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BNP Paribas on Tuesday launched a €4.3bn ($6.3bn) cash call, becoming the latest bank to buy itself out of a government bail-out.
France’s biggest bank said it would use the funds to repay €5.1bn of non-voting stock issued to the French government this year in addition to a €226m interest payment.
The bank is offering 107.6m new shares at €40 each – a 30 per cent discount to Monday’s closing price of €56.57. The one-for-10 issue is fully underwritten.

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Banks

Citigroup has reshuffled its senior ranks once again, removing its chief financial officer Ned Kelly after less than four months in the job, after coming under pressure from regulators and struggling to revive many of its ailing businesses.

Once seen as a potential successor to Vikram Pandit as chief executive, Mr Kelly will become vice-chairman with responsibility for mergers and acquisitions and strategy.

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Banks

Wells Fargo said Thursday that it is likely to report a bigger-than-expected profit of about $3 billion for the first quarter, offering an early look at its financial results ahead of the highly anticipated earnings season for the nation’s banks.

The company also said its merger with Wachovia, the troubled lender it bought late last year, has “exceeded expectations” and that its accounting markdowns are still in line with those from Dec. 31, when the deal closed.

Wall Street cheered the results, sending shares of Wells Fargo up 33 percent in premarket trading Thursday.

Investors have been anxiously awaiting first-quarter updates from United States banks, which are struggling with deep losses from mortgages and, increasingly, other kinds of debt such as credit cards. Wells Fargo had been scheduled to report its results on April 22

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Banks

HSBC Holdings said Sunday that it had raised nearly $18 billion by issuing new shares to investors, one of the largest such offerings in British history, The New York Times’s David Jolly reported.

To strengthen its finances, the bank sold 4.9 billion shares, or 96.6 percent of the stock offered, to existing shareholders at £2.54, or $3.77, each. Shares in the so-called rights issue were sold at a 41 percent discount to the company’s closing share price in London on Friday and yielded HSBC $17.7 billion net of expenses.

“We remain confident that HSBC is well-placed in today’s environment and that our strength leads to opportunity,” HSBC’s chairman, Stephen K. Green, said in a written statement.

HSBC said it expected to place the remaining 3.4 percent of the offering on Monday but any unsold shares would be acquired by its underwriters, led by Goldman Sachs International and JPMorgan Cazenove.

HSBC said in March that it would seek the financing and cut about 6,100 jobs. The bank said it was trying to reposition itself for the economic crisis and seeking flexibility to make acquisitions or take market share from weakened competitors.

Two British rivals, the Lloyds Banking Group and Royal Bank of Scotland, have taken taxpayer cash, giving Prime Minister Gordon Brown’s government majority stakes in their businesses.

Another rival, Barclays, sought cash from Abu Dhabi and Qatar last year to avoid a government bailout. Barclays is now in talks with CVC Capital Partners, a private equity firm, to sell iShares, its exchange-traded funds business, in a deal worth as much as $4.3 billion.

With investors wary, even strong banks have had to raise capital to maintain their relative positions.

HSBC remains a leader in providing financial services in emerging markets. But a major 2002 move into the American market through the acquisition of Household Finance, a subprime mortgage lender, has been an albatross around its neck, costing billions of dollars in loan impairments and goodwill write-downs. It plans to shut the bu

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Banks

Shares in Spanish banks sank Monday after the government announced its first significant bank bailout in 16 years and fueled worries that other financial institutions might need to be rescued, The New York Times’s Victoria Burnett reported.

The Bank of Spain said Sunday that it would take over management of Caja de Ahorros Castilla-La Mancha, a regional savings bank, and inject liquidity into the bank, backed by government loan guarantees of up to 9 billion euros, or $11.8 billion.

The central bank said in a statement Monday that the bank, known as C.C.M., was solvent but that its capital position and financial outlook were such that the regulator had to intervene. C.C.M. represents less than 1 percent of the Spanish banking system, the regulator said.

The decision shook confidence in the solvency of other Spanish banks which until now had avoided the troubles of banks elsewhere in Europe and the United States, The Times said. Shares in Banco Santander, one of the largest banks in Europe by market capital, closed down 7.5 percent at 4.94 euros on Monday. Shares in BBVA, the second largest bank in Spain, traded 7.7 percent lower at 5.84 euros.

Spain’s strict regulations require banks to keep large provisions to cover bad loans and they also discouraged them from buying the toxic financial products that prompted the collapse of banks elsewhere. But Spanish banks are owed billions of euros by construction companies that are trying to refinance loans or have declared bankruptcy. Finance Minister Pedro Solbes said Monday that the financial sector in Spain was “enormously solid,” though he acknowledged that the banks in the country were not immune to the effects of a global economic crisis.

Spain’s unlisted regional savings banks, or cajas, which are partly run by the regional governments, are viewed as particularly vulnerable as they have made big loans to regional construction companies in recent years. The regional savings banks had nonperforming or delinquent loans equivalent to 4.4 percent of total loans in J

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Banks

The largest 15 global banks are expected to further shrink their balance sheet by about $2 trillion in 2009 and longer-term return on equity will remain subdued for the next two years, Reuters said, citing a joint report from Morgan Stanley and Oliver Wyman.

The balance sheet shrinkage will continue to have a huge impact on liquidity and provision of capital, hence it is critical confidence is restored soon, in particular to help real money investors buy credit assets, the analysts from both the firms wrote in a note to clients.

A rebound in profit before provisions and markdowns is expected in 2009 and will be led by rates, foreign exchange, flow credit and commodities, even though the industry was likely to see “material” write-downs, the analysts said.

Post markdowns, the analysts expect 2009 net revenue to be around the levels seen in 2003-2004, but said they were concerned that further to 2010 the revenue rebuild in 2009 is unlikely to have real momentum.

“We anticipate some of the repricing will calm a little, the volatility markets will come off the record highs, some of the hedging in the credit markets will have played out and the equity markets will require more time to rebound,” they said.

The financial crisis has forced banks including Citigroup to Bank of America, UBS and Royal Bank of Scotland to fire thousands of workers and take billions of dollars in government aid because of debt write-downs.

Morgan Stanley, which has an “equal-weight” rating on Citigroup stock, said it expects Citi to benefit more than peers if the environment improves, but added that the company has the largest legacy portfolio of risky assets in the brokerage’s coverage group.

For Bank of America, Morgan Stanley analysts see large consumer exposure, particularly from the Countrywide acquisition, where they estimate an additional $6 billion in credit costs over Bank of America’s mark to market.

The brokerage said its top European pick remained Credit Suisse Group saying the bank has better potential for book value grow

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Banks

Investors approved HSBC Holdings Plc's record $18.4 billion rights issue on Thursday, which the bank said would keep it financially strong as it faced "unprecedented turmoil."

The bank said over 99% of shareholders who voted supported the rights issue and 92.9% approved a related resolution allowing the bank to briefly disapply preemption rights for some investors.

"We are still facing unprecedented turmoil, with major uncertainties ahead. We are determined HSBC should maintain its signature financial strength," Chairman Stephen Green said at a shareholder meeting ahead of the vote.

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Banks Crisis

Three of the world's biggest banks on Thursday embarked on fresh steps to boost their balance sheets, as governments moved to crack down on excesses that may have fueled the global credit crisis.

The moves by HSBC Holdings Plc, Citigroup Inc and UBS AG and are the latest corporate efforts to repair or regain their financial health, allowing them to lend more as central banks move aggressively to pump liquidity into the financial system.

HSBC won approval for a record 12.9 billion pound ($18.7 billion) rights issue to withstand market turmoil. "We are determined HSBC should maintain its signature financial strength," Chairman Stephen Green said before shareholders overwhelmingly approved the issue.

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banks Crisis

The head of Mexico's bank association urged the government on Thursday to make a speedy decision about whether Citigroup (C.N) must sell its prized Banamex subsidiary.

Mexican government sources said on Wednesday that a statement was imminent about whether the U.S. government's plan to take as much as a 36 percent equity stake in Citi would put Banamex in violation of Mexican law.

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Mexico Banks

ACAPULCO, Mexico, March 19 (Reuters) - Mexico's Banorte bank said on Thursday it is buying the remaining 30 percent stake in the Texas-based Inter National Bank for $150 million.

Chief Executive Alejandro Valenzuela told Reuters that Banorte (GFNORTEO.MX) would likely post credit growth of up to 12 percent this year, outperforming the market.

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Banks Mexico

Citigroup Inc. (NYSE:C) and Morgan Stanley (NYSE:MS) are running out of shares to compensate employees, according to an article in The Wall Street Journal.

The two Wall Street firms reportedly are searching for ways to free up stock as well as some funds for bonuses salaries. Both banks have been hit hard by the market, and the lower share prices mean that the banks have to dole out a larger number of shares to employees to meet compensation agreements. Citigroup -- whose stock has finally gone above $3 a share again, thanks to The Most Powerful Powerless Man on Wall Street Vikram Pandit's memo that said the bank is having a profitable 2009 (Sorry hedgies!) -- is finalizing plans to boost its share authorization to 40 billion shares or more, from the current 15 billion shares. Meanwhile, Morgan Stanley may have to follow Citi's lead.

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Banks Crisis

James Dimon, the chief executive of JPMorgan Chase, dismissed the growing calls to nationalize financial institutions and said lawmakers and pundits should stop girding for government takeovers.

"I don't know what they mean whey they say nationalization," he told reporters Wednesday after a speech at the U.S. Chamber of Commerce. "It wouldn't be a great thing to nationalize a lot of banks that are perfectly healthy. That would be a terrible mistake."

When it comes to unhealthy institutions, Dimon said, that is where the Federal Deposit Insurance Corp. should come in.

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Banks economy

The future for Big Tobacco may be to get even bigger. Mergers and acquisitions in the tobacco sector have been all but snuffed out by the economic crisis and the restrictions in credit. But deal-making in the industry could resume once the financial markets bounce back.

The tobacco industry has been in consolidation mode for quite some time. Since the beginning of 2007, there have been a number of deals including Altria’s purchase of UST last year for $11 billion, Japan Tobacco’s acquisition of Gallaher and Imperial Tobacco’s purchase of Altadis and Commonwealth Brands, just to name a few.

These mergers have been fueled by many factors, including product diversification and the desire to expand globally. But the main driver seems to be that he deals create real value. For example, the merger between R.J. Reynolds and Brown & Williamson in 2004 yielded $600 million in cost synergies and another $800 million in productivity improvements, according to UBS.

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m&a Banks

El banco suizo Credit Suisse anunció el inicio de su servicio de Banca Privada Doméstica en México, a través del Banco Credit Suisse México S.A. Esta prestación se suma a las otras que ya ofrecía esta entidad financiera en México, principalmente, a través de la Banca de Inversión.

Según Jorge Rodríguez, director ejecutivo de Banca Privada en México, se escogió este país luego de analizar cuáles eran los 10 puntos clave en el mundo donde el banco debía expandir su presencia. “México es uno de los países que muestran un atractivo ritmo de crecimiento de la riqueza en el mundo”, dijo el ejecutivo.

En este país quieren apuntar a dos tipos de clientes: tanto a jóvenes emprendedores como a inversionistas calificados y sofisticados que ya cuentan con un importante patrimonio y necesitan asesoría en su inversión financiera. ¿Buen momento para invertir” “En estos tiempos de crisis también hay oportunidades”, explicó Andrés Borrego, director general de Credit Suisse México. “Lo que es valora es una buena asesoría profesional”. Además, según los ejecutivos de esta entidad bancaria, en los últimos cuatro, cinco años el nivel de riqueza en México ha venido creciendo a tasas de entre un 7% y 11%.

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Banks

HSBC is changing its feathers. Two years ago, it was the canary in the global bank vault when it alerted the world to the problems of subprime mortgages. Now it’s on the verge of raising more than £12 billion.

The call for capital echoes its banking peers’ and suggests the financial crisis is lurching into an ugly new phase, Breakingviews says. And news reports over the weekend say the bank is going to cut back on lending in the United States.

That said, HSBC is in better health than most banks. Its Tier 1 capital ratio late last year was 8.9 percent, and its core Tier 1 ratio, a measure of true equity, was a hearty 7.8 percent. And unlike its rivals Citigroup and the Royal Bank of Scotland, HSBC hasn’t leaned on the state for extra capital or paid rich interest rates on preference shares.

Instead, HSBC looks ready to tap existing shareholders. With Goldman Sachs and JPMorgan Cazenove apparently on board to underwrite, it’s likely much of the issuance has already been taken up by institutions and hedge funds. Combined, it all suggests a measure of support for HSBC management, which is impressive in the face of a likely cut in the dividend.

Of course, with HSBC due to report annual results on Monday, the capital increase may coincide with the revelation of bad news. But before accounting for any asset write-downs, bad loans or dividend payout savings, the extra capital would push HSBC’s Tier 1 capital ratio close to 10 percent and provide a nice cushion against rising defaults, worsening unemployment and falling economic growth.

HSBC likes to be ahead of the pack, especially where capital is concerned. Snatching a big slug of it before nonfinancial companies swamp the market could give HSBC an edge for the day when valuations hit bottom, even if the timing and record size of its capital call suggest that day is still a long way off.

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Banks Financial Crisis

Struggling banking giant Citigroup Inc., moving aggressively to shore up its equity base, announced a stock swap Friday that if successful will leave the government owning more than a third of the company and wipe out nearly three-quarters of existing shareholders' stake.

The move is an acknowledgment that more than $50 billion in government capital and a backstop on more than $300 billion in troubled Citigroup assets haven't been enough to stop the bank's slide. It also represents a deepening of the government's role in trying to prop up the U.S. banking sector.

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Banks

The worsening U.S. economy prompted the Federal Deposit Insurance Corp. Friday to double its projected U.S. bank failure costs to more than $80 billion over a five-year period ending in 2013.

The 25 U.S. bank failures in 2008 cost the agency $18 billion, the FDIC said. Another $65 billion in bank failure costs is expected from 2009 to 2013, it said.

On Thursday, the FDIC announced that the number of problem U.S. banks jumped by nearly 50% to 252 in the fourth quarter of 2008.

FDIC staff recommended the agency assess U.S. banks a special one-time fee to raise as much as $15 billion to restore the fund being depleted by bank failures. The assessment of 20 basis points, which equates to $200,000 per $100 million in domestic deposits, in the third quarter would represent the first such move since 1996, when regulators took a similar action in the aftermath of the savings and loans crisis.

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Banks

Credit Suisse posted a worse-than-expected fourth-quarter net loss of 6 billion Swiss francs ($5.2 billion), taking it to its biggest-ever annual loss, due to poor trading and restructuring charges.

But the Swiss bank said 2009 started strongly and all its divisions were showing a profit in the year to date, echoing upbeat comments from rival UBS on Tuesday when it reported the biggest annual net loss in Swiss history, Reuters reports.

Switzerland’s second-largest bank said on Wednesday that its net loss for the full year was 8.2 billion francs, in line with what some Swiss newspapers had predicted but worse than the average analyst forecast of 6.3 billion.

Analysts polled by Reuters had expected the bank to turn in a 4 billion franc net loss for the quarter.

Shares in Credit Suisse were down 5.5 percent at 29.14 francs in morning trading, while UBS shares, which gained strongly on Tuesday, rose 0.2 percent to 13.64 francs, compared with a 1.7 percent weaker DJ Stoxx European banking index.

Credit Suisse had already warned in December that it made a net loss of about 3 billion francs in October and November and would take restructuring charges of about 900 million in the quarter as it moves to cut 5,300 jobs, or 11 percent of the workforce.

Analysts were also anticipating the 538 million franc loss it booked in the quarter for selling part of its fund management arm to Aberdeen Asset Management, but said they were surprised by the extent of trading losses in December.

Credit Suisse said its investment bank made significant losses in December due to standard hedges becoming ineffective due to market turmoil and as credit spreads widened.

“Results are negative and not much better than UBS in Q4. But there were lots of extraordinary items impacting,” West LB analyst Georg Kanders said. “Toxic assets are now less of an item. They have confirmed they have been significantly reduced.”

“Overall I would say that wealth management did much better than UBS. They have also had a positive start in January and just c

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Banks

UBS posted the biggest ever annual loss for a Swiss firm on Tuesday, but said client withdrawals reversed in January and it will axe 2,000 more jobs as it restructures to focus on wealth management.

UBS reported a $7 billion net loss in the fourth quarter, missing a Reuters poll forecast for $6.1 billion. UBS's loss for 2008 came in at $17 billion, above analysts' predictions for $16.2 billion.

The quarterly loss came on the back of a hefty $7.6 billion trading loss, as well as charges it made after selling billions in toxic assets to the Swiss National Bank when it was rescued by the state in October.

Chief Executive Officer Marcel Rohner told journalists that the world's biggest wealth manager was not paying a 2008 dividend but still aims to return to profit in 2009 after seeing some positive signs at the start of the year.

"While we leave a bad year behind us... we can nevertheless report substantial progress," Rohner said.

"Our businesses are well positioned for a challenging future. We had an encouraging start into the new year but the environment will remain difficult and volatile as the real economy has not seen (the) worst yet."

UBS continued to suffer massive outflows in the fourth quarter at its core wealth management business. But the Swiss bank said net new money had turned positive in both wealth management and asset management in January, the first time after a streak of negative quarters. It did not give details.

"In its outlook statement UBS indicates a strong start into 2009 and a reversal of the money flows. We remain skeptical as the clean-up of the mess will take several quarters," Dirk Becker, Kepler Capital Markets analyst, said in a note.

UBS stock swung sharply in early trade, rising as much as 7% before dipping 2% to trade at $10.93 by 4:10 am ET, broadly in line with a 2.3% weaker DJ Stoxx European banking index.

Vontobel analyst Marcel Staub said investors would continue to shun the stock as long as uncertainties remained: "We will have to wait-and-see if management's (overly)

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Banks

Goldman Sachs Group Inc. is set to find out just how much confidence investors still have in it with a plan to sell $2 billion in new debt without the government guarantee instituted last November.

The sale of the 10-year notes will make Goldman the only company in the FDIC program aside from GE Capital Corp. to offer standalone debt since the sales started Nov. 25.

While enough of the fallout from Lehman Brothers Holdings Inc. bankruptcy has subsided that Goldman feels safe enough to venture out again, it's still likely to have to offer a hefty premium. Bloomberg estimates that the senior notes may price to yield 500 basis points more than U.S. Treasuries of similar maturity. Senior notes in Goldman's last debt sale on April 22 priced to yield 237.5 basis points more than Treasuries of similar maturity.

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Banks Debt Markets