Global Banks Avoid Subprime, But Still Hurt - Housing Tracker

Global Subprime Fallout

Singapore Bank Earnings Slow; U.S. Clouds Outlook. “Two of Southeast Asia's biggest banks, DBS Group and OCBC, posted lower quarterly earnings on Wednesday as losses from global market turmoil outweighed double-digit loan growth. Asia's biggest banks have largely escaped the worst of the subprime-related losses that have hit global peers such as UBS AG , but earnings may suffer in the second half when a looming U.S. recession slows Asia's robust economies… DBS, Singapore's top lender posted a smaller-than-expected 2% drop in quarterly profit, hurt by credit-related writedowns, while third-ranked Oversea-Chinese Banking Corp's profit fell 4% as investment losses slashed contributions from its insurance arm.” (Guardian UK, May 7th)

Commerzbank First-Quarter Net Falls 54% on Writedowns. “Commerzbank AG, Germany's second- largest bank by assets, said first-quarter profit declined 54% as the collapse of the U.S. subprime market led to writedowns and lower trading income. Net income declined to €280 million ($434M) from €609M a year earlier. That matched the €282M median estimate of 13 analysts surveyed. Commerzbank wrote down the value of investments including subprime-related securities by €244M, bringing total losses from the credit crunch to €827M.” (Bloomberg, May 7th)

Swiss Re First-Quarter Profit Falls on Writedown. “Swiss Reinsurance Co., the world's biggest reinsurer, said profit fell a more-than-estimated 53% after a decline in premiums and 819 million Swiss francs ($778M) of credit market writedowns. Swiss Re dropped as much as 6.2% in Zurich trading, the most in more than three months, after the company said it would book a further 200M francs of writedowns because of “the difficult market environment.'' First-quarter net income declined to 624M francs, or 1.84 francs/share, falling short of the 870M franc estimate of nine analysts surveyed.” (Bloomberg, May 6th)

UBS To Cut 5,500 Jobs, Has Blackrock Debt Deal. “UBS AG will cut 5,500 jobs or almost 7% of its workforce as Europe's biggest subprime casualty reverses a rapid expansion into investment banking.” The bank also said it has a preliminary deal with U.S. asset manager BlackRock Inc (BLK) to sell a $15 billion portfolio of subprime mortgages, a clear signal the market for ailing U.S. real-estate assets is becoming more liquid.” (Reuters India, May 6th)

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