Sep. 8, 2014, 7:59 AM
- "A wall of money has gone out of the banks and into fines and redress," says KPMG's U.K. head of banking Richard McCarthy. "Hopefully the most egregious things have come out and hopefully the banks will be able to move forward."
- Over the last five years, according to KPMG, the U.K.'s largest banks - BCS, RBS, HSBC, LYG, OTCPK:SCBFF - have cut consumer and business lending by $595B, or 14%.
- "There is light at the end of the tunnel," says McCarthy, with the report noting redress costs and fines fell 44% to £2.4B in 2014's first six months from a year ago.
- Meanwhile, the banks are sharply lower premarket over Scottish independence jitters. BCS -3.5%, RBS -4.1%, LYG -4.9%, HSBC -2%.
- Previously: Cable tumbles over Scotland referendum
Sep. 8, 2014, 7:52 AM
- RBS is offering 25% or 140M shares of its U.S. banking subsidiary Citizens Financial Group at an expected price range of $23-$25 per share. The underwriter greenshoe is for another 21M shares.
- The stock will trade on the NYSE under the symbol CFG.
- RBS is lower by 4.1% premarket, thanks to jitters about Scottish independence, with a weekend poll showing those favoring a breakup with the U.K. pulling past those against for the first time. The referendum date is September 18.
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. 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. 13, 2014, 7:12 AM
- Citizens CEO Bruce van Saun was brought in by parent RBS to clean things up ahead of a sale or IPO, and a key task is to improve lagging ROE. Among his moves have been building out areas like mortgage banking, auto finance, and small business banking, while disposing of unnecessary branches to cut costs.
- Now the bank is in the process of adding about 70 staff to its commercial banking division as it seeks to grow the unit nationwide. “This is something we’ve been on for a while but we’re at the point where all these pieces are coming together,” says Robert Matthews, vice-chairman of commercial banking at Citizens.
- Citizens was among the lenders which failed the Fed's stress tests this year and will not resubmit its capital plan until 2015, meaning no boosted dividend back to RBS until at least then. A float of a 20-25% stake in the bank is expected in Q4.
Aug. 11, 2014, 6:15 AM
- Royal Bank of Scotland (NYSE:RBS) is looking to sell Coutts International, its international arm of its private bank, Reuters reports.
- The bank has attracted several offers from a range of bidders for the international unit, including undisclosed Asian and North American parties for a business which manages roughly 40B Swiss francs ($44.2B) in client assets.
- Last year, Coutts International's operating profit stood at 103M francs excluding provisions, such as the U.S. tax crackdown affecting its Swiss arm.
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.
Jul. 25, 2014, 9:13 AM
Jul. 25, 2014, 7:59 AM
- Out with preliminary Q2 results a week early, Royal Bank of Scotland (NYSE:RBS) is ahead 12.7% premarket after reporting net profit of £230M vs. £142M a year ago. Helping along earnings was a £93M release from loan loss provisions vs. a £1.12B charge last year.
- The bank recorded litigation and conduct charges of £250M in Q2 and says it expects higher cost for the full year.
- "Let me sound a note of caution,” says CEO Ross McEwan. "We are actively managing down a slate of significant legacy issues. This includes significant conduct and litigation issues that will hit our profits in the months and years to come ... No one should get ahead of themselves here - there are bumps in the road ahead of us.”
- Noting the beat is mostly attributable to loan loss charge reversals which is not sustainable, Citi's team views today's reaction as "overdone."
- The official Q2 report is due on August 1.
Jul. 23, 2014, 5:38 AM
- The Royal Bank of Scotland (NYSE:RBS) is looking to retreat from Ireland as it considers selling Ulster Bank to a private equity firm, Reuters reports quoting the Irish Examiner.
- The newspaper mentions that private equity firms KKR (NYSE:KKR) or Apollo (NYSE:APO) would be the most likely candidates to buy the bank.
- The sale is dependent on the stipulations involving Ulster's distressed assets, but a price of $673M-$3.4B is expected.
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%.
Jul. 8, 2014, 8:01 AM
- It's been a tough year for the U.K. banks, but Lloyds (LYG) has shown relative strength, notes Investec's Ian Gordon and could return to positive EPS this year, while recovery for RBS remains a long way off.
- Further boosting Lloyds, says Gordon is valuation - trading at just 1.3x times his estimated 2015 book value, and the likely initiation of at least a token dividend for 2014.
- Patience is required for RBS, however, as the bank should continue to lose money for the next two years, It could take a successful IPO of Citizens - with full exit planned for 2016 - to trigger a meaningful move higher.
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. 20, 2014, 2:00 AM
- Royal Bank of Scotland (RBS) will pay $99.5M to settle a lawsuit which accused the bank of selling sour mortgages to Freddie Mac (FMCC). The case is one of two lawsuits filed by the Federal Housing Finance Agency against RBS.
- This also marks the 15th mortgage security settlement since 2011 won by the FHFA, on behalf of Fannie Mae (FNMA) and Freddie Mac.
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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