All GLG News Analyses Filed Under: Commercial & Retail Banking

Consumer Business Continues to Drag Down HSBC Profits

August 6, 2009

Analysis by: GLG Expert Contributor

Analysis of:HSBC profit halves to £3 bln | uk.reuters.com

HSBC first half pretax profit fell to $5.02 billion from $10.2 billion a year earlier.  Investment banking  profits grew to $6.3 billion from $2.7 billion.  However, profits in the personal finance businesses turned from a $2.3 billion profit to a $1.25 billion loss.  The main driver is increases in loan impairment charges from $3.9 billion to $13.93 billion.  HSBC management is cautiously optimistic about prospects for economic recovery.

New financial ages become under slogan "Lend selectively" for European banks

August 3, 2009

Analysis by: GLG Expert Contributor

Analysis of:European banks focus on risk, lend selectively | uk.reuters.com

Tight financing is the reason for investments delaying across Europe. The moto of the Banker - The Bigger is better- makes the economic life of SME harder than previous. Another point of view - There is no credit crunch. Government-backed banks aggressively expanding on midcap market.

Deutsche Banks Conservative Approach for Sustainable Success

July 30, 2009

Analysis by: GLG Expert Contributor

Analysis of:Deutsche Bank Raises Bad-Loan Provisions, Sending Shares Lower | www.bloomberg.com

Deutsche Banks significant bad debt provisions follow suit to the banks general conservative approach to market developments and provide a basis for continued sustainable business. It is a sound judgement call in respect of the increasing risk of the financial crisis hitting businesses.

The impact of size on regulatory reform planning

July 29, 2009

Analysis by: GLG Expert Contributor

Analysis of:Bank reform must not fade away | business.timesonline.co.uk

Size has become an issue in regulatory reform because of the "too big to fail" dilemma faced by world governments. Some nations are considering breaking up large institutions so than none are left so large as to create systematic risk from their potential failure. The analysis proposes a more market-driven solution.

Duncan MacDonaldConsultantDuncan McDonald

Turmoil at Visa or a hopeful turn in the road?

July 28, 2009

Analysis of:Visa Says Its President Steps Aside | online.wsj.com

The termination of Visa's president reflects the crisis in the bankcard industry. Since its IPO, investors, issuers and merchants been waiting for Visa to lead the industry to new heights. That has not happened. In fact, things have gotten worse. Cardholders, merchants, Congress and states are in rebellion against the industry, which has all but given up on innovation.

Retailers do not need private cards

July 20, 2009

Analysis by: GLG Expert Contributor

Analysis of:Card Fees Pit Retailers Against Banks | www.nytimes.com

Retailers must focus on selling goods and services and allow the numerous financial institutions to manage credit & debit for the consumers. Closed loop credit is not an impact on net new sales and normally will not drive the large ticket purchases as most consumers do not require more credit in order to make a purchase. There are a myriad of opportunities to offer bank branded cards that provide identity and financial wealth sharing. Uncrowd the market.

Bank of Ireland says no current need for rights issue

July 20, 2009

Analysis by: GLG Expert Contributor

Analysis of:Bank of Ireland says no current need for rights issue | uk.reuters.com

Bank of Ireland is adequately capitalised and does not need additional capital to survive through the recession. However, the Irish Government can convert €1.5 bn preferred shares into common/ordinary stock at 0.20c a share which would represent a massive dilution of existing shareholdings as the shares are currently trading at or above €1.50. If Bank of Ireland can raise capital from existing shareholders before the end of 2009, this dilution will be avoided.

Mark MariottiChief Executive OfficerFuture Management Holdings Inc

Where (or what) is the SBA?

July 13, 2009

Analysis of:goldman says it has ‘no material exposure’ to cit (update1) - bloomberg.com | www.bloomberg.com

The latest news regarding CIT  is not good. Fitch Ratings downgraded its ratings for CIT Group Inc. deeper into junk status on Wednesday. From my personal experience and public information, CIT is the third big-bank lender to destroy small-business access to credit.

ACL is one of Thailand's smallest bank

July 3, 2009

Analysis by: GLG Expert Contributor

Analysis of:Bangkok Bank Agrees to Sell ACL Bank Stake to ICBC | www.bloomberg.com

1) Why is one of the world's largest bank by market capitalization, Industrial and Commercial Bank of China (ICBC), interested in buying ACL, one of Thailand's smallest bank? 2) Bangkok Bank has been trying to 'unload' its 19% stake in ACL since 2007. It seems that this time the price is right. 3) Will Thailand's Ministry of Finance agrees to this? The Thai government owns nearly 31% of ACL.

Michael LynchConsultantMichael E. Lynch

California, down $24 billion, copes with citizens revolt against more taxes

June 22, 2009

Analysis of:States Turning to Last Resorts in Budget Crisis | www.nytimes.com

Abby Goodnough reported in the June 22 issue of the New York Times that revenues of several U.S. states were in free fall. Hawaii, California, Maine, Idaho, Illinois and Massachusetts are among the troubled group. California faces a $24 billion deficit for the coming fiscal year. Governors and legislatures are approving program cuts, layoffs and tax increases. Federal stimulus money was the only thing that prevented paralysis. Even with the stimulus, 19 states are struggling. Governors and legislators of the same party find themselves at odds. Legislators have never dealt with a recession like this. The environment is tense. States face a $121 billion deficit for the coming fiscal year. The recession has politically damaged for some governors. Raising revenue by new taxation is the surest way to ensure financial stability after the stimulus money disappears. In California, lawmakers are scrambling to close the $24 billion gap. Voters recently rejected measures to raise taxes.

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