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Category Archives: Banking
Initial estimates suggest economy grew by 0.5% between July and September, its fifth consecutive quarter of growth Continue reading…
Union anger at plan to shed staff and shut down 6% of branches to save £1bn amid chief executives bid to start digitisation of business
Business live – all the news and comment on Lloyds Banking Group results
Unions reacted with anger on Tuesday after Lloyds Banking Group revealed plans to axe 9,000 jobs and close 200 branches as it digitises its business.
The 24%-taxpayer owned bank announced its latest round of job cuts which come on top of 45,000 posts already lost since the rescue of HBOS in 2008 as it stunned the City by taking a further £900m provision for misselling payment protection insurance. This takes its total bill so far to more than £11bn.
Deputy governor Minouche Shafik says finance sectors deep-rooted problems must be tackled to restore confidenceThe Bank of England has warned of deep-rooted problems in the City that are undermining public trust in the financial system, as it launched …
While the initial response to European Central Banks stress tests has been positive, there are good reasons to be waryNot too tough, not too lenient. That was broadly the market response to the European Central Banks stress tests on 123 of Europes comm…
Rolling business and financial news, as German sentiment slides again
Italys government has made concessions to Brussels, after being challenged over its 2015 budget plans.
Pier Carlo Padoan, minister of economy and finance, wrote to the EC today to outline 4.5bn in extra deficit-reduction measues.
At the same time, it is my duty to remind you that the Italian economy is going through one of the most severe and lengthy recessions in its history. GDP declined by more than 9% with respect to the level of 2008.
The economy is now in its third year of recession and at serious risk of deflation – or a prolonged period of very low inflation – and stagnation. A fourth year of recession is to be avoided by all means as it would be extremely problematic to pull the country out of such an economie environment. Furthermore, it would make debt sustainability much harder to be maintained.
You can read Italy’s (Padoan’s) response to Katainen at the European Commission over its budget here. http://t.co/UdThPgBOjc
Italy is going to do more – cuts of 4.5billion – to ensure it meets EU budget rules on the deficit. That leaves France in dispute.
The ban on short-selling isnt helping Monti Dei Paschis shares — theyre now down 20%!
Bank that performed the worst in the ECB’s stress test RT @Schuldensuehner: Monte Paschi Shares Resume Trade In Milan, Down 20%.
Brazils Real has tumbled this morning, losing 3% against the US dollar following Dilma Rousseffs re-election as the countrys president.
Its going to be a rough day on the Brazilian stock market, where traders had hoped that her pro-business rival Aécio Neves would triumph. Shares in oil giant Petrobras have already tumbled 15%, in Frankfurt.
Along with drop in real, #Brazil‘s Ibovespa futures fall 8.2%
Wall Street Jornal laments 4 more yrs of “economic mediocrity”.Financial world woke up today bitter that #Brazil remains on the Latinam left
Just in….. UK retailers have reported their fastest quarterly sales growth in three years, easing fears that the sector was struggling.
UK CBI October retail sales balance at +31 in October (unchanged). Three months to October best since Feb 2011
Sales on our high streets are still ticking along and, with similar prospects next month, retail growth is looking more stable.
The clothing sector in particular appears to be bouncing back after the mild weather in September deterred people from buying their winter warmers.
‘Sales on our high streets still ticking along and retail growth is now looking more stable’ http://t.co/eKCQbydd86
Oh dear, Monti Dei Paschi has just triggered another automatic suspension, as investors continue to sell heavily (via Milan trader @lemasabachthani)
BMPS -20.3% (HALTED)
Todays slump in Monte Dei Paschis shares is bad news for those traders who had driven its stock up last week.
That optimism, ahead of the Bank stress tests/asset quality reviews, has now been punctured:
Italy bans short selling on Monte dei Paschi as shares slump 20% http://t.co/GhuO4AYwoS
Italys stock market regulator has just banned investors from short-selling Monte Dei Paschis shares today, or tomorrow, Reuters reports.
That means traders cannot borrow stock in MDP to sell on the stock market, and then buy it back at a lower price to book a profit.
FTW: ITALY’S MARKET REGULATOR SAYS BANS SHORT SELLING ON MONTE DEI PASCHI’S SHARES ON MONDAY AND TUESDAY
Back in Italy, banking are still reeling from yesterdays stress tests and asset quality review.
The financial sector is feeling singled out, after 9 of its lenders failed the examination. And this could fuel tensions between Italy and the rest of Europe.
There was a surgical targeting of Italian banks with asset quality review (AQR) drones .
The ECB targeted the banks with the lowest level of transparency and governance, and the highest links with the political system.
German confidence began sliding as the West began to hit Russia with economic sanctions over the Ukraine crisis, flags up market strategist David Scutt.
This latest slide in German business confidence suggests that Europes largest economy could be in for a bumpy ride in the fourth quarter, analysts say.
Andreas Scheuerle, an economist at Dekabank, says that morale is now in a downward spiral (via Reuters).
The original mood killers – geopolitics, euro zone weakness, German economic policy and deflation concerns – have led to big downward revisions of forecasts and the weaker economic expectations are now weighing on sentiment.
Germanys economy has suffered another blow, with business confidence falling again to its lowest level in almost two years.
The Munich-based IFO institutes survey of 7,000 firms showed the sixth consecutive fall in business sentiment.
More on German business confidence: sentiment at lowest level in almost 2 years. Ifo economist sees zero growth for G in fourth Q#Germany
German IFO Current Conditions Index at 108.4 in October. Business expectations at 98.3. Both below TR forecasts for 110 and 98.9
Monte de Paschi the main stress test casualty as authorities take a sceptical line on those loans they’ve been rolling over since 1472.
The relief rally has reached Greece:
Monte dei Paschi di Siena can trace its origins back to 1472 — 20 years before Columbus spied the New World on the horizon.
Analysts say the bank has been dogged by a series of strategic misstepsin particular its 2007 purchase of Banca Antonveneta for 9 billionas well as interference by local politicians in Tuscany and shortsighted management by its majority shareholder, a Siena-based charitable foundation.
In March 2009, the bank turned to the Italian government for a cash infusion of 1.9 billion. In 2013 it went back for an additional 2.2 billion. Since then, problems at the bank compelled the foundation to sell down its stake to about 2%; new management at the bank has overhauled its strategy and shed assets.
Italian banks, which failed the EBA stress tests, are sliding rapidly Banca Carige down 18%, Monte Paschi Siena down 15%
Roberto Henriques, European credit analyst at JPMorgan, reckons the stress tests were rigorous enough:
It does meet the credibility test.
Should we be relieved, or worried, that only 25 European banks failed yesterdays examination, with just 14 still needing extra capital?
Kit Juckes of Société Générale reckons you can view it either way:
Doctor Daghi gave the European banking system a reasonably clean bill of health, the ECB observing only that a smallish number of banks have to raise a modest amount of capital.
Its either a reassuring or a naive picture of the banking system, depending on how you want to read it. Our equity analysts conclude that this is good news for bank stocks on the whole, while from a macro point of view it was largely a non-event that allows us to move on to bigger issues.
Banking analyst Sandy Chen reckons Lloyds Banking Group could struggle to pass the UKs own, tougher, stress tests, which are due in December.
A particular driver behind a weaker result would be a bigger modelled fall in UK house prices… e.g. 19% in the EBA stress scenario, versus the 34% potential fall in the house price index that was set out in the BOEs April 2014 stress test guidelines.
Shares in a second Italian bank, Carige Bank, have also slumped this morning, down 17%.
Carige, which is the largest bank in Liguria, is expected to raise at least 500m through a rights issue after European authorities found an 810m capital shortfall in its books.
Trading in Banca Carige suspended after shares opened down 17% after EBA #stresstests failed the Italian bank
Austrian lender Raiffeisens shares have also surged, by 7.3%, after passing the stress tests.
Another sign of relief — shares in Austrian bank Erste Group have jumped by 7.5%.
Italys Monte Dei Paschis shares are being hammered in early trading in Milan after it became the most high-profile casualty of the bank tests.
Trading in the worlds oldest bank has just been temporarily suspended after they slumped by 15% in a rush of early selling.
BMPS -15.00% (HALTED)
raising the question of once again how much more money must be pumped into this bottomless pit of a bank that has had to raise extra capital each of the last three years.
Most bank shares are rallying this morning, pushing the Eurostoxx Banking Index up by 1.7%.
It tracks all the main banks across Europe,
Shares in Germanys Commerzbank have surged by almost 9%, over in Frankfurt.
Commerzbank opens up 9pct after stress test pass.
The FTSE 100 has rallied 50 points at the start of trading, up 0.79% at 6439.
Mike van Dulken, head of research at Accendo Markets, says:
sentiment is being buoyed by the European bank Stress test results.
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.
Theres mild relief in Europe this morning after yesterdays stress tests of the regions banks showed up fewer problems than feared.
Eurostoxx50 futures up 1% now after ECB stress tests
A slightly ‘Gung-ho!’ stance to earning season on both sides of the pond may trigger positive opening for Europe. FTSE +20, DAX +30, CAC +19
The bank was one of nine Italian banks deemed to have failed the stress tests carried out by the European Banking Authority, which published its findings on Sunday and concluded 24 banks out of 123 it had tested across the European Union needed more capital.
Monte dei Paschi di Siena, which is already in the midst of a restructuing exercise, said it had been penalised by the methodology used by the regulators and appointed UBS and Citigroup to advise it of its options and explore all strategic alternatives for the bank.
Banca Monte Paschi, the main casualty of the ECB stress tests, called to open down 15%
Despite clean bill of health, Lloyds Banking Group will face scrutiny when it outlines plans to cut up to 9,000 jobsBritains major banks have passed a Europe-wide health check although Lloyds Banking Group will face scrutiny on Tuesday when it outlines…