All GLG News Analyses Filed Under: Commercial & Retail Banking

Small Firm Loan Funds - An Independent Leasing Sector is a Better Long Term Solution

February 10, 2009

Analysis by: GLG Expert Contributor

Analysis of:RBS, NatWest Plan to Add 3 Bln Pounds to Small-Firm Loan Fund | www.bloomberg.com

15 years ago any discussion of stimulating credit for small firms would have included the role of big, independent leasing companies.  Where are they now?  Two decades of global consolidations has deprived governments and capital markets of a large scale independent alternative to one stop shop financial services platforms.  Investors and borrowers alike are clamoring for a credit model that is bounded, transparent and understandable. With high demand for credit, capital markets looking for an alternative home for funds, and a lack of trust in existing platforms, an independent leasing sector is a better long term solution.

BNP Paribas vs Fortis: Time is now for Reason and Statemanship to dominate Greed, Sentimentalism and Political Shorttermism.

February 9, 2009

Analysis by: GLG Expert Contributor

Analysis of:Will a renegotiated deal seal BNP’s messy purchase of a Belgian bank? | www.economist.com

In September the governments of Belgium, the Netherlands and Luxembourg all injected capital to stabilise Fortis Bank . The Dutch then nationalised their bits of Fortis (including ABN Amro) and the Belgians  agreed to sell to BNP Paribas the "Belgian" businesses of Fortis. BNP Paribas still awaits confirmation of the transaction., which was suspended by the Court of Appeals. Even a vote by Fortis shareholders  on February 11th may not end the saga, despite that BNP Paribas and the new Belgian government have tried to sweeten the deal. Ping An, a Chinese insurer that is Fortis’s biggest investor, is reportedly planning to say “no” to the deal. In an extreme scenario the Belgian government could let Fortis holding company go bankrupt, leaving the shareholders without anything and finalize the sale of Fortis Bank to BNP Paribas, even though the political and legal fallout would be very considerable, for the Fortis saga touches about 2/3 of all Belgian households.

Harnath SithamrajuConsultantHarnath Sithamraju

Which is first - Job or Bonus ?

February 9, 2009

Analysis of:'Idiots' Indeed | online.wsj.com

1. Bonus is paid based on performance- nothing new about it. 2. Government intervenes and can set the agenda.After all it is the tax payer's money.

George PughPresidentGeorge Pugh & Co

Paying Banker Bonuses: Good Business?

February 3, 2009

Analysis of:'Idiots' Indeed | online.wsj.com

In the Wall Street Journal opinion, paying off the $18 billion in bonus pool is just good sense. The only real problem was that some bankers exercised poor timing.  “John Thain's year-end bonuses to Merrill Lynch executives, whatever their rationale, reflected an acute case of political tin ear.” The Journal also feels that the compensation is mislabel: it is not bonuses at all, but rather like tips, constituting the majority of the employees compensations and it has the bonus pool in way has fallen to the insignificant level of about $112,000 person, and paying them will help the NYC. The Opinion Page opposes any limits on employee compensation for fear of harm to the business motivation.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Banking Sector and The Reform of Markets - An Accountant's View

January 29, 2009

Analysis of:Banks boosted as Geithner talks of a clean-up | www.ft.com

Ever since the meltdown in derivatives started effecting the banking sector and clogged house prices, mortgages and credit in the US, British and other global markets the authorities in most major markets have been trying their best to get the system on track. The referred article speaks of certain possible positions being considered by the Obama administration. In this analysis I speak of why the options being considered do not make sense to my mind.

Bad loans in Asia will be revealed

January 22, 2009

Analysis by: GLG Expert Contributor

Analysis of:HSBC Sticks With China as RBS, UBS Sell Investments | www.bloomberg.com

Information has value. It is revealed only for consideration or because it is legally required. In Asia since the legal infrastructure is weak, it will take time for the information to come to light.

Citigroup Financial Services Split Will Be Done!

January 22, 2009

Analysis by: GLG Expert Contributor

Analysis of:Citigroup Plans to Split Itself Up, Taking Apart the Financial Supermarket | www.nytimes.com

There are a variety of reasons that this split will be successful: 1. Citigroup will pawn off its bad assets to the Federal Government.2. The "Good" Citigroup remaining, while somewhat under the Federal Government scrutiny and control, will still remain a viable and profitable firm through the sale of assets and reduced cost infrastructure.3. The Federal Government will eventually (5-7 years +) will benefit from the sale of some of the toxic assets they will hold to some prudent investors, who will review and dissect the toxic assets and purchase them from the Federal Government and sell selected products that have value.  All do not have value, but upon analysis some assets will have value and exceed the prices the Federal Government will have paid so it becomes a WIN for the Federal Government, hence the US Taxpayer.   

Can restaurant operators find funds to grow their brands?

January 21, 2009

Analysis by: GLG Expert Contributor

Analysis of:Quality Operators Win Out In Lean Lending Markets | www.nrn.com

- The restaurant industry is competing with other industries for funds to expand their brands. More scrutiny on past performance and accuracy of projections is being put on executives seeking funds for new ventures, new stores or acquisitions.  - Restaurant business plans are more important than ever and must contain realistic data and projections in addition to a realistic assessment of macro economic factors such as commodity pricing. - Expertise in approaching banks and bankers has never been more important. Speaking their language, knowing what they are looking for and being able to respond quickly and efficiently can positively affect the operators ablity to secure financing. In some cases, consultants with this ability are worth their fees.

Paul EqualePresidentEQUALE AND ASSOCIATES

What Goes Around, Comes Around....Eventually

January 15, 2009

Analysis of:Citigroup Ready to Shrink Itself by a Third | online.wsj.com

The history of of the banking cycle is rife with examples of boom and bust, just like the business cycle.  The regulatory approach of the federal government is a key aspect of that cycle.  How did the optimism of the late 1990's turn so quickly to our current situation.  A look at a previous period in our nation's history can help to illuminate some of today's issues.

Bill BradwayFounder & Managing DirectorBradway Research, LLC

Citigroup: Will Breaking Up Be Hard to Do (Well)?

January 15, 2009

Analysis of:Citigroup Plans to Split Itself Up, Taking Apart the Financial Supermarket | www.nytimes.com

Citigroup, still suffering from credit related losses, is now planning to spin its Smith Barney unit into a joint venture with Morgan Stanley. Other Citigroup business units are rumored to be on the block for divestiture. Government regulators appear to be forcing this action to happen sooner rather than later. Can Citigroup succeed at breaking up its financial supermarket? Is this the end of the financial supermarket model for all big banks?

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