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As a top 10 analyst in recent stock performance and detailed research and strategy notes in banking, retail, logistics and IT services businesses I would be an ideal partner for most entrepreneurs and large company strategists, sales and marketing teams An accomplished presenter, I get frequent... More
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  • ING's Private Bank sale

    ING is trying to sell its Private Bank in Asia because it needs the $1 billion from the sale to cover the $11 billion borrowed from the Dutch Government (Netherlands, Prince Philip)

    The erstwhile sponsor of the New York Marathon, is also considering the withdrawal of ING Direct from USA after its recent failures. It had walked into a sale of ABN AMRO where it was thwarted by RBS and Barclays in 2007. It also sponsors the Renault F1 team, is AAA rated with central risk management from Netherands HO, and is 81st in the World’s Top 100 brands. Though it has recently been favored by Market pundits, it remains at the bottom of the Euro top 25 much like Alonso’s podium achievements this year, ranking just 2/3rd of SocGen which in itself is hardly known outside France despite the excellent branch network both share. Loan loss provisions are nearing trillions of Dollars ( EUR 852 million at 1.16% of RWA on a Balance sheet of EUR 1.1 billion only) Also the claim Tier I ratio of 9.4% is still low in terms of TCE

    I have the usual objections to the sale:

    1. For the buyer, It will never include sizable offshore assets from India as it works out of Hongkong, Singapore and maybe Philipines and in India it is independently owned and controlled by the ING and Vysya JV with ING stake at around 41%

    2. The China assets in Private Banking will again likely be structured products and other such which are not going to be of any significant continuous revenue and where the customers are locked in.

    3. Offshore Banking assets are being purchased by Swiss major Julius Baer who have no experience in Asia or DBS which has no real experience in Banking outside commercial bills discounting and trade services for SMEs. Thus the point also being made is that bank regulation does not ssolve all problems, it only creates more.

    4. If a wealth management major does snag the bank, the expectation from the new provider would be of tax efficient structures, which have historically been rare in Asia unless tax avoidance is counted as another viable structure :)And the European structures or the ones in Bermuda are not going to be able to offer hope to such wealth list honchos as may be 1-2% of the ING portfolio

    5. A lot of these wealth assets have historically been mortgaged/remortgaged or otherwise suspended assets from heirs and fourth generation entrepeneurs which are not what you would find in a Swiss vault

    6. Fee structures are tightly regulated in the Asian market and new sources of fee revenue may not be possible.

    All that said, I really don’t know the asset size that ING Wealth Management holds in Asia, but it would seem possible that the $1 billion price may be way off the price recd in the red tag sale underway.

    However, the mechanics of this sale are vastly different from the one attempted by RBS where Private Banking and Corporate Banking are being retained by the bank. Offshore banking teams would be largely dependent on commission arrangements with Funds and Insurance investment companies and new business is not the main revenue stream here..

    We always try to provide the latest updates with adequate references and analysis that is immediately useful to investor pools. Let us know if you want further details on any aspect and we will try our best
    Sep 10 8:11 AM | Link | 2 Comments
  • AIG rescue underway by Benmosche at Advantage zyaada

    The entire $AIG research bag |

    September 09, 2009 By: zyakaira Category: Financial ServicesGlobalInfrastructureInvestmentsUS

    Another AIG update

    As the world’s largest Aircraft Lessor, ILFC is still in play with a mountain of debt which was $17 billion even 12 months ago. ILFC and General Electric Co.’s GE Commercial Aviation Services, the world’s largest aircraft-leasing firms, are the biggest customers for aircraft makers including Airbus SAS and Boeing Co. ILFC, founded 36 years [...]


    Gaining market share in Life Insurance

    The New York Life Insurance Company, 9th till last year, jumped to No. 2 in market share behind Metlife with a near 6% market share in Life taking a leaf out of the book of the World’s best. AIG dropped just 4 places in the whole melee of the stimulus and this continuing depression. New [...]


    AIG’s Taiwan Life Unit

    zyakaira notes: The Taiwan Life unit: The recent laundry list of asset sales planned by AIG see here continues to find conflict of interest in almost each of its deals, as AIG remains the buck stopper of the entire industry’s claims good or bad..

    Bloomberg reports that Morgan Stanley’s (NYSE:MS) private equity fund pulled out [...]


    AIG sells fast to make $80b

    AIG is in quite a turn having to sell most of its profitable Asian and other International Insurance and Investment Management Businesses ( also see here)

    While it announced the division of its businesses into AIA + Alico in Life in Asia, Chartis for Property & Casualty and the Domestic US insurer, it has not gone [...]


    AIG results update

    AIG will soon be a domestic insurer if the planned three way split comes through to let the company return Federal funds as it has already spun off its International insurer AIA. In related news, all top four investment bankers are involved in this break up and sale of AIG. The current scrip (closing at [...]


    Tweets from the Market – July 24, 2009

    Do remember to validate picks at $AMZN is down 8% as we speak

    Facebook at 77 million visitors, Amazon 64 m, Craigslist at 47 m, WordPress at 26m and Twitter at 20m compared to Goog at 157m in June09
    about 2 hours ago from TweetDeck
    So $AMZN makes $1.75 bn per month from 64 million visitors
    5 minutes [...]


    Dems want higher tax on wealthy for health care – MarketWatch

    WASHINGTON (MarketWatch) — House Democrats intend to pay for their health-care reform plan with higher taxes on wealthy Americans.

    A tax on the wealthy is the “best way” to raise money for the overhaul, Rep. Charles Rangel, the New York Democrat who is chairman of the House Ways and Means Committee, told reporters late Friday.
    The House [...]


    AIG $180 b down the tube | Reuters

    American International Group Inc AIG.N, the insurer rescued by a series of federal bailouts, may have zero equity value due to the risk of more credit default swap losses and the disposal of key assets at low valuations, Citigroup said.Shares of the company fell 22 percent to $10.22 in early trade Thursday on the New [...]


    Sep 10 8:04 AM | Link | Comment!
  • Cadbury Kraft on Advantage zyaada
     We’ve all heard of the original RJR Nabisco KKR nexus, but it is still useful to remind people like us about runaway greed and when premiums on price become untenable. However in the fresh bid for Kraft from Cadbury’s, the opinion that the bid premium should only bedependent on cost savings is a little behind the times.  We all know Kraft and Irene Rosenfeld wouldn’t want to pay extra, but the Nabisco acquirer has one addl piece of knowledge, which they are going to find to be costly in the negotiated / hostile bid for Carr’s Cadbury empire.   Of the $2.7 billion sales in HY2009 (details here) over 40% is from growth markets and there sales growth would be easily in excess of 30%, with double digit margins, that have kept CBY’s 2008 net margins at 13% Thus the premium from the cost savings would just be GBP 736 million ($1.2 billion) , while the sales premium would be the additional 12% annual sales ( even if you assume the same for only 3-4 years, it amounts to another $2.4 billion from my estimates and so the price premium can easily cross 700 pence taking the price to well above 1260 pence.

    This is of course rough estimates, but it is definitely worth someone like KKR to come in and keep the right management on top.

    The Cadbury Balance sheet is entirely made of cash retained earnings making 99% of the Equity of $3 billion and it’s sales of $5.5 billion each year. There is no operating interest cost in its income statements.

    KFT on the other hand has been aggressively pursuing margin improvement strategies and is largely a domestic play

    Sep 10 7:58 AM | Link | Comment!
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  • All this is selling into china though. What is china selling next decade?
    Dec 13, 2010
  • All this is selling into china hough. What is china selling next decade?
    Dec 13, 2010
  • Brazilian miner MMX (MMXMY.PK -3.3%) will invest $2.9B to increase production at existing projects
    Dec 13, 2010
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