October 07, 2005
Yes the blog is a little messed up right now - we are going through an upgrade and it's taking longer than planned, so bear with us. Everything does work, but some pages will display in a wonky fashion until we get this sorted.
October 06, 2005
* Thaksin floats plan to give 50% haircuts to Thai personal debtors. Only mandatory for state-owned AMCs, but expect pressure on others. "Hidden costs," says The Nation.
* Sumitomo T&B raises forecasts by 35%.
* Federal Bank acquisition of Lord Krishna is a go.
* India, Pakistan central banks working to develop rules on reciprocal branching.
* Killing the cash cow? Philippine Gov't wants to reduce cost of remittance system.
* DBS Chairman Dhanabalan to retire at year-end, will be replaced by Temasek Director and current SIA Chairman Koh Boon Hwee
* BOCHK hikes deposit fees.
* Another reason to strike against foreign sales: Korean survey finds banks which require government capital injections pay staff best.
* Kazanah completes takeover of Lippo Bank, bought from "Swiss."
* Kotak Mahindra buys out Ford Motor Credit stake in Primus vehicle finance arm, sells stake in local FMC affiliate back to parent.
Credit-Raising A Go-Go
Seems like everybody and his brother is out on the road now trying to sell some bank stock.
China Construction Bank is still in "pre-marketing" (how this is distinguished from "marketing" has always eluded me, and I've done both) for an offering which will raise $7.7bn at the top of the pricing range, but the institutional tranche is already reportedly covered. Even allowing for the prevaricatory nature of all in ECM who speak on such issues....not a bad showing. (that's what MS/CSFB/CICC are calling you about)
Mizuho is taking advantage of the run-up in Japanese bank stocks to push out $4.7bn of shares (not new but held by an older liquidation vehicle) so as to repay past government support. (Nikko/Citi/Mizuho, + MS/ML will be ringing your doorbell on this one)
Lone Star's Tokyo Star Bank (formerly Tokyo Sowa) is also on the road with Japanese investors, looking to raise up to $798m in its IPO. (a Citi/Nikko/CSFB joint, with bookbuilding 10/4-10/14 and pricing 10/17)
ECM Tid-bits: ICICI Bank's Board meets next week to discuss raising additional capital. State-owned competitor Union Bank has already applied to the government for permission to sell 45m new shares. Standard Chartered Bank (Thai) also plans to bolster equity, but with new capital coming exclusively from the parent, you're out of luck if you want any.
October 05, 2005
BNP Paribas Guards its Treasure
BNP ExCo member Alain Papiasse spoke to the SCMP yesterday in Hong Kong, disclaiming any desire on the part of the banking group to follow in the footsteps of RBS, HSBC, or BofA in plunking down large sums of cash on the mainland:
"The only thing that the group is not comfortable with is spending billions to invest in a small stake of anything," said Mr Papiasse. "If we are not in control, then we prefer a moderate investment."
He said there were now two types of foreign banks looking for opportunities on the mainland.
"The first type would try to invest a lot of money for a very small stake in a large national bank, while the second type would rather invest a small amount in a small regional bank. We definitely belong to the second group."
BNP further disclosed its interest in online (retail) broking in both China and India, and said that a China bank deal (thought as we have previously highlighted to be Nanjing City Commercial Bank) could be announced "within weeks."
October 04, 2005
* UK Banks, Insurers, Fund Cos. still optimistic, but less so than previous quarter.
* 1-day old MUFJ already having ATM merger troubles.
* GE Finance acquires Keppel Bank Philippines (ex-Keppel Monte) control for $26m.
* HSBC is unsecured creditor of Northwest Airlines - Reuters. I don't see HSBC on the list of top 100 unsecured creditors, however - I assume this means they are bondholders of one of the unsecured series listed.
* US past-due credit card bills in record territory. HSBC says environment is still benign, however.
* Mizuho T&B raises forecasts slightly.
* StanChart Nakornthon Bank is renamed Standard Chartered Bank (Thai); ticker changes from SCNB.TH to SCBT.TH (Bloomberg: SCBT TB).
October 03, 2005
First Day of MUFJ Trading
The merged Mitsubishi-Tokyo Financial Group and UFJ Holdings agglomeration is in effect today, with the new MUFJ (ugly abbreviation) trading on TSE (8306.JP) this morning. The world's largest bank sold off on its first day, closing down 4.7%.
Goldman PE Buys Another Chunk of Hana
For a market which is closed today, Korea is putting on some serious news flow.
Hana Bank, which has also expressed interest in LG Card, has bolstered its shareholding roster today by selling a 9.4% stake in its new FHC (to be listed 12/1) to Goldman Sachs' private equity unit. GS had previously bought 5m shares in Hana Bank out of treasury stock (~2.5%). It's not clear whether the FHC shares will be new primary ones or taken from other holdings.
Hana is a quite good operation, and certainly GS is getting in cheap, but our worries about the FHC concept are stoked by the presentation below, which is heavily reliant on that old saw, "revenue synergies."
* Hana September IR Presentation
* Aussie banks find US investors attentive.
* Recommended reading from September FEER: "The Great Chinese Bank Sale"
* Shin Kong FHC finalizes Macoto Bank purchase today, will raise 2005 projections. (original release)
* Lord Krishna Bank seeks 3x BV from Federal Bank in merger.
* Bank of China discloses pledges and conditions made to RBS, others.
Shinhan Grasps at Size
LG Card would likely be a good fit if done at a reasonable price; the card companies belong with banks so that they can cross-sell and enjoy stable funding. I would question whether Shinhan has the existing credit talent to keep the business from going tits-up again, but that caveat applies to almost any domestic bidder.
KEB is a head-scratcher. The obvious motivation is that its acquisition would make Shinhan significantly larger than Kookmin and Woori, and thus itself secure from takeover and able to bask in the prestige of being #1. However, the typical benefits of in-market merger would seem not to apply, given that Shinhan still has yet to integrate the last large bank it bought - Cho Hung.
I'm certain the unions won't be any more pleased about the prospect of integrating KEB with Shinhan Bank, so it would likely be another extended co-habitation under the FHC, which destroys any prospect of cost savings.
The silver lining for shareholders is that I don't see how Shinhan could finance the KEB purchase anyway - Lone Star is not going to take anything but cash on the barrelhead.