Apr. 29, 2014, 8:03 AM
- Among the severe scenarios under which U.K. bank balance sheets will be tested for are a 35% fall in house prices, a sharp rise in interest rates over three years to 4%, GDP slumping 3.5% below its current level, and an unemployment rate peaking at 12%.
- Among those subject to the test: HSBC, RBS, BCS, LYG.
- The exams are being run alongside European-wide stress tests, with results expected to be published in Q4.
- Even banks who "pass" the test could be requested to boost their capital, warns the BOE.
Apr. 25, 2014, 1:59 PM
- U.K. Financial Investments - the body in charge of the government's 80% stake in RBS - had wanted to approve the bonus plan, reports the WSJ, but was overruled by politicians in the U.K. Treasury. To review, the UKFI was set up in 2008 to manage the government's banks stakes at "arms length."
- Treasury Chancellor George Osborne has been a loud opponent of salary caps proposed by European regulators, but his fingers work in the wind as well as anyone else's. He reportedly met with RBS CEO Ross McEwan yesterday to discuss the issue.
- "RBS is heading in the right direction, but it has not yet completed its restructuring and remains a majority publicly-owned bank. So an increase to the bonus cap cannot be justified," says a Treasury spokesman.
Apr. 25, 2014, 11:24 AM
- At issue are claims by the 5 institutional investors that they were misled about a €12B equity raise in 2008 as the bank sought to bolster capital amid the gathering crisis. Reuters reports they plan to file lawsuits in London on Wednesday.
- "While RBS and its former directors made some business decisions that have been criticized, this does not mean that they misled investors or acted illegally," says the bank in a statement.
Apr. 10, 2014, 3:27 AM
- RBS (RBS) has agreed to pay £1.5B ($2.5B) to the U.K. government to end the sides' dividend access share arrangement, which has been in place since the bank's £45.8B bailout during the financial crisis and gives the Treasury priority over dividend payments.
- The cancellation clears another obstacle to RBS's privatization and enables the bank to make its future dividend policy more clear. However, RBS has no plans to restart shareholder payouts in the near future.
- Meanwhile, the EU has given RBS extra time to divest 315 branches that the bank has to sell as a condition of its bailout. RBS must start selling shares in the branches, re-branded as Williams & Glyn, by the end of 2016 and divest the whole interest a year later. RBS plans to float Williams & Glyn in an IPO.
- RBS shares are +1.7% in London.
Apr. 7, 2014, 1:13 PM
- Nine months ago, the European Commission accused 13 banks of blocking Deutshce Boerse (DBOEY) and CME from entering the lucrative CDS business between 2006-09, but the banks, reports Reuters, are set to fight those charges at a closed-door hearing next month.
- Should they lose, the banks could be subject to fines of up to 10% of their global CDS turnover - not a small amount given the size of the market.
- Those charged and expected to fight: C, GS, DB, BAC, BCS, BNPQY, CS, HSBC, JPM, MS, RBS, and UBS.
Apr. 4, 2014, 7:54 AM
- RBS's new CEO is Ewen Stevenson, who comes over from Credit Suisse where he was co-head of the investment bank for EMEA. He replaces Nathan Bostock at RBS, who lasted just two months on the job before exiting to become deputy CEO of Santander's U.K. unit.
- “The fact that Ewen has been co-head of global financials and co-head of Europe creates the width of experience that the CFO at RBS needs," says Bernstein analyst Chirantan Barua, who rates the stock an Outperform. "[That] goes rom dealing with regulators and litigation at risk in the U.S. to wide-ranging discussions in Europe across clients and regulators.”
- The stock's off 2% in London action.
Apr. 1, 2014, 4:43 AM
- A group of investors from across the U.S. and Caribbean have filed a class-action lawsuit against 12 banks for allegedly colluding to manipulate currency rates.
- The firms being sued include Bank of America (BAC), Barclays (BCS), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), HSBC (HSBC), JPMorgan (JPM), Morgan Stanley (MS) and RBS (RBS).
- The investors include city and state pension plans such as the City of Philadelphia and the State-Boston Retirement System.
- The suit adds to multiple investigations by international authorities into forex manipulation, the latest being the Hong Kong Monetary Authority.
Mar. 31, 2014, 2:40 AM
- Switzerland's competition commission, WEKO, is investigating several Swiss, U.K. and U.S. banks over the possible manipulation of forex markets.
- Banks being probed include UBS (UBS), Credit Suisse (CS), Julius Baer (JBARF), JP Morgan (JPM), Citigroup (C), Barclays (BCS) and Royal Bank of Scotland (RBS).
- WEKO started a preliminary inquiry in October, joining other authorities from around the world in investigating possible currency rigging.
Mar. 26, 2014, 6:06 PM
- BBVA Compass is approved for semi-annual $51M dividend payments to parent BBVA. (PR)
- As previously reported, HSBC North America was rejected from paying dividends to parent HSBC for "qualitative" reasons relating to weaknesses in its capital planning processes. HSBC N.A. expects to resubmit its plan incorporating enhancements in its processes.
- RBS CItizens (RBS), and Santander Holdings (SAN) were rejected from sending money upstairs for similar reasons, and will be resubmitting as well.
Mar. 26, 2014, 4:04 PM
- The Fed approves 25 out of 30 capital return plans from the nation's largest lenders, but rejects those from Citigroup (C), RBS Citizens, HSBC North America, Santander Holdings (SAN), and, of course, Zions Bancorp (ZION).
- Press release
- Citi -3.3%, RBS -0.2%, HSBC -1.4%, Santander -1.5%, Zions -1.3% in after-hours trade.
Mar. 26, 2014, 12:27 PM
- "You have to be the grit in the oyster, you have to be the person who asks the difficult questions," says "corporate philosopher" Roger Steare, aka "Weirdy Beardy," the man tapped by U.K. lenders like RBS, HSBC, and Barclays (BCS) to help improve banker behavior.
- He's also been called upon by the U.K. Financial Conduct Authority which - after observing that banks simply circumvent many new rules - is trying a new tack: Stop making so many, and instead put the onus on banks to create self-regulatory work environments. "Red tape is more easily hurdled than principles," says FCA boss Martin Wheatley.
- A former banker who quit because it was too boring, Steare eventually moved into executive coaching. "Banks are medieval institutions, they are not democracies," he says. "Their clients are the peasants."
Mar. 25, 2014, 1:15 PM
- Playing down rumors of a possible deal to sell its U.S. retail unit to Sumitomo Mitsui Financial Group (SMFG +0.4%), RBS says its plan to begin the IPO process for Citizens in H2 remains on track. "That is our plan," says the bank.
- The statement is in contrast with the vibe of new CEO Ross McEwan who has said he would consider offers for Citizens as RBS moves ahead with the IPO.
Mar. 24, 2014, 12:32 PM
- Sumitomo Mitsui Financial Group (SMFG -1.8%) has held discussions with Royal Bank of Scotland (RBS +2%) about purchasing RBS's U.S. retail operation - RBS Citizens - reports the WSJ. Citizens has nearly 1.4K branches and $122B in assets across 12 states, and its sale would be among the largest U.S. deals since the crisis, and one of the largest-ever purchases of a U.S. bank by a foreign company.
- Citzens is a coveted target by acquisitive banks (TD has been rumored to have great interest), but RBS - despite being under heavy U.K. government pressure to raise capital - has been a reluctant seller. That attitude is starting to change, says the Journal, with new CEO Ross McEwan saying he wants to refocus the bank on its core U.K. market.
- The current plan is for an IPO of part of Citizens later this year to raise in the area of $10B, with a full exit by the end of 2016.
Mar. 20, 2014, 5:07 PM
- Again, all 30 lenders subject to the Fed stress test passed with the exception of Zions Bancorp. Checking the individual results:
- Regional banks passing: BB&T Corp. (BBT), Comerica (CMA), Fifth Third (FITB), Huntington (HBAN), KeyCorp (KEY), M&T (MTB), PNC, Regions (RF), SunTrust (STI), U.S. Bancorp (USB).
- Credit card lenders: American Express (AXP), Discover (see here), Capital One (COF).
- Those controlled by overseas holding companies: BBVA Compass, BMO FInancial, HSBC North America, RBS Citizens Financial, Santander Holdings USA (SAN), UnionBanCal (MTU).
- Trust banks: Bank of New York (BK), State Street (STT), Northern Trust (NTRS).
- TBTFs: See here.
- More on Zions (ZION): The failure likely has something to do with CDOs on its books backed by trust-preferred securities. The bank signaled earlier this year it would likely resubmit its capital plan to the Fed as the test's calculation of its capital ratio wouldn't reflect Zion's planned sale of these.
Mar. 20, 2014, 10:35 AM
- The results of the Fed stress tests on the usual banking industry suspects are expected today, but this year's version includes 12 new companies added to last year's list of 18. Newly subjected U.S.-based lenders: DFS, NTRS, HBAN, MTB, ZION. Foreign-owned U.S. bank holding companies: BBVA Compass Bancshares, BMO Financial, HSBC N.A. Holdings, RBS Citizens Financial Group, Santander Holdings USA (SAN), UnionBanCal (MTU).
- The CCAR results - at which the Fed will give a thumbs up/thumbs down on banks' capital return plans - are due on March 26.
Mar. 17, 2014, 2:47 PM
- Ouch. Pending internal investigations into rate-rigging, Barclays (BCS +0.4%), Citigroup (C +1.7%), and RBS (RBS +1.5%) have put a hold on the bonuses of several members of their foreign exchange trading teams, reports the FT. Individual members have not been singled out - instead payouts have been frozen across entire teams until the probes are concluded.
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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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