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April 2010
04/30/2010
Macquarie Profits Jump 21 Percent
The New York Times, April 30, 2010 Macquarie Group said Friday that its full-year profits had jumped 21 percent to 1.05 billion Australian dollars ($977 million). The investment group has been on a buying spree in the past 18 months, The Financial Times noted. It has primarily picked up new assets in North America and Europe and today said it had acquired a 1 billion Australian dollar portfolio of car leases and loans from the Australian auto finance subsidiary of GMAC.
Banks may need $85 bln under derivatives regs -JPM
Karen Brettell, Reuters, April 29, 2010
NEW YORK, (Reuters) - Global investment banks would need to raise an additional $85 billion to capitalize new companies if proposals are enacted that require banks to separate derivatives trading from their commercial banking operations, JPMorgan analysts said on Thursday.
U.S. legislative proposals to reform the $450 trillion privately traded derivatives markets would also likely reduce liquidity and shift market share to new entrants such as hedge funds, which are less regulated than banks and which could increase systemic risks, JPMorgan said.
Senator Blanche Lincoln, who chairs the agriculture committee, earlier this month unveiled an aggressive draft bill to regulate derivatives that would require banks to spin off swaps desks if they are protected by federal deposit insurance or access the Federal Reserve discount window.
Barclays Falls as Investment Banking Misses Estimates (Update1)
Jon Menon and Andrew MacAskill, Bloomberg, April 30, 2010
April 30 (Bloomberg) -- Barclays Plc, the U.K.’s third- largest bank by assets, fell in London trading after first- quarter investment banking revenue dropped more than estimated.
Revenue at the Barclays Capital unit slumped 26 percent to 3.8 billion pounds ($5.8 billion) for the three months to March 31, missing the 4.9 billion-pound estimate of analyst Mark Phin at Keefe, Bruyette & Woods Ltd. The shares declined the most in 12 weeks.
“We are skeptical about continued growth at Barclays Capital,” wrote Bruce Packard, a London-based analyst at Seymour Pierce, with a “sell” recommendation on the stock. Fixed-income bankers “have worked hard to perpetuate the scientific nonsense of everlasting, compounding growth.”
04/29/2010
Bank of America Names a New Chairman
Reuters, The New York Times, April 28, 2010 Reuters - Bank of America named DuPont’s longtime chief executive, Charles Holliday, as its chairman on Wednesday. He succeeds Walter Massey, who retired from the board after reaching the mandatory retirement age of 72.
“Chad brings excellent perspective with experience as a chairman and chief executive of a prominent global business,” Brian Moynihan, Bank of America’s chief executive, said in a statement. The announcement came hours after the bank concluded its 2010 annual meeting.
Where the Bonuses Are Biggest
Catherine Rampell, The New York Times, April 28, 2010
Bonuses make up a much larger share of earnings for employees in the finance and insurance industry than in any other major service-providing sector, according to a Labor Department report.
The chart shows the percent of gross earnings — defined as the sum of wages, overtime, bonuses, shift differentials and paid leave — held by bonuses. In financial services, bonuses account for 6.5 percent of gross earnings; the percentage for the next highest bonus-getter is less than half as large (professional, scientific and technical services, at 2.9 percent).
Switzerland Takes Step to Cap Banker Bonuses
The New York Times, April 29, 2010
The Swiss government put forward a threefold plan Wednesday to cap bonuses in the banking and insurance sectors as it sought to win support from the parliamentary opposition for an agreement with U.S. authorities about UBS client data, as well as for a broader banking overhaul in Switzerland.
The country took aim at what it termed “excessive salaries in bank and insurance companies,” proposing to regulate salaries in any financial institutions that required state aid; tax more heavily any compensation in excess of 2 million Swiss francs; and alter how it calculated taxable gains from stock options.
“There is a general need to prevent inappropriate compensation systems in the future and promote salary structures that have a positive impact on the long-term prospects of companies,” the government said in a statement.
04/28/2010
Blackstone Hires Former Client Huang From AIG for Advisory Unit
Zachary R. Mider and Jason Kelly, Bloomberg.com, April 28, 2010
(Bloomberg) -- Blackstone Group LP, the world’s biggest private-equity firm, hired Felix Huang, a former executive at client American International Group Inc., for its corporate-advisory unit as it expands beyond buyouts.
Huang, a former restructuring executive at AIG, joined this month as a managing director based in the firm’s Menlo Park, California, office, said Christine Anderson, a Blackstone spokeswoman. New York-based Blackstone has been helping AIG restructure its business and sell units since 2008, when the U.S. government bailed out the insurance company to stave off a collapse.
04/27/2010
People's United CEO Departs; Bank Wants 'Right Acquisition'
Matthias Rieker, The Wall Street Journal, April 26, 2010NEW YORK (Dow Jones)--After surviving the financial crisis in strong shape, People's United Financial Inc.'s (PBCT) board abruptly decided it needs a new leadership.Most banks needed to raise capital or at least preserve capital over the last two years. People's, of Bridgeport, Conn., is one of the few with the opposite problem. Analysts assume that Chief Executive Philip Sherringham didn't move fast enough to deploy capita, leaving the board impatient.On Monday, the bank said Sherringham resigned "by mutual agreement" with its board. "The Board believes that new leadership is necessary to take the Company to the next level," Chairman George Carter said in the release. A spokeswoman said there was "no single catalyst" for the management change.Sherringham couldn't immediately be contacted for comment.Continue to full article
Nomura Defections Damage Bid to Catch Up With Rivals (Update1)
Takahiko Hyuga and Ambereen Choudhury, Bloomberg.com, April 27, 2010
(Bloomberg) -- Nomura Holdings Inc. executives attending the annual meeting for top managers in Tokyo this month witnessed an unprecedented event at the 84-year-old firm: The chief executive officer gave his address in English.
CEO Kenichi Watanabe told 550 managers that Nomura, which bought Lehman Brothers Holdings Inc.’s Asian and European units in 2008, is changing into a global firm and urged them to strengthen cooperation among regions and units, said two people present who declined to be identified. Standing before a screen showing a jet emblazoned with the bank’s logo, Chief Operating Officer Takumi Shibata compared Nomura to flying.
“The airplane just left the ground last year,” Shibata said at the event at Tokyo’s Grand Prince Hotel New Takanawa. “It needs to gain more altitude.”
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