Oct. 24, 2014, 2:44 AM
- Thirty-one banks are set to participate in the Fed's 2015 stress tests, which will see how they can withstand pressures such as a spike in oil prices, a rise in the U.S. unemployment rate or an increase in risky corporate loans. The capital plans are due in January.
- Among the bank's that failed last year's tests are Citigroup (NYSE:C), and the U.S. units of HSBC (NYSE:HSBC), Santander (NYSE:SAN) and RBS (NYSE:RBS).
- Deutsche Bank (NYSE:DB) will participate for the first time, and has already felt pressure from the NY Fed, which has told it in a private letter that its regulatory reports were "low quality, inaccurate and unreliable".
- This Sunday, the ECB will release results for stress tests of 130 eurozone banks amid a deteriorating economic outlook for the region.
Oct. 21, 2014, 8:49 AM
- At issue are charges of rigging Swiss franc Libor benchmark interest rates, and JPMorgan (NYSE:JPM), UBS, and Credit Suisse (NYSE:CS) will be collectively fined more than $115M, reports Reuters. Not being penalized is RBS thanks to its role as a whistleblower in the case.
- JPMorgan is reportedly set to receive the biggest fine at about $89M.
Oct. 10, 2014, 5:22 AM
- The U.K.'s Financial Services Authority has accused six banks, including JPMorgan (NYSE:JPM) and UBS (NYSE:UBS), of system and control failures in their forex operations, the FT reports.
- The allegations are part of the FSA's investigation into the possible manipulation of currency markets, which is one of a number of probes by authorities around the world.
- Last month, the U.K. regulator started settlement talks with the two banks, as well as with Barclays (NYSE:BCS), Citigroup (NYSE:C), HSBC (NYSE:HSBC) and RBS (NYSE:RBS). The discussions could lead to fines of £1.5B in total.
- By focusing on an inability to stop staff from engaging in misconduct rather than on actual manipulation, the FSA could help the banks limit the impact of lawsuits that have been filed in the U.S. over forex rigging.
Oct. 8, 2014, 2:18 AM
- Eighteen of the world's largest banks, ranging from Credit Suisse (NYSE:CS) to Goldman Sachs (NYSE:GS), have agreed to give up the right to "close out" deals on derivatives contracts if a financial institution runs into trouble, FT reports.
- The International Swaps and Derivatives Association is due to announce the agreement to change its “protocols”, which govern the $700T market, in the next few days. They will take effect from January 1, 2015.
- Related stocks: HSBC, JPM, OTC:BNPZY, DB, BCS, BAC, SAN, C, RBS,
Sep. 30, 2014, 3:20 AM
- Royal Bank of Scotland (NYSE:RBS) says it will release £800M ($1.3B) from provisions it had put aside to cover losses on bad loans following an improvement in the economy, especially in Ireland.
- The bank expects losses from bad loans to be "significantly" lower than its previous guidance of £1B this year due to continued improvement in economic conditions and asset prices.
Sep. 29, 2014, 6:43 AM
- UBS (NYSE:UBS) has entered settlement talks over allegations it was involved in manipulating foreign exchange rates.
- Although the bank did not identify a regulator, Reuters was informed by sources on Friday that Britain's Financial Conduct Authority was talking to UBS and five other banks - Barclays (NYSE:BCS), HSBC (NYSE:HSBC), Royal Bank of Scotland (NYSE:RBS), JP Morgan (NYSE:JPM) and Citi (NYSE:C).
- A settlement could result in each bank being fined hundreds of millions of pounds, depending on the severity of the misconduct.
- As well as the FCA, authorities in the U.S., Switzerland and Hong Kong are investigating the $5.3T a day foreign exchange market.
Sep. 25, 2014, 6:59 AM
- Philip Hampton has been chairman of RBS since 2009, but he will step down at some point next year, and begin serving on the board at GlaxoSmithKline (NYSE:GSK) on January 1. He's expected to succeed Christopher Gent as Glaxo's chairman by September 2015.
- RBS notes Hampton's departure is in line with his longstanding intention of serving as bank chairman for 5-7 years. Nevertheless, the move comes as RBS shifts focus from being a global investment bank to a U.K. lender - the bank yesterday sold in an IPO 25% of its U.S. retail unit, Citizens Financial Group.
- Previously: Citizens Financial little-changed in opening trades
Sep. 24, 2014, 10:16 AM| 3 Comments
Sep. 23, 2014, 8:06 PM
- RBS had hoped to sell 140M shares of Citizens Financial (NYSE:CFG) for between $23 and $25 each, but chatter over the past few days suggesting investors were balking at that price proved correct.
- At a price of $21.50, the sale will raise $3B for RBS (prior to the greenshoe), well less than the $3.5B which would have been raised at the top end of the hoped-for range. While a setback, the more important issue will be the boost to RBS's capital ratio from cutting its stake in Citizens below 50% and removing the units assets from its balance sheet.
- Today's offering was for roughly 25% of Citizens.
- Previously: Largest bank IPO since Goldman prices today
Sep. 23, 2014, 9:41 AM
- Royal Bank of Scotland's (RBS +0.2%) IPO of Citizens Financial Group could raise as much as $3.5B when it prices after the close today. It would be the largest bank IPO in the U.S. since Goldman came public in 1999.
- The deal will free RBS of unneeded assets amid the new regulatory regime and allows Citizens to detach itself from its parent. "Citizens has some catching up to do compared to other U.S. regional banks,” says Morningstar's Dan Werner. At the high end of the expected offering range of $23-$25 per share, Citizens would be valued at just 1.07x tangible book vs. 1.91x for other U.S. banks with a market cap greater than $1B. The bank's ROE last year of 5% compares to 10.7% at PNC Financial and 13.4% at Fifth Third.
- Citizens will trade on the Big Board under the ticker symbol CFG. RBS is selling 140M shares or about 25% of the bank.
Sep. 19, 2014, 12:25 PM
- A check of European closing prices finds the euphoric early reaction to the "No" vote from Scotland mostly faded by day's end. The Stoxx 50 (NYSEARCA:FEZ) closed just 0.2% higher, with the U.K.'s FTSE 100 (NYSEARCA:EWU) gaining 0.3%.
- Looking at U.K. bank ADRs: RBS (RBS +1.2%), Barclays (BCS -0.9%), Lloyds (LYG +0.5%), HSBC (HSBC -0.2%).
- Dealing with its own separatist movement, Spain (NYSEARCA:EWP) managed just a 0.1% gain.
- Previously: Euro shares lean green on "No" vote
- Previously: Might Catalonia secession fears ebb following Scotland vote?
Sep. 19, 2014, 3:02 AM
- European equity futures (NYSEARCA:EWU) indicate positive opens following Scotland's "no" vote. Euro STOXX 50 futures is up 1%, while FTSE 100 futures indicates U.K. markets could open up 1.1%. Pound futures (NYSEARCA:FXB) are up about 0.5%.
- With 31 of 32 constituencies now final, unionists had won 55% of the vote and separatists had 45%.
- Shares of stocks exposed to Scotland like Royal Bank of Scotland (NYSE:RBS) and Lloyds (NYSE:LYG) indicate early gains of 2-3%.
Sep. 17, 2014, 3:52 PM
- Though most of the polls give the "No" (to breaking away from the U.K.) camp the lead, the pound (NYSEARCA:FXB) is behaving a bit nervously. It's now slightly lower on the session after being up nicely this morning following a larger-than-expected decline in unemployment.
- Independence would be "an economic trapdoor down which we go, from which me might never escape," says former U.K. PM Gordon Brown in the sort of fear-mongering comment becoming fairly typical from politicians who support the status quo.
- “Secession would be a catastrophe for Scotland,” says Spanish foreign minister Garcia-Margallo. “It would start a process of Balkanization that nobody in Europe wants.” Spain, of course, has its own secession issues in Catalonia.
- The U.K. banks are showing little nervousness, with Barclays (BCS +0.8%), RBS (RBS +0.8%), and Lloyds (LYG +1.5%) all in the green, and HSBC (HSBC) just marginally lower.
- ETFs: EWU, EWUS, FKU, DXPS, DBUK, QGBR
Sep. 16, 2014, 8:15 AM
- Shedding more noncore costs, Royal Bank of Scotland (NYSE:RBS) has dismissed most of its team - about 10 jobs - overseeing debt capital markets in central and eastern Europe, Middle East, and Africa, reports Bloomberg.
- "RBS probably had one of the best teams in this region,” says a former Lloyds banker. “It’s a shame to see them retrenching, but the quality and now availability of these individuals is probably an opportunity for their competitors.”
Sep. 11, 2014, 7:45 AM
- There's a lot being made of last weekend's poll showing a majority of Scottish voters for the first time favoring independence, but in the spot where folks need to put money behind their opinions, it's not even close.
- Wagers placed at Betfair Group show an 80% chance of a "No" vote for independence - roughly £4M has been placed on no and just £1M placed on yes. "The big money trades continue to go on no, fueled by significant bets from south of the border," says Betfair.
- The easiest way to play a "No" vote (referendum is Sept. 18) would probably be to buy pounds, but, alas, it's bounced by nearly 200 pips since diving Monday morning in wake of the weekend poll.
- ETFs: FXB, GBB
- Other possibilities would include buying the British banks - BCS, RBS, LYG, HSBC, OTCPK:SCBFF - which have also been under pressure on worry of a break-up.
- Previously: RBS, Lloyds to relocate if Scottish independence announced
Sep. 11, 2014, 4:13 AM
- Both Royal Bank of Scotland (NYSE:RBS) and Lloyds (NYSE:LYG) have confirmed that they will relocate to England, should Scottish independence be declared next week. RBS says independence will create uncertainties which could impact its ability to borrow.
- RBS and Lloyds will have at least 18 months after the vote to take whatever action they consider necessary while the terms of Scotland's exit from the U.K. is discussed.
RBS vs. ETF Alternatives
Royal Bank of Scotland Group (The) PLC is an international banking and financial services company. The Company through its subsidiaries provides banking products and services to personal, commercial and large corporate and institutional customers.
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