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’Euro banks are not very popular…
Major fallers across the continent (NOT just the banking sector):
UniCredit, of course, has already unveiled a €7.5bn cash call. It would seem that the guessing now is who is next.
A snap observation from Chintan Joshi at Nomura:
Snap news
Breaking pre-market news on Friday,
- BNP unveils new management team — statement and statement.
- RBS sells almost 1,000 pubs to Heineken — statement and statement.
- Randstad says demand for workers continued to slow in Q4 — statement.
Greek bond accounting, encore (et enfin?)
Or, more fun with Greek bond impairments as Rome (or Athens) burns.
BNP Paribas has sold billions of euros of Italian and Spanish bonds, with a few (€362m) losses according to its Q3 2011 results.
Snap news
Breaking pre-market news on Thursday,
- Greek finance minister is against holding a referendum — report and confirmation.
- BNP Paribas reports 72 per cent fall in Q3 earnings after taking bigger than expected 2bn Greek debt hit – statement.
EFSF to write CDS (with a two-way CSA and ISDA master)?
Or, how many acronyms does it take to make an FT Alphaville headline?
On Thursday, the FT reported on BNP Paribas’ proposal to have the EFSF write CDS on sovereign bonds.
This may of course smack straight into Article 125 of the Treaty on the Functioning of the European Union and die on impact.
The interview without answers
A *FAIL* of epic proportions from the comms department of BNP Paribas.
(click to enlarge)
The back-story here is that Handelsblatt interviewed BNP boss Baudouin Prot who subsequently insisted on revising his answers.
Retour au futur, le rumeur de French bank recap
French banks rallying on Monday:
Not hard to see the weekend’s trigger. As Bloomberg describes it:
The Journal du Dimanche reported Ramon Fernandez, head of the French Treasury, met with the heads of BNP Paribas (BNP) SA, Societe Generale (GLE) SA, Credit Agricole SA (ACA),
Marking to Greek myth
August 2: BNP Paribas marks Greek bonds down to model by 21 per cent, citing swap values and the disappearance of underlying market.
September 14: Market magically reappears long enough for BNP Paribas to say that even if they did follow its implied 55 per cent write-down,
Moody’s downgrades SocGen and Credit Agricole; BNP review extended
Moody’s downgraded long-term debt of Société Générale and Crédit Agricole, while keeping BNP Paribas on review; SocGen and Credit Agricole are also remaining on review over long-term funding.
The top lines from each statement follow.
Snap news
Breaking pre-market news on Monday,
- BNP Paribas targeting additional $60bn reduction in US dollar funding by end 2012; to sell €70bn of RWA’s — presentation.
- Swedbank halts share buyback programme;
Zut alors! – The French bank sell off… (Part deux)
A little earlier we drew attention to this quote from the Wall Street Journal:
“We can no longer borrow dollars. U.S. money-market funds are not lending to us anymore,” a bank executive for BNP Paribas,
Zut alors! The French bank sell off continues
Some more ‘Hard Facts’ from the French banking sector.
Tuesday’s early price action in SocGen and BNP Paribas.
A little snippet from Gary Jenkins of Evolution Securities:
SocGen’s attempt
BNP Paribas on BNP Paribas
We’re not sure if we’ve ever heard of a bank doing anything like this before. Ever. But here it is. Presenting BNP Paribas on BNP Paribas:
(Click image above for full FAQ or see here)
Includes details on funding,
Un petit French funding problème
Rumours of funding problems at French banks have been rife this summer.
Without even getting into specific financial firms, you can see a potential issues.
French banks do have a relatively higher reliance on wholesale funding,
Dear ESMA … about those Greek debt impairments
From Tuesday’s FT — some letter-writing:
Some European financial institutions should have taken bigger losses on their Greek government bond holdings in recent results announcements, according to the body that sets their accounting rules.
How to value a Greek bond like a CDO, part two
Ce contexte spécifique et la liquidité très faible du marché de la dette grecque a conduit le groupe Crédit Agricole S.A. à valoriser, au 30 juin 2011, ces instruments en « mark to model » et à les classer en niveau 3,
Why is Socgen offering 12-month gold for less than spot? Or is it a typo?
[ATTENTION - It is very possible the data in the Reuters chart could be wrong]
Something is afoot at the French banks.
At pixel time Societe Generale was trading 11.5 per cent lower:
BNP Paribas was off 7.5 per cent:
Snap news
Breaking pre-market news on Monday,
- FTSE 100 seen down 84 points – IG Index.
- Rio Tinto and Mitsubishi launch $1.5bn buyout offer for Coal & Allied — statement.
- Bid target Evolution Group acquires BNP Paribas Private Investment Management — statement.
There are many ways to impair a Greek bond
Many ways to fudge them too.
Compare and contrast…
1) Marking Greek bond impairments to market:
Examples du jour: RBS and Allianz.
RBS has written down £733m of its £1.4bn holdings of Greek bond holdings.
Greek provisioning, SocGen style
Within Société Générale’s generally terrible Q2 results…
Can anyone explain why the bank continued to use market valuations for its Greek bond impairment (€395m before tax), whereas BNP Paribas has been marking to model?
It’s the same basic asset,
SocGen gives up on net income
The half-year reporting season for the UK banking sector may have started well, with results from HSBC, Barclays and Standard Chartered all exceeding expectations, but a different story is emerging on the continent.
How to value a Greek bond like a CDO
There are two fun things about BNP Paribas’ €534m Greek bond impairment (sat right at the top of its second-quarter results press release…)
First, less than half of the bank’s total gross Greek bond exposure is subject to the impairment provision because of the debt not being eligible for the IIF bond offer,
Top of the Greek bond exposure pops [updated]
Emphasis on the popping. Worth listening to this as you scroll down the below table, compiled by a clearly nostalgic Laurent Fransolet of Barclays Capital…
None of the exposure is surprising,
French exposure to Greece, an Argentine deja vu
The Economist, Buenos Aires, 2002:
[Spanish] banks will be the hardest hit. Through the subsidiaries of BBVA and SCH—they own respectively Banco Frances and Banco Rio, Argentina’s second- and third-largest banks—the Spanish banks control a fifth of Argentina’s banking system.
Snap news
Breaking pre-market news on Wednesday,
- Glencore sets price range for flotation; price range of between $48bn and $58bn — statement.
- Next says recent warm weather and Royal Wedding bank holiday boosted sales;
Snap news
Breaking pre-market news on Thursday,
- BNP Paribas reports Q4 results; takes €534m hit on value of stake in Axa — statement.
- Nestle says emerging markets demand helped offset rising raw material prices — statement.