by Rachael Granby and the Market Currents team
Lloyds, RBS may take ECB loans. Lloyds (NYSE:LYG) and RBS (NYSE:RBS) may tap the ECB's three-year low-interest loan facility this week, with both banks saying the 1% interest rate makes the LTRO attractive. Sources say RBS will likely take around £5B while Lloyds will likely tap ~£10B. In London trading, RBS -2.35%, Lloyds -2.25%. (7:00 ET).
HSBC profit jumps. HSBC's (HBC) annual profit reached £13.8B, up 15% in a year of "major progress." Its commercial banking unit had a record year with pretax profit +31% to nearly £5B. The faster-growing markets of Asia, Latin America, the Middle East and North Africa now account for 49% of group revenue. It declared a 2011 dividend of $0.41, up 14%. In London, shares -2.6% (7:00 ET).
Discussion, not action, from G-20. G-20 officials met this weekend, accomplishing little other than discussing some of the global economy's ills. Among the issues raised were the potential of rising oil prices to hurt a global recovery and the need to change the part of the Volcker Rule which bans prop trading of foreign sovereign debt. Ministers delayed consideration of new international support for Europe until the G-20's next gathering in April. (G-20 communique)
BP in settlement talks. BP (NYSE:BP) is reportedly considering a $14B settlement with plaintiffs over the Deepwater Horizon oil spill, and would finance the settlement using the remaining balance from its $20B claims fund. The talks, which are nearing completion, are separate from negotiations with the government. BP's court trial, which was scheduled to begin today, has been postponed until March 5 to give BP and the Plaintiffs' Steering Committee time to continue talks and perhaps reach a deal. Premarket: BP +2.5% (7:00 ET).
Special items spur Transocean loss. Transocean (NYSE:RIG) reported a wider Q4 net loss of $6.12B (-$18.62/share) on revenue of $2.42B. Analysts had expected profit of $0.24/share on revenue of $2.34B. However, the quarterly loss reflects special items which net to a loss of $18.80/share, including a $5.2B goodwill impairment and a $1B estimated loss contingency on the Gulf oil spill. Premarket: RIG +3% (7:00 ET).
Buffett lines up anonymous successor. Berkshire Hathaway (BRK.A, BRK.B) announced it had decided on an eventual successor for 81-year-old Warren Buffett, but refused to disclose his or her identity. Buffett, who has no plans to step down, expects a "seamless" transition, but it remains to be seen whether an anonymous heir apparent will suffice to appease shareholders' concerns about a post-Buffett Berkshire. Berkshire also reported earnings over the weekend, disclosing Q4 net profit fell 30% to $3.05B, or $1,846/share, on smaller gains from the company's derivatives portfolio. Berkshire's cash hoard rose to $37.3B on Dec. 31 from $34.8B at the end of Q3. Book value rose to $164.9B from $160B in Q3. (Buffett's annual shareholder letter)
Roche extends Illumina bid. Roche (OTCQX:RHHBY) extended its $44.50/share offer for Illumina (NASDAQ:ILMN) until March 23. Illumina, which previously rejected the bid, responded the extension was expected given the low number of shares that have been tendered, a fact which reflects the degree to which Roche's bid undervalues the company.
World Bank: China must reform. China will probably have a soft landing in the near future, said World Bank President Robert Zoellick in introducing "China 2030." The report, released today and written by the World Bank and a Chinese think tank, stresses that sustainable economic expansion for China will require redefining the government's role, scaling back state-owned enterprises and gradually allowing market-set interest rates.
Blackstone bets on natgas. Blackstone (NYSE:BX) is expected to announce today a $2B investment in Cheniere Energy Partners (NYSEMKT:CQP) that will allow the company to build a gas-liquefaction plant in Sabine Pass, La., the first of its kind in the continental U.S.
China snubs foreign carmakers. Chinese automakers surged this morning after the government excluded foreign brands from a preliminary list of vehicles approved for purchase by state agencies. The move will help local brands gain in the 80B yuan ($12.7B) market at the expense of foreign automakers like GM (NYSE:GM) and Toyota (NYSE:TM). In the past, overseas brands accounted for 80% of the official pool.
FDIC shuts two banks. On Friday, FDIC regulators shut down Central Bank of Georgia in Ellaville, Georgia and Home Savings of America, in Little Falls, Minnesota, marking the 10th and 11th bank failures of the year. The two failures will cost the FDIC's deposit insurance fund an estimated $106.3M.
In Asia, Japan -0.1% to 9634. Hong Kong -0.9% to 21218. China +0.3% to 2447. India -2.7% to 17446.
In Europe, at midday, London -0.8%. Paris -1.2%. Frankfurt -1.2%.
Futures at 7:00: Dow -0.4%. S&P -0.5%. Nasdaq -0.4%. Crude -1.1% to $108.55. Gold -0.4% to $1769.
Monday's economic calendar:
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Outlook
Those that missed forecasts include UniSource Energy (NYSE:UNS).
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Discussion of today's news is here.