The Banking and Strategy Initiative

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Advantage Dealbook: This week's investment banking buzz and inspiration

Goldman Sachs promotes this year’s Flock

Goldman Sachs declared its new Managing Directors this year though with lesser fanfare and the number were just more than 200 instead ofthe 300+ last year. The bank has on board 450 Partner Managing Directors

A Minister for Italy

Corrado Passaro, the newly appointed Minister for Productive affairs (Economic Development ) and Transport and Infrastructure, has ben there done that having done his MBA from that little light in the hut in Pennsylvania , and started at Mckinsey. He has earlier completed a restructuring for Posta Italia (check wikipedia) and in 2006 consummated Intesa with Sao Paolo BMI and redid all products of the bank to create the behemoth of Banco Intesa Saopaolo in 2006. Rather a personality to complement the ex Goldman Sachs PM and Minister of Finance, Mario Monti. Another Mario, Corradio’s deputy got his job overnight

Lloyd’s loses Antonia Horta Osario?

UBS’s plans for reworking their return of equity became more urgent sometime two weeks ago when the paper trail raised new questions on its Delta one trading staff while Lloyds new CEO Antonia Horta Osario (formerly CEO of Santander) went away on an extended leave of absence. The interim CEO Tim Tookey is himself set to leave early next year.

UBS – no more beating around the bush

After an extended reworking of Bonus pools at deferred comp to bonus pools at Credit Suisse, deferrals in CS stock were reserved for senior employees. UBS had also reserved a largish bonus pool of $1.6 bln despite Kweke Aduboli’s $2.3 bln losses reported and has decided that there will likely be a lump sum cut in bonus pools at the end of the year saving nearly $500,000 from the $5 bln sized pool right now

Last week it announced 400 job cuts in the Investment Banking division after holding nearly 50 people responsible for the Delta One fiasco. It also published reworked targets on Saturday(BW) with Sergio Ermotti firmly in the driving seat

UBS will aim for a return on equity of between 12 percent and 17 percent starting in 2013 and plans a dividend of 10 centimes a share for this year, the Zurich-based bank said yesterday as top executives spoke to investors in New York.

Now 3900 job cuts will take 2400 heads from investment banking till 2016. The other Swiss with similar job cuts is busy deleveraging after investment banking losses in its latest quarter hurt. UBS has suffered close to $65 bln in the three years of the crisis in its investment banking unit

Virgin and Northern Rock’s 25% Capital Adequacy

Virgin in the meantime surreptiitiously laid out its pre – crisis style leveraged plans for purchasing Northern Rockcand combining operations with Virgin Money. Apparently as Virgin is an NBFC and Northern Rock in government administration, Surplus capital at the combined entity can release GBP 400 mln ( GBP 250 mln from Northern Rock) for the GBP 750 mln purchase. US investor Wilbur Ross brings in another GBP 200 mln and other investors 50-80 mln pounds. The CAR ratio could well come down to below 15% but the plan has Trsry’s approval

Though the final consideration is  a little bit more, George Osborne thinks its the best deal he could get outbidding another Management buyout bid from Gary Hoffman and limiting the Trsry to a minimum of GBP 373 mln in losses. S&P has already put the bank on ratings watch with negative implications

(Telegraph)On top of a £747m up-front cash payment, Virgin Money agreed to pay a further £50m within six months. The group also agreed to buy £150m in Tier 1 capital notes from the Government that pay annual interest of 10.5pc. The taxpayer could also receive as much as £80m if the combined business is floated within five years.

MF Global haunts Goldman Sachs, JP Morgan

Two pension funds(BW) have sued the big investment banks on Friday asserting they were misinformed about MF Global’s exposure to European Sovereign debt while more than $900 mln was raised for MF Global folios. Merrill, BofA, Deutsche Bank and other securities were named along with Jefferies & Co and MF global staff as defendants

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