in calculations on long-term planning, estimating possible growth of this segment within the nearest five years.
Some banks prove their readiness to work in small and medium crediting sphere by successful experience of the last years, in fact till 2008 rates of the Russian economic development were high enough.
The market of small and medium crediting business shows excellent results - for the last year growth has made more than 50 %, and such tendency continues to be kept.
Today first of all the enterprises of small and medium business are interested in credits. And demand promotes supply; therefore, banks do not aspire to reduce volumes of granting this service in the market.
