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’The not so great European banking recap
Are you confused by the ‘facts’ and figures on the latest bank stress test?
These charts (click to expand) from Morgan Stanley’s Huw Van Steenis should help.
Using reported 2011 core Tier 1 capital,
You’re all wrong (on RBS)
A headline like that can only mean one thing — another rant from Europe’s Dick Bove.
In Friday’s note, Evolution’s Ian Gordon slams regulators, the press and his peers for their stupid coverage of his beloved RBS.
Taking the stress test to nine (ex-bad stuff)
Just like the good old days. A Pestowire ‘exclusive’ on banking recapitalisations.
From the BBC:
The European Banking Authority is proposing that eurozone banks should hold capital equivalent to between 9% and 10% of their risk-weighted assets,
Taking the stress test to seven
(Reuters) European Union banking regulator EBA has demanded that lenders achieve a core tier one ratio of at least seven per cent in the current round of internal stress tests, banking and regulatory sources told Reuters on Tuesday.
Britain’s Dick Bove
Ian Gordon is fast becoming the UK’s answer to Dick ‘I ♥ banks’ Bove.
Last week, the Evolution Securities analyst and bank apologist rodeto the rescue of RBS, dismissing reports that the state-controlled lender might need another injection of capital.
The cost of an RBS bailout
A trip down memory lane.
It’s December 2009. Details of a scheme to insure £280bn of RBS’s most toxic loans have finally been announced after months of discussion.
The chairman of RBS writes to shareholders trying to explain why the bank is joining the scheme and is being forced to raise an additional £25.5bn of capital via an issue of B shares to HM Treasury.
Bailing out RBS
A predictably furious response from RBS to the FT’s front page splash on Friday.
Via Reuters:
“The design of any new application of the EU stress tests is completely up in the air. Any analysis of how any bank will be affected is nothing more than speculation,”
Snap news
Breaking pre-market news on Friday,
- RBS says it is among the strongest capitalised banks in Europe — report.
- Moody’s downgrades 12 UK financial institutions; two notch cut for RBS — statement.
A genuinely stressful stress test
Wouldn’t it be nice if bank stress tests were, well, stressful?
Too often they look like they’re done by him:
When they should be done by her:
Fortunately Arbuthnot’s Mr. Banks, James Ferguson,
Markets Live – Retail Special
It’s a busy week for the UK retail sector, what with Next, John Lewis, Kingfisher and Kesa Electricals reporting results and the Office of National Statistics releasing its sales survey for August.
So FT Alphaville needs some expert help to tell us what it all means.
No clean exit from RBS
Attention George Osbourne.
The UK taxpayer will not get out of RBS clean. There will be no early return to recent share price highs and the bank will not meet its return on equity targets (15 per cent by 2013!),
Fannie and Freddie’s revenge — the details [updated]
– By John McDermott and Cardiff Garcia
The details of the US government’s attempted bank raid are coming in on Friday afternoon.
The Federal Housing Finance Agency has filed 17 lawsuits against banks operating in the US.
Celebrity knife catching with Lord Sugar
In the next episode Donald Trump backs up the truck and buys BofA.
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.
A touch of anglo-periphery contagion
Adding to the sharp moves in Italian and Spanish banking stocks on Monday were also some rather sharpish slides in the UK banking sector — just ahead of the close of trade.
Not forgetting the Great British Krona versus the dollar…
Eurozone at breakpoint
We have been waiting for this – the RBS report on eurozone debt crisis, policy options and end game scenarios.
And it doesn’t disappoint.
The RBS team, lead by chief economist Jacques Cailloux, reckons the Euro area is at ‘breakpoint’,
What lurks beneath Italian banks…
… a swirling, shifting sea of over-the-counter trading.
On Monday, Zero Hedge pointed to recent trade data from Goldman’s dark pool platform — SigmaX — which appeared to show a pronounced fascination with Italy recently.
Clegg’s great UK banking give away
Our instinctive reaction to deputy prime minister Nick Clegg’s brainwave to give every British voter shares in the state-owned banks Lloyds Banking Group and RBS is that it’s an ill-thought out populist move that would be a logistical nightmare to execute.
RBS sells RBS
RBS is the biggest faller in London on Monday.
The reason for the decline (apart from generalised Greek fear) is this — an RBS placing circular:
RBS is acting as a sole bookrunner on the below transaction:
Basel and a widowed Lloyds balance sheet
Funny coincidences, Lloyds Banking Group edition.
Last night Bloomberg reported that Lloyds has ruled out a sale of its insurance arm Scottish Widows. A sale had been seen bullish for the bank, by disciplining its vast post-crisis balance sheet a bit more and allowing return on equity to drift into the high teens.
Compare and contrast, RBS and Lloyds
Where Lloyds goes, RBS follows.
Not in terms of a socking great provision for PPI mis-selling (RBS says it can’t estimate the cost, but reckons it could be significant) but those increased Irish impairment charges.
The Irish pain of RBS, charted
Ulster Bank Group accounts for 10% of the Group’s total gross customer loans or 9% of the Group’s Core gross customer loans. The impairment charge of £1,294 million for Q1 2011 was £135 million higher than the £1,159 million impairment charge for Q4 2010.
Snap news
Breaking pre-market news on Friday,
- RBS announces first quarter loss as Ulster Bank takes a £461m hit– statement.
- International Airlines Group says rising fuels costs, Japan earthquake and unrest in North Africa will hit profits — statement.
Tightening: not when, but how fast
In a previous post we looked at how the futures markets were pricing in the eventual beginning of Fed tightening.
Yeah, we know — it’s way too premature to be discussing this.
But stick around, because recently we came across an interesting paper by RBS that says the when matters a lot less than the how of tightening — referring specifically to the speed.