Financial Industry 01 (Jul 08 - Aug 09)

[kennynah]

RBS has a rather small footprint in singapore, whether for wealth management or wholesale financing

but i know RBS has been in distress since a year ago.... finally, they are slowly disintegrating....

[millionairemind]

UBS no see green shoots?? No trading operations???

* AUGUST 4, 2009, 1:58 A.M. ET

UBS Loss Widens to $1.32 Billion

By KATHARINA BART

ZURICH -- Swiss bank UBS AG Tuesday said its net loss widened in the second quarter, hit by charges related to its own debt and its restructuring effort, as it failed to match the largely buoyant earnings posted in the period by global rivals.

The Zurich-based bank said its net loss for the three months was 1.4 billion Swiss francs ($1.32 billion), compared with a loss of 395 million Swiss francs in the year-ago period.

The result was weaker than analyst estimates, which had averaged 1.32 billion Swiss francs for the net loss.

Analysts had been expecting UBS to post a much weaker result than healthier rivals such as Credit Suisse Group and Barclays PLC, where quarterly profits surged on investment banking gains. Now, UBS, which has written down more than $50 billion in illiquid assets, will be in focus for Friday, when specifics on an settlement between the bank and the U.S. Internal Revenue Service are outlined.

The deal in principle, revealed Friday, is being hammered out by the Swiss and U.S. governments and is expected to include the handover to U.S. authorities of confidential client data of suspected tax cheats.

UBS on Tuesday didn't elaborate on the settlement, for which legal experts suspect the main terms have already been set.

In its business outlook, UBS said it remains cautious overall, and that a sustainable economic recovery cannot yet be spotted. Late in June, UBS warned of an unprofitable quarter but said investment-banking conditions were improving. Then, the bank tapped fresh capital for a fourth time.

The second quarter includes several charges, including 1.21 billion Swiss francs on own debt, 582 million Swiss francs to restructure, and 492 million Swiss francs related to Banco Pactual, a Brazilian investment bank being sold.

UBs' second-quarter operating income surged 45% to 5.77 billion Swiss francs from 3.98 billion Swiss francs year earlier because UBS reversed hefty year-ago trading losses to generate a small gain.

Its private bank lost 16.5 billion Swiss francs in client funds in the quarter, with nervous clients taking flight amid the privacy concerns.

UBS shares have gained 6.3% since the IRS settlement was outlined, highlighting the importance for investors that the bank end the messy lawsuit. Monday, UBS stock closed at 16 Swiss francs, giving the bank a market capitalization of $47.14 billion.

[winston]

China Banks Drop on Report Capital Requirement May Be Tightened n By Bloomberg News

Aug. 4 (Bloomberg) -- Shenzhen Development Bank Co. and Huaxia Bank Co. led declines by Chinese lenders on concerns that the nation’s banking regulator may tighten capital requirements and crimp their ability to lend.

The China Banking Regulatory Commission may order banks to deduct their holdings of subordinated debt sold by counterparts from the supplementary capital, the Wall Street Journal reported today, citing a person it didn’t identify. The banking regulator estimates about half the subordinated bonds in circulation are held by other banks.

Shenzhen Development Bank fell 3.6 percent to 24.91 yuan in Shenzhen as of 11 a.m., while Huaxia Bank dropped 3.9 percent to 12.70 yuan. Industrial & Commercial Bank of China Ltd., the nation’s largest, declined 1.9 percent to 4.59 yuan.

China’s banks have raised 210.9 billion yuan ($31 billion) selling subordinated bonds this year, nearly triple the amount issued in the entire 2008. China’s banking regulator has urged publicly traded lenders to bolster the minimum capital adequacy requirement to 12 percent by the end of this year to fend off the global financial crisis.

“As a result of more strict CAR calculation, we believe banks also need to slow down their loan growth,” Victor Wang, a Hong Kong-based analyst at UBS AG wrote in a note today. He expects the aggregate capital adequacy ratio for Hong Kong- listed Chinese banks to drop from 11.7 percent to 10.3 percent in 2009.

New Loans

Chinese banks’ new loans tripled to 7.37 trillion yuan in the first half from a year earlier after the government eased restrictions to help revive the economy. The credit boom has fanned concern that funds are being used for speculation, increasing the risk of asset bubbles and bad loans.

The banking regulator has indicated in past weeks it’s concerned about excessive credit creation. On July 27, the commission told banks to ensure loans intended for investment in fixed assets go to projects that support the real economy. Three days later, the regulator announced plans to tighten rules on working capital loans.

Subordinated bonds are counted as supplementary, or lower- Tier 2 capital. In the event of bankruptcy, holders of subordinated notes receive payment only after other debt claims are paid in full.

[winston]

You cant fool all the people all the time ...

DJ MARKET TALK: China Banks Down But Investors Overreacting - JPM

1453 [Dow Jones] China banks notably underperforming with all 6 H-share banks fall more than HSI's 0.8% decline, amid renewed credit tightening concerns, triggered by yesterday's China Securities Journal report saying big 4 banks lent out around CNY170 billion in July, far below June's level.

Still, "we believe many investors overemphasize on the monthly new loan figures and get lost," says JPMorgan; expects loan growth to slow down to 15% for 2010 as thinks 2009 represent peak year in new project starts. Adds, "summer weaknesses are buy opportunities for strong performance in Autumn."

[winston]

PRESS RELEASE: S&P Cuts Gross Problematic Asset Estimate For Chinese Banks

China's banking sector has seen a significant decline in legacy nonperforming loans and structural shifts in its clientele base over years.

We lowered our estimate of the incidence of gross problematic assets in a prolonged downturn despite pressures from the ongoing global economic downturn.

We maintained our Banking Industry Country Risk Assessment on China's banking system in Group 6.

The Chinese banking sector remains vulnerable to high corporate leverage, structural weakness in the production-driven growth model, government influence on lending, and the overall still-developing credit culture in China.

HONG KONG (Standard & Poor's) Aug. 5, 2009--Standard & Poor's Ratings Services lowered its estimate of the incidence of gross problematic assets in the financial system of the People's Republic of China (A+/Stable/A-1+) to 25%-40% from 35%-50% under a scenario of economic recession.

( 25% to 40% are problematic assets in a recession ? )

[winston]

Toxic Loans Topping 5% May Push 150 Banks to Point of No Return By Ari Levy

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

http://www.bloomberg.com/apps/news?pid= ... TT9jivRIWE

[kennynah]

banks in sgp are beginning to hire again

[winston]

Colonial BancGroup shut by regulators By MARCY GORDON,AP Business Writer AP -

Saturday, August 15 WASHINGTON - Regulators on Friday shut down Colonial BancGroup Inc., a big lender in real estate development that buckled under the collapse of the market. It was the biggest U.S. bank to fail this year, with about $25 billion in assets.
While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, experts say. Many regional banks like Colonial hold large numbers of them.

Seventy-seven federally insured banks have failed this year amid rising loan defaults spurred by tumbling home prices and rising unemployment. That compares with 25 last year and three in 2007.

http://sg.news.yahoo.com/ap/20090815/tb ... 79e03.html

[winston]

Be careful of this guy. He can be very wrong ...

Financial Stocks Are Going to Fall By Jeff Clark

Bank stocks have had an amazing run. They've gone from the most oversold sector at the bottom of the market back in March, to the most overbought sector today.

But that run is going to come to an end. And the aftermath will be ugly.

Take a look at this chart of the Bullish Percent Index for the Banking Sector (BPFINA)...

A bullish percent index is an indicator of overbought and oversold conditions. The BPFINA measures the percentage of banking stocks trading with bullish technical patterns. It can range between 0 and 100. The index is oversold below 30 and overbought above 70.

Back in March, BPFINA dropped below 5 – meaning fewer than 5% of all the stocks in the banking sector had bullish technical patterns. While not necessarily a buy signal, an oversold reading that extreme is a pretty good sign that the downside is limited.

Today, we're looking at the exact opposite situation. Last week, the BPFINA touched close to 90 – meaning 90% of the stocks in the financial sector are trading with bullish chart patterns. This is one of the most extreme overbought readings of the past decade.

Extreme overbought readings don't necessarily lead to sell signals, but they're a pretty good indication that the upside from here on out is limited.

Traders should always be looking to fade extreme one-way moves. In other words, find a way to profit as the extreme condition reverts back to the normal average. Betting on a run higher for the financial sector back in March made a lot of sense.

Betting on a move lower now does, too.

http://www.growthstockwire.com/archive/ ... aug_18.asp

[winston]

Four financial titans, Citigroup, Bank of America, Freddie Mac and Fannie Mae are credited with over 40% of all NYSE volume in August with each gaining more that 100% from the lows.