Sep. 5, 2014, 3:41 AM
- U.S. Federal Judge Denise Cote has ruled that investors may press claims against 12 major banks for violating antitrust law by limiting competition and fixing prices in the $21T CDS market, even though improved liquidity should have driven costs down.
- The defendants include BofA (NYSE:BAC), Barclays (NYSE:BCS), BNP Paribas (OTC:BNPZY), Citigroup (NYSE:C), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), Goldman Sachs (NYSE:GS), HSBC (NYSE:HSBC), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), RBS (NYSE:RBS) and UBS (NYSE:UBS).
Aug. 28, 2014, 2:54 PM
- The FHFA launched 18 lawsuits in 2011 against banks over about $200B in MBS. Many have settled - the latest being Goldman Sachs last week - but HSBC, Nomura (NYSE:NMR), and RBS (which is a defendant in the Nomura case) are among a group which hasn't.
- The ruling from federal Judge Denise Cote sets up a Sept. 29 trial start date for HSBC, and the bank has estimated $1.6B in possible exposure.
Aug. 27, 2014, 2:08 AM
- HSBC (NYSE:HSBC) declares that it will fight the $250M Keydata lawsuit that alleges it aided a major international fraud.
- Thousands of U.K. investors lost their money when Keydata collapsed in 2009. The company invested many of its funds in bonds that were issued by Luxembourg-domiciled SLS Capital, which was later liquidated.
- HSBC is accused of doing little to correct the misleading marketing material that displayed the bank as the bonds’ trustee, and that it did not properly investigate claims that Keydata was an alleged Ponzi scheme.
- HSBC -3.7% AH
Aug. 18, 2014, 3:47 AM
- Eurozone banks are expected to borrow about €250B in cheap four-year money from the European Central Bank in September and December under the ECB’s "targeted long-term financing operations".
- The new loans would come on top of the more than €1T in cheap finance the ECB pumped into the financial system between late 2011 and 2012 to avert a financial crisis.
- The new funds are expected to boost lending to the region’s credit-starved businesses.
- Europe’s economic outlook has not been pretty. Last week, figures outlined a slowdown in Germany and France and Italy in recession.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
Aug. 12, 2014, 11:59 AM
- Brazil's money laundering probe linked to state-run Petrobras (PBR -1.2%) is spreading to financial institutions as prosecutors investigate whether they met compliance requirements.
- Court documents cite units of banks including Citigroup (NYSE:C), Banco Santander (NYSE:SAN) and HSBC, as well as Brazil-based Itau Unibanco (NYSE:ITUB) and Banco Bradesco (NYSE:BBD) as holding accounts or executing operations linked to the alleged laundering of 10B reais.
- The refining division at Petrobras already is under investigation for runaway spending including alleged inflated contracts to suppliers, and is cited as one of the possible sources of cash being laundered in the case dubbed “Car Wash” by police.
Aug. 5, 2014, 7:18 AM
- Moody's view of the sector is downgraded to "negative" from "stable," suggesting ratings cuts could be in the offing. At issue are new rules designed to prevent the use of taxpayer funds to rescue struggling operators.
- Also of note, says Moody's analyst Carlos Suarez Duarte, is continued exposure to both conduct and litigation charges."
- Those with negative outlooks include: LYG, BCS, RBS, HSBC.
Aug. 4, 2014, 7:50 AM
- Pretax earnings of $12.3B fell 12% from a year ago and came in shy of analyst estimates of $12.9B. Revenue of $31.2B fell 9.3%.
- Underlying operating expenses of $18.2B gained 2%, bringing costs as a proportion of revenue of 58.6% from 53.5%, higher than the bank's mid-50s target.
- The global banking and markets unit saw revenue of $5.03B, off 12%, "respectable in a broader industry context," says Investec's Ian Gordon.
- Expecting improvement in revenue in 2015," CEO Stuart Gulliver says gains should be lagged six months after rates begin to turn up.
- HSBC +2.2% premarket
- Press release
Aug. 3, 2014, 10:28 AM
- Wall Street firms led by Goldman Sachs (NYSE:GS) are closing in on a deal to purchase a stake in chat and instant messaging start-up Perzo as an alternative to Bloomberg's similar application, Reuters reports.
- Bloomberg has dominated Wall Street for years, but banks have been looking for a substitute as sluggish trading volumes and higher regulations weigh on revenues. Bloomberg's trading and news terminal costs about $20,000 a year, while Perzo's applications are open-source and free. Bloomberg customers must also buy an entire terminal, and cannot just buy the messaging system and adapt it.
- Several other banks and asset managers have received term sheets for the Perzo deal and have recently signed non-disclosure agreements including Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Deutsche Bank (NYSE:DB), HSBC (NYSE:HSBC), and BlackRock (NYSE:BLK).
- Goldman has been looking at alternatives to Bloomberg's messaging program for years, and launched a project internally called "Babel" in early 2013 to develop a competitor.
Jul. 25, 2014, 8:03 AM
Jul. 17, 2014, 4:54 AM
- Prior to its takeover of European bank supervision on November 4, the ECB will release collections of data on the euro zone's 128 most important lenders to insure the banks can withstand future crises.
- The published review in the second half of October will outline leverage measures, standardized ratios of non-performing loans and other statistics, giving the banks only two weeks to come up with plans to deal with capital shortfalls.
- Related stocks: SAN, DB, IRE, CS, ING, BBVA, BCS, RBS, HSBC, LYG
- ETFs: EUFN
Jul. 10, 2014, 9:44 AM
- When the going gets tough, the tough suspend trading. Portugal has halted trade in Banco Espirito Santo with the stock off 17.2% on the session and 54% over the last month. At issue are financial troubles for the bank's privately-owned holding company, Espirito Santo International. Its accounts are currently under review by an external auditor who has identified irregularities and concluded the company "is in serious financial condition."
- Santander (SAN -5.8%), UBS (UBS -1.8%), Deutsche Bank (DB -3.1%), Bank of Ireland (IRE -5.6%), Credit Suisse (CS -2.8%), ING (ING -3.2%), BBVA (BBVA -3.1%). U.K. banks: Barclays (BCS -3.8%), RBS (RBS -1.9%), HSBC (HSBC -1.9%), Lloyds (LYG -2%).
- European financial sector ETF: EUFN -2.4%.
Jun. 24, 2014, 11:26 AM
- Citigroup (C), HSBC North America, RBS Citizens, and Santander Holdings U.S.A. (SAN) were originally required to re-submit capital plans by the end of business on Thursday, but - following requests from the banks - the Fed is giving them until January 5 of next year, the due date for the next round of annual plans for all of the lenders under the CCAR umbrella.
- Previously: Passing next stress test is job #1 at Citi
Jun. 24, 2014, 8:02 AM
- HSBC's private bank will now service customers in about 70 countries down from roughly 150, with most of the reduction coming from the sale of $12.5B of its Swiss private banking assets to Liechtenstein's biggest bank, LGT Group Foundation.
- The sold assets amount to about 3% of the bank's private banking assets and were held by clients in dozens of countries HSBC no longer deems strategically important.
- Wealth management can be lucrative, but a recent clampdown on tax evasion and tougher compliance rules have maybe made it less so. Barclays last year pulled out of 130 countries and Credit Suisse from about 50.
Jun. 24, 2014, 5:43 AM
- Iran is lobbying to get HSBC to process its humanitarian trade transactions, which the bank froze due to the scope of international sanctions.
- Although the country did obtain some sanction relief last November after agreeing to downsize its nuclear program, banks are growing increasingly worried over stepping out of line.
- The move follows a potential $9B fine imposed on BNP Paribas, which is being investigated for avoiding sanctions between 2002 and 2009.
- Sanctions on the Islamic Republic never included food or humanitarian goods, although the EU and U.S. have made payment, shipping and transactions harder to process in the last two years.
Jun. 18, 2014, 5:02 PM
- The trustee units of Detusche Bank (DB), U.S. Bancorp (USB), Wells Fargo (WFC), HSBC, and Bank of New York Mellon (BK) face a lawsuit by an investor group led by BlackRock (BLK) and Pimco (and also including PRU and SCHW) over their role in overseeing and enforcing terms on more than 2K mortgage-backed bonds between 2004 and 2008.
- The group is seeking damages for losses on the paper that have surpassed $250B, reports the WSJ. At issue, say the plaintiffs, is the banks breaching their duty to bondholders by failing to force the lenders and bond issuers to repurchase poorly underwritten loans.
- A similar plaintiffs group has already won settlements from Bank of America and JPMorgan for their roles in originating and selling toxic mortgages.
Jun. 12, 2014, 7:51 AM
- In the next several weeks, the Supreme Court is expected to rule on a case involving a shareholders' class action lawsuit against Haliburton (HAL). If it rules in favor of the company, it will set a higher bar for plaintiffs to achieve class certification. Currently, a judge holds a certification hearing to decide whether class status is appropriate. One criterion is that the people must have common issues. If HAL prevails, then the defendants will be able to file a brief with the court demanding that the shareholders have to again seek court approval for class status under a new, tougher standard. If they fail the gain the approval, the case ends.
- HAL is trying to overturn a 1988 decision, Basic v. Levinson, which is based on "fraud on the market theory," which postulates that a defendant's material misrepresentation that affects the price of publicly traded securities is assumed to have been relied upon by a buyer who suffered a loss. In HAL's case, shareholders alleged that it understated its asbestos liabilities while overstating revenues and the benefits of its merger with Dresser Industries.
- Other firms facing class action suits that would benefit from a favorable ruling are Pfizer (PFE), Merck (MRK), HSBC Holdings Plc (HSBC), Regions Financial (RF) and Las Vegas Sands (LVS).
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