Search

A weak economy, volatile markets, and regulatory changes may lead to a wave of job cuts among banks and securities firms. Securities-industry employment has dropped 6.7% since 2007.

The U.S. government claims that Credit Suisse Group, among other banks, illegally handled money belonging to Iran and deliberately concealed the transactions. The funds were to be used to buy supplies to manufacture weapons. Credit Suisse expects to pay $536 million in penalties resulting from the investigation.

Barclays PLC is close to completing the sale of its investment firm iShares which is expected to fetch over $5 billion. The sale would give Barclays a boost in capital, even though U.K. regulators have certified the bank has sufficient funds. News of the sale caused Barclays's shares to rise 24% to 173.80 pence in Friday trading.

The U.K. Revenue and Customs department is investigating whether Barclays PLC set up offshore financial structures with other U.S. and European banks with the purpose of avoiding taxes. The inquiry was initiated after internal bank documents were leaked to the British opposition party. It will first have to be determined whether Barclays' transactions were illegal.

In a second bailout effort, the U.K. government has agreed to insure 250 billion pounds sterling of Lloyds TSB Group PLC's troubled assets. In exchange, the government's present stake of 43% in Lloyds is likely to surpass 50% and could increase to as much as 77%. 83% of Lloyds' troubled assets were acquired through its acquisition of mortgage bank HBOS PLC.

Byline: SARA SCHAEFER MUNOZ AND CARRICK MOLLENKAMP A year after touting that Lloyds TSB Group PLC had sidestepped the financial crisis, chief executive officer Eric Daniels faces a harsh new [...]

Because of losses in its U.S. retail banking business and write-downs on trading assets, HSBC Holdings PLC reports a 70% drop in net profit to $5.72 billion in 2008, down from profit of $19.1 billion in 2007. The company announced plans to raise $17.9 billion through a rights issue to current shareholders. In a effort to conserve cash, HSBC will cut its dividend by 30% and reduce its consumer-lending business in the U.S.

To trim expenses and shore up its finances, HSBC Holdings PLC will close about 800 retail-banking branches in the U.S., stop offering auto and personal loans within the U.S. market, and raise 12 billion pounds sterling through a rights issue to existing shareholders. It is speculated the bank will use the additional capital to buy assets from competitors at discounted prices. HSBC is expected to report a pre-tax profit drop of 11% to $21 billion for the fiscal year 2008.

Byline: SARA SCHAFER MUNOZ, DANA CIMILLUCA, CARRICK MOLLENKAMP; WALL STREET JOURNAL STAFF LONDON -- Over the next several weeks, the U.K. government will make what could prove to be one [...]

Byline: CARRICK MOLLENKAMP, ALISTAIR MacDONALD AND SARA SCHAEFER MUNOZ; WALL STREET JOURNAL STAFF LONDON -- The British government is rushing out additions to its financial rescue plan, in an effort [...]

Because of trading losses, Deutsche Bank AG expects to post a fourth-quarter net loss of 4.8 billion euro. The announcement caused Deutsche's shares to fall 9% to 22.09 euro in Frankfurt trading. Article discusses steps taken by chief executive Josef Ackermann to restructure the bank and veer it away from high-risk investments.

Byline: CARRICK MOLLENKAMP, ALISTAIR MACDONALD, SARA SCHAEFE The British government is racing to expand an ambitious financial rescue plan that so far has failed to spark economic revival. But it [...]

Byline: CARRICK MOLLENKAMP AND ALISTAIR MacDONALD LONDON -- A new British lending survey shows banks sharply tightening credit to households and companies, intensifying worries that the government's £500-billion ($877-billion) bank-rescue [...]

Credit Suisse Group reports losses of three billion Swiss francs in October and November, and unveils plans to cut about two billion francs in costs by laying off 11% of its global workforce or 5,300 employees. Article discusses Credit Suisse's earnings forecasts for its fiscal fourth quarter, and efforts to minimize its exposure within the securities market.

Deutsche Bank AG's chief executive Josef Ackermann outlines his plan to restructure the company's operations. Mr. Ackermann plans to focus on growth and volume businesses such as commodities trading, reduce the volume of lending, cut back on investment banking, and increase its retail-banking operations. For its fiscal third quarter, the bank reported losses of 1.26 billion euro. On Monday, Deutsche Bank's shares rose 24% to 23.25 euro in Frankfurt trading.

In a meeting with shareholders, Barclays PLC receives reluctant approval from investors to raise 7 billion pounds sterling in capital. The move keeps the U.K. government from gaining control of the bank but transfers one-third ownership to Middle Eastern investors under preferred terms. On Monday, Barclay's shares rose 13 pence to 1.47 pounds sterling.

Byline: DAVID ENRICH AND CARRICK MOLLENKAMP Citigroup Inc. is nearing agreement with U.S. government officials to create a structure that would house some of the financial giant's risky assets, according [...]

Boosted by new regulations for reporting write-downs, Deutsche Bank AG posted a better-than-expected third-quarter net income of 414 million euro, a drop from 1.6 billion euro a year earlier. Without the accounting changes, the bank would have reported 122 million euro in losses. The changes to the International Accounting Standard 39 allowed the bank to recategorize 24.9 billion euro of loan exposure, and avoid posting 845 million euro in write-downs. Deutsche's shares rose 18% to 29.20 euro on the Frankfurt Stock Exchange.

In a move to boost the country's ailing banking system, the U.K. government plans to offer to buy stakes in Royal Bank of Scotland Group PLC, Barclays PLC, HBOS PLC, and Lloyds TSB Group. The bailout package may total as much as 50 billion pounds sterling. Article discusses conditions within the British banking sector including bank-to-bank lending, bank stock prices, bank earnings, interest rates, loan defaults, and loan-to-deposit ratio.

Forced to default on its financial obligations because of a drop in the value of its investments, U.K. fund Sigma Finance Corp. faces imminent liquidation. Sigma's creditors are expected to liquidate $25 billion in collateral consisting mostly of bank-issued bonds to fulfil the company's $6-billion debt. Article discusses Sigma's credit ratings, relations with investors, and negotiations with creditors.

Immediately before filing for Chapter 11 bankruptcy and before the sale of its U.S. brokerage business to Barclays PLC, Lehman Brothers Holdings Inc. transferred more than $8 billion in funds from its European unit to its New York headquarters raising concerns about the appropriateness of the company's actions. Lehman Holdings' European branch, Lehman Brothers International (Europe), is currently negotiating its acquisition by Japanese investment bank Nomura Holdings Inc. and plans to seek repayment of the $8 billion from its parent company. Before approving Lehman Holdings' sale to Barclays, a bankruptcy court judge opined that any issues related to the money transfers should be addressed later and not delay the company's sale. Other Lehman Holdings' units and clients in Europe and Asia may raise opposition to the transfers which may warrant investigation.

Byline: CARRICK MOLLENKAMP, JEFFREY MCCRACKEN AND JOELLEN PERRY; David Crawford and Dana Cimilluca contributed to this article. Lehman Brothers Holdings Inc. moved billions of dollars and assets among its units [...]

Byline: CARRICK MOLLENKAMP, JEANNE WHALEN AND DANA CIMILLUCA; WALL STREET JOURNAL STAFF LONDON -- Ending days of uncertainty for Lehman Brothers Holding Inc. employees here, the firm's insolvency administrator said [...]

Despite central banks' efforts to keep money flowing between financial institutions, banks have abruptly stopped lending each other money or are resorting to exorbitant interest rates in the wake of Lehman Brothers Holdings Inc.'s bankruptcy and American International Group Inc.'s takeover by the U.S. government. On Tuesday, the London Inter-bank Offered Rate, Libor, more than doubled overnight to 6.4375% and long-term Libor rates have also risen sharply. Article discusses financial institutions' share value, governmental lending to banks, and the creation of a private borrowing-fund by U.S. financial companies.

In a last-minute effort to preserve many of the company's jobs and operations, financially-troubled Lehman Brothers Holdings Inc. is negotiating the sale of a large portion of its assets to U.K. bank Barclays PLC. Lehman Holdings is currently under Chapter 11 protection, but the company is allowed to sell assets outside the holding company while retaining troubled assets within for creditors to liquidate. If a deal is reached, Lehman would transfer assets to Barclay free of any encumbrances.

The U.S. financial market is in turmoil as recent developments within Lehman Brothers Holdings Inc., Merrill Lynch & Co, and insurance giant American International Group Inc. raise doubts about the future of these companies and shake investors' confidence. Lehman is actively seeking a buyer but faces hurdles as prospective suitors walk away because the U.S. government refuses to cover any losses resulting from the acquisition. The company faces possible liquidation and may file for Chapter 11 protection. Bank of America has bought Merrill Lynch for $50 billion or $29 per share. AIG is trying to raise $40 billion to prevent a credit-rating downgrade and has appealed for emergency funding to the U.S. Federal Reserve. In related news, 10 financial institutions are planning to create a $70-billion fund to finance the possible purchase of liquidated assets.

After announcing a company-wide overhaul program that included the sale of its investment-management business and the spin-off of its commercial real estate operations, investment bank Lehman Brothers Holdings Inc. is actively seeking a buyer in an effort to stop the plummeting value of its share. Lehman has posted losses totaling $6.7 billion in its past two fiscal quarters mostly stemming from the U.S. mortgage market crisis. On Thursday, Lehman's stock dropped 48% to close down 42% at $4.22 on the New York Stock Exchange. Article discusses Lehman's potential buyers, and possible U.S. government participation in the acquisition process.

Byline: MATTHEW KARNITSCHNIG, CARRICK MOLLENKAMP, SUSANNE CRAIG AND ANNELENA LOBB; Aaron Lucchetti, Deborah Solomon and Dan Fitzpatrick contributed to this article. The investment bank Lehman Brothers Holdings Inc. spent yesterday [...]

Byline: CARRICK MOLLENKAMP AND NEIL SHAH LONDON -- After its most serious breakdown in eight years, the London Stock Exchange faces a difficult task: Convincing traders and investors that it [...]

After Commerzbank AG's acquisition of Dresdner Bank AG for 9.8 billion euro, Commerzbank's CEO Martin Blessing outlines the new company's immediate plans that include focusing on the German retail banking sector, personnel cutbacks, bank branch closures, cost-control measures, and reduction of Dresdner's investment-banking operations. The combined Commerzbank-Dresdner entity will have 1.1 trillion euro in assets and more bank branches than Deutsche Bank. On Monday, Commerzbank's shares dropped 10% to close at 18.04 euro on the Frankfurt stock exchange.

In an effort to decrease risk and improve profitability in a global credit market crisis, financial giant UBS AG plans to separate its investment-banking, and private-banking units. UBS will cut its investment-banking unit's access to low-cost funding while making the unit's executives' compensation dependant on the bank's performance. It is speculated that UBS may eventually spin-off or sell its investment bank. On Tuesday, UBS reported a loss of $329.3 million for its second quarter.

Financial giant UBS AG is expected to undergo organizational changes as the company prepares to report second-quarter results on Tuesday. The changes are likely to include the sale of UBS's money-management and brokerage unit in the U.S., and investment bank. UBS's bad investment write-downs could reach $43 billion. In a settlement with U.S. authorities, UBS will also buy back $19 billion in auction-rate securities following allegations of securities fraud. Also, UBS private bankers are being investigated by U.S. authorities for allegedly helping clients evade taxes.

Amidst shareholder opposition to plans to raise $13.1 billion in capital, bank Fortis N.V. announces the replacement of CEO Jean-Paul Votron who will be temporarily substituted by Deputy CEO Herman Verwilst until a new chief executive is found. Article discusses Fortis's management, finances, and growth under Votron's directorship.

UBS AG's new chairman, Peter Kurer, announces executive board changes which include appointing independent directors, and streamlining the board's decision-making process. Article discusses UBS's recent losses stemming from the global credit crisis, financial standing, stock value, shareholder relations, and tax-evasion probe by U.S. authorities.

Belgian bank Fortis N.V. is expected to receive a 400-million-euro capital infusion from Russian billionaire Suleiman Kerimov through his venture capital company Millennium Group as part of Fortis's announced 1.5 billion share issue. Article discusses Fortis's plans to raise 8.3 billion in capital, relations with new investors, financial standing, and share value.

Byline: CARRICK MOLLENKAMP; Alistair MacDonald contributed to this article LONDON -- After insisting for months that there were no problems with its benchmark interest rate, the British Bankers' Association said [...]

Despite $3.3 billion in write-downs from its mortgage business and other failed investments, Barclays PLC announces an unspecified net profit increase for the first quarter of 2008. Article discusses Barclays's financial standing, stock value, access to capital, and profit and revenue prospects for the rest of 2008.

Swiss bank UBS AG's private banking branch is being investigated by the U.S. Department of Justice and the Securities and Exchange Commission over alleged tax evasion and possible failure to obtain the proper credentials to operate as a securities broker within the U.S. Article discusses UBS's tarnished image stemming from tax evasion probes in Europe, $38 billion write-downs, reported first-quarter net losses of $10.97 billion, and planned layoffs.

Byline: CARRICK MOLLENKAMP AND MARK WHITEHOUSE The troubles of banks in Europe are pushing up an interest rate widely used in the U.S., prompting the idea of a U.S.-based alternative [...]

The London interbank offered rate rose for the second time in as many days, and just two days after an announcement by the British Bankers' Association that it launched an investigation into the borrowing rates banks have reported to it. The BBA oversees interest rate calculation. Six-month Libor is currently at 2.7%; interest bills for commercial and residential borrowers are expected to increase.

The Bank of England and the British Treasury have developed a plan to find placement for hard-to-sell mortgages that are currently preventing the making of new loans by commercial banks. The plan would permit banks to swap approximately $100 bil in mortgages for UK government securities; however, economists believe this is too small a sum to make a significant difference.

The Bank of England is considering measures that would assist banks in obtaining placement for mortgages they are having difficulty in selling and that are building up on their balance sheets. BOE may accept up to $59.1 bil in mortgages as collateral for government securities loans.

Byline: CARRICK MOLLENKAMP AND MARK WHITEHOUSE; Alistair MacDonald and Ragnhild Kjetland contributed to this article LONDON -- The Bank of England is putting the final touches on its most aggressive [...]

There is concern among traders and bankers that the London interbank offered rate, Libor, is growing unreliable as a key indicator of the industry's status. Some banks may be withholding reports of the higher rates being paid for short-term loans, resulting in artificially low loan rates for borrowers.

Byline: CARRICK MOLLENKAMP LONDON -- One of the most important barometers of the world's financial health could be sending false signals. In a development that has implications for borrowers everywhere, [...]

Deutsche Bank AG plans to sell up to $20 bil of leveraged buyout-related debt to various investors, including private equity firms. The bank intends to sell the debt in parcels, as opposed to a packaged sum.

In a letter to financial giant UBS AG, investor and former bank president Luqman Arnold urges the company to break up its investment and private banking branches, and sell the investment bank and asset management business to raise funds in a troubled capital market. Article discusses the bank's recent $37.7 billion losses, stock value, relations with investors, and possible reorganization.

Investment banks UBS AG's and Lehman Brothers Holdings' announcement of new capital raising bolstered international stock markets, and increased the value of the companies' stocks. Article discusses the companies' recent losses, investor relations, reorganization, executive changes, and economic recovery in a troubled capital market.

In an effort to reactivate capital markets, the European Central Bank announces it will offer 60 billion euro in six-month loans to banking institutions. Article discusses measures taken by European central banks and the U.S. Federal Reserve Board to encourage bank-to-bank long-time lending, and prospects for the recovery of the corporate funding markets.