Remember the frustrating old days when a cloud of uncertainty hanging over bank balance sheets was due to illiquid structured products and mortgage security holdings? When one was left to look out the window and wonder just how much of a payout would a bank ultimately get on its credit default swap protection on super-senior CDO tranches from ailing monolines? Sigh. Read more
The research department at Investec offer a notably clear illustration of any given analyst’s recommendation record on any particular stock.
Let’s look at Ian Gordon’s record on Lloyds and RBS. Click to enlarge each image. Read more
He spent roughly his whole career at Barclays, joining in 1983 and working his way up to be first chief executive of Personal Financial Services at the bank and then head of Business Banking. He lost out to Bob Diamond in the race to be group ceo when the previous incumbent, John Varley, opted for early retirement. Read more
“The other effect of the euro-area crisis has been to create a large black cloud of uncertainty hanging over not only the euro area but our economy too, and indeed the world economy as a whole.”
Here’s the speech. Read more
Breaking pre-market news on Friday,
- Lloyds Banking Group warns of tough times after £3.5bn loss – statement. Read more
The chief executive of Lloyds Banking Group is set to unveil plans to simplify the bank’s management structure and hand more power to top executives, the FT says, citing people familiar with his plans. António Horta-Osório recently returned from a two-month period of medical leave promising to reduce the day-to-day responsibilities he took on when he became chief executive in March 2011. He is expected to cut the number of executives that report directly to him from 14 to about 10, while also relinquishing control of some management activities to a small subset of his closest lieutenants. The changes were seen as attempts to convince investors he can avoid a relapse of the exhaustion he suffered last year. Read more
January is on track to be one of the busiest in more than a decade for global covered bond sales by banks, as lenders race to secure funding after the eurozone sovereign debt crisis led to a dearth of issuance, the FT reports. The first three weeks of the year have seen a flurry of covered bond issuance, a type of over-collateralised debt that is considered very safe by investors, from northern European banks such as Aereal Bank, Lloyds Banking Group and UBS, as well as Australian lenders. So far this year $43bn has been raised by global banks using covered bonds, the second strongest start to the year since 2000, according to Dealogic. Significantly it is the first time that European banks have issued more covered bonds than senior unsecured debt, traditionally seen as the bedrock of bank funding but which in the second half of last year saw issuance in Europe slow to a crawl. Read more
UK banks are rapidly withdrawing from far-flung overseas businesses and other divisions considered superfluous to their strategies, says the FT. Lloyds Banking Group has appointed Rothschild to help sell its Middle East operations as part of its previously stated intention to rein in its lossmaking international division. Lloyds has only one branch in the United Arab Emirates – in Dubai – but manages about £1bn ($1.5bn) of assets across the region, including a slice of the expat community and local retail and commercial customers. RBS, meanwhile, is hoping to step up its withdrawal from non-core businesses with the long-awaited sale of its aircraft leasing business for $7bn to $8bn. China Development Bank and Sumitomo Mitsui Financial Group are the leading bidders although Wells Fargo is also still in the running.
He’s back after two months R&R, which included a week at The Priory. Here’s Lloyds chief executive Antonio Horta-Osorio returning to work at the bank’s Gresham St HQ on Monday…
Ebenezer Draghi sighed. These bank books would never come out right, and it was Christmas Eve already. As he struggled, the numbers began to swim before his eyes. So many hundreds of billions of euros, so many classes of security, collateral, refinancings… He started to doze. He found himself back a decade, in that glad, confident morning when the world was fresh and new, and the first currency to be entirely illustrated by pictures of fantasy bridges was sprung on a delighted world.
How wonderful life was then! Those perfidious Brits had, predictably, declined to join the euro, but we’d show ‘em! The single currency would be the cement that held Europe together, financially as well as symbolically, and would soon threaten the greenback as the world’s premier medium of exchange. Knocking the Yanks off their perch while leaving Britain in the slow lane. What’s not to like? Within a decade the economies of north and south would have converged into one magnificent powerhouse. The euro would have become a deutschemark with a suntan. Read more
António Horta-Osório, chief executive of Lloyds Banking Group, is to return to his job on January 9, ending six weeks of uncertainty about the bank’s leadership, reports the FT. But Sir Win Bischoff, Lloyds’ chairman, insisted he would not go easy on the Portuguese banker, who has been absent since November 2 with a stress-induced “condition affecting sleep and energy levels”, and dismissed the idea of bringing in a chief operating officer as a back-up. “There can be some greater sharing of the load but we are not going to mollycoddle him,” Sir Win said. “If you can’t take the heat, get out of the kitchen. But I believe Antonio can stand the heat. I expect CEOs occasionally to be tired.” Read more
Lloyds Banking Group’s chief executive António Horta-Osório is having to reapply for his own job as doctors prepare to give him the go-ahead to return to work from sick leave, the FT reports, citing two people close to the situation. The sources said the chief executive was going through such a thorough vetting process that he was in effect having to reapply for his own job. “Investors are sceptical about his ability to return,” said one. “To go with António would be a pretty brave decision.” Read more
Ring my friend, I said you call Doctor Robert
Day or night he’ll be there any time at all, Doctor Robert
Doctor Robert, you’re a new and better man,
He helps you to understand
He does everything he can, Doctor Robert
There’s a quite extraordinary (and seemingly well informed) post running on Robert Peston’s blog on Thursday afternoon in which Lloyds’ plan to deal with the health issues of Antonio Horta-Osorio, the bank’s chief executive, is discussed in some detail. Read more
Jed Rakoff is quite the hero. A New York District judge, he has done what the rest of us would love to do, and busted a cosy deal between bankers and their regulators. In early 2007, just when everything was starting to slide, the caring, sharing boys at Citigroup assembled a $1bn fund of, ahem, less-than-prime mortgage-backed securities. As Judge Rakoff explained.
That allowed [the bank] to dump some dubious assets on misinformed investors. This was accomplished by Citigroup’s misrepresenting that the fund’s assets were attractive investments rigorously selected by an independent investment adviser, whereas in fact Citigroup had arranged to include in the portfolio a substantial percentage of negative projected assets and had then taken a short position in those very assets it had helped select. Read more
Lenders to Battersea Power Station have moved to take control of the building, drawing an end to months of speculation about the latest plans for the derelict London landmark, the FT reports, citing people familiar with the situation. Lloyds and Ireland’s National Asset Management Agency will on Thursday notify Battersea Power Station Shareholder Vehicle (BPSSV), the holding company behind the Grade II listed building, that they intend take the site into receivership. Real Estate Opportunities, the majority owner of BPSSV, has been seeking a partner to help develop the site, which it bought for £400m five years ago. Recent rumours have included takeover bids from Roman Abramovich’s Chelsea Football Club and a £262m offer from Malaysian property developer SP Setia to take over the senior debt. However, Lloyds and Nama, the Irish bad bank, which hold almost equal shares of a total £325m of debt on the site, are understood to have tired with REO’s failure to find a buyer, and plan to run an open-market auction process to try and offload the development. Read more
Lloyds Banking Group is exploring ways to reduce the workload on António Horta-Osório, its chief executive, as it attempts to convince investors he will be able to make a successful comeback from a period of medical leave, says the FT, citing people familiar with the bank’s thinking. The state-backed bank is considering options including appointing a chief operating officer to act as an effective deputy and handing more responsibility to a small group of other senior executives. Mr Horta-Osório has been absent since November 2, when he announced he would be taking up to eight weeks off to recover from exhaustion. Lloyds says he is recuperating well and is on track to return as planned before the end of the year. Read more
Lloyds has sold £1bn of distressed property loans in Australia and New Zealand to Goldman Sachs and Morgan Stanley, the FT reports, taking the UK bank a step closer to unwinding the £24bn of distressed property loans on its books. Goldman, which is working in partnership with asset manager Brookfield, will take control of Lloyds £600m portfolio of loans in New Zealand. Morgan Stanley has bought 15 loans on offices, shops and up-market apartments spread along Australia’s Gold Coast, worth about £430m. Lloyds declined to discuss the price of the two deals, but said it was delighted to conclude the sale. Read more
It’s all going wrong at
The Headless Horse Lloyds Banking Group.
Very wrong. Read more
Is the sale of Northern Rock to the Grinning Pullover a deal for UK taxpayers?
Chancellor George Osborne says it is: Read more
Due to unforeseen technical errors — actually it was the over zealous FT spam filter — Neil’s column did not appear at its usual time on Friday. But it’s too good to waste so we are publishing now.
Sorry for the confusion Read more
So, the Headless Horse is thinking about ripping its revenue forecasts.
From the Lloyds Banking Group Q3 trading update. Read more
Breaking pre-market news on Tuesday,
- Olympus admits to covering up losses since 90′s — statement and statement. Read more
Its CEO is exhausted and has been packed off to the sanatorium, the interim boss has his mind on other things, a large disposal plan is proving difficult to execute, there’s £30bn of debt that needs to be rolled over and the outlook for the UK economy remains dire.
Time to buy Lloyds Banking Group, then. Read more
State owned rival RBS has wasted no time in sticking the boot into Lloyds Banking Group.
Here’s the take of its banking team on António Horta-Osório’s leave of absence. Read more
António Horta-Osório, the chief executive of Lloyds Banking Group who joined the part-nationalised lender at the beginning of the year, is poised to step back temporarily from his role as chief executive due to health reasons, the FT reports. Mr Horta-Osório, who joined the bank with much fanfare from Spain’s Santander, has been ordered by his doctors to take a break from his post on grounds of stress. Lloyds, which is part-owned by the UK government, said on Wednesday that he was expected to return “before the end of the year”. The bank’s board is to meet later on Wednesday to agree on interim arrangements. Tim Tookey, finance director, resigned over the summer, and is due to leave the bank in the coming months. However, the board is expected to ask Mr Tookey to assume the role of acting chief executive, partly in the absence of any credible alternative. Mr Horta-Osório conducted a clear-out of senior executives shortly after his arrival, with no replacement for Mr Tookey yet identified, and his one big hire from outside – Nathan Bostock from Royal Bank of Scotland – is yet to arrive. Read more
The price action in Lloyds Banking Group on Wednesday morning:
António Horta-Osório, the chief executive of Lloyds Banking Group who joined the part-nationalised lender at the beginning of the year, is poised to step back from his role as chief executive due to health reasons, the FT says, citing senior executives. It will be revealed at a board meeting on Wednesday that Mr Horta-Osório, who joined the bank with much fanfare from Spain’s Santander, has been ordered by his doctors to drop the role on grounds of stress. The time span of the medical leave is unclear, but it is likely to be at least six months, the senior executives said. However, one person close to the situation said Mr Horta-Osório hoped to be back at work by the end of the year. The news pitches the leadership of Lloyds into chaos. Tim Tookey, finance director, resigned over the summer, and is due to leave the bank in the coming months, but the board is expected to ask Mr Tookey to assume the role of acting chief executive, partly in the absence of any credible alternative. Read more
Breaking pre-market news on Tuesday,
- UBS Q3 net profit solid at CHF980m despite trading scandal – statement. Read more
From stress test to recession.
Merrill Lynch has on Tuesday made some savage revisions to its forecasts for UK banks to reflect a more bearish economic outlook. Read more
Banks and insurers have hit back at the UK regulator’s moves to block a new form of funding transaction between banks and insurers, the FT reports. The British Bankers’ Association criticised the approach of the Financial Services Authority to the deals as “completely inappropriate”. Phoenix Group and Lloyds Banking Group have each had transactions blocked, the FT says, citing people in the market. They are among about half a dozen deals that have been held up while the FSA considered these so-called liquidity swaps and launched a consultation on specific guidance for them. Liquidity swaps are designed to help hard-pressed lenders improve their funding base and the quality of assets on their balance sheets as they look to wean themselves off the liquidity support created by central banks during the crisis. Read more