HSBC

WaMu, saved in the nick of time?

Jim Kim — Tue, 23 Sep 2008 12:29:28 -0400

All seemed lost for Washington Mutual just as few days ago. AIG had just cratered, as had Lehman Brothers. Everyone knew WaMu was on its last legs. Goldman Sachs staged an auction that attracted no legitimate contenders. But then came news of the massive bailout plan, which seemed to give new life to the fading, old thrift. Potential buyers are back, driven in part by the prospect that the government will take on the worst of WaMu's loans. The New York Post reports "expressions of interest" from the likes of Citigroup, JPMorgan Chase, Wells Fargo, HSBC and Spain's Banco Santander. Moody's Investors Service downgraded WaMu's financial strength by one notch yesterday as well as its preferred stock rating. There has been no run on the bank, in part because most of the accounts are less than $100,000 and insured by the FDIC.

For more:
- here's the article

Possible deals abound involving big-name banks

Jim Kim — Wed, 17 Sep 2008 17:52:43 -0400

If you're an investment bank, the stable deposits of a commercial bank, even an ailing one, look pretty attractive right now. Even before the news hit that Morgan Stanley was in talks with Wachovia, people were speculating that both Morgan Stanley and Goldman Sachs ought to think about deals. It makes a lot of sense for Morgan Stanley, providing assurances as to capital ratios. Other banks apparently have voiced interest in Morgan Stanley as well. For them, the idea may be a bit less compelling. They get to be part of a much larger, very diversified enterprise that might offer some product synergies. As for Goldman Sachs, the big news was that it was conducting an auction of Washington Mutual. Wells Fargo, HSBC and JPMorgan Chase are said to be interested. But you have to wonder if it's thinking about buying a bank outright.

For more:
- here's an article about Morgan Stanley in the New York Times
- and here's one about WaMu

Related Article:
Bank merger deals not likely

So what to make of the Lehman news?

Jim Kim — Wed, 10 Sep 2008 21:20:11 -0400

Lehman Brothers' news was designed to quell market fears. It really is being whipped around by extreme stock and CDS action. But did the announcement do the trick? Well, the general view still seems to be that the glass is at least half empty. It's never a good sign to announce deals before they are struck. But CEO Richard Fuld did make clear that he is open to strategic alternatives. CreditSights says this might still happen, counting Nomura, HSBC, Barclays and even Goldman Sachs as potential suitors for either the whole firm or a significant stake. Some private equity firms may also be interested. You get the feeling that any deal would be of the take-under variety. It does seem like a strategic deal of this magnitude is the only answer. Lehman may have found a way to survive, but surviving as a low-tier investment bank may be worse than death.

For more:
- here's an AP article
- here's a Seeking Alpha wrap up

Richard Fuld's options dwindling

Jim Kim — Wed, 03 Sep 2008 17:28:53 -0400

It's no secret that Richard Fuld is running out of options. Time is not his friend. The CEO of Lehman's best hope for a deal at this point may rest with South Korean banks. The latest: The Korean press has reported that Korea Development Bank, run by a former Lehman Brothers executive, has proposed a consortium to buy a 25 percent stake in the bank. The deal would be worth $5 billion. The deal proposal would also separate a portion of Lehman's $60.7 billion in mortgage-related assets into a separate entity. It's unclear if anything is imminent. Meanwhile, rumors that HSBC is interested have cropped up. So the Richard Fuld watch continues. It's possible that we could get to Lehman's third quarter earnings report without a deal in place. It needs to reassure the market somehow.

For more:
- here's the Forbes article
- Cramer: Deal for Lehman is likely. Video

Could anyone buy Lehman Brothers right now?

Jim Kim — Wed, 16 Jul 2008 12:25:46 -0400

The news that Lehman Brothers CEO Dick Fuld is considering a leveraged buyout highlights to some just how unattractive the firm has become to potential buyers right now. JPMorgan Chase would be a logical fit, but it is digesting Bear Stearns. Bank of America is digesting Countrywide, which will likely give it gas. Citigroup is in no position to make a major (or even minor) acquisition. The sovereign wealth funds are gun shy right now. Some have seen their investments in U.S. financial services companies tank. A MarketWatch article suggests that Deutsche Bank may be an outside candidate, along with Barclays and HSBC. Hey, the dollar is cheap right now, so why not? I doubt any bidders will emerge. So the stakes are high for Fuld. Perhaps we'll hear more about an LBO soon, though the firm can only bear so much debt.

For more:
- here's the MarketWatch article

HSBC takes a green step into the heartland

Jim Kim — Wed, 02 Jul 2008 22:11:13 -0400

HSBC's new building in Mettewa, IL, just outside of Chicago, will have a lot to offer employees--a health club, a luxury auditorium, a nondenominational prayer room and lots of high-tech features. But the bank is also aiming to make a green statement, as are other big banks these days. According to the New York Times, some features of these green buildings would include "collecting roof water for flushing toilets; using Prairie-style, drought-resistant landscaping to reduce watering needs, light-guided window treatments, which track the sun's position to trim the need for heating and air-conditioning. In addition, parts of the roof are planted with vegetation, and all of the electricity used in the building is bought from renewable or non-carbon-emitting resources, including wind farms."

For more:
- here's the New York Times article

Lehman Brothers looking for a buyer?

Jim Kim — Thu, 19 Jun 2008 07:21:30 -0400

Is there any real hope that Lehman Brothers can make it on its own? Fewer people seem to think so. CNBC reports that insiders at the firm want to sell the company before business radically worsens, forcing the bank into emergency job slashing. Already, top bankers and executives are putting out feelers to other possible employers. Conventional wisdom holds that CEO Dick Fuld has got to be thinking of a deal. Frankly, he'd be crazy not to at this point. CNBC says the list of possible buyers includes HSBC, Barclays, and Toronto Dominion. Note that they are all foreign institutions. Let's face it, there are few domestic banks that can handle such a deal right now. I can't see HSBC or Barclays ponying up right now, either. The fact is the list of possible acquirers is short. The wild card remains private equity firms. The Blackstone Group reportedly was mulling a stake.

For more:
- here's the CNBC article

SPOTLIGHT: E*Trade to sell stake in Indian firm

Tue, 20 May 2008 06:59:52 -0400

E*Trade expects a pre-tax gain of up to $30 million from its deal to sell its stake in the India-based IL&FS Investsmart for $145 million for the company to HSBC. Article

ALSO NOTED: Citigroup may sell Japanese consumer finance unit; Morgan Stanley closes infrastructure fund; and much more...

Tue, 13 May 2008 06:59:50 -0400

Company News:
> Morgan Stanley closes infrastructure fund. Article
> More on HSBC earnings. Article
> Citigroup may sell Japanese consumer finance unit. Article
> Soros on Bear Stearns. Video
> Evercore posts a 1Q loss. Article
> Ladenburg Thalmann posts loss. Article
> Bank of America to launch NASCAR commercial. Article
> Pandit flexes muscles. Article

Industry News:
> Analyst: REITs overvalued. Article
> Pearlstine to join Bloomberg. Article

Regulatory News:
> SEC looks at Wachovia and auction rate securities. Article
> Feds close a bank in Arkansas. Article

And Finally... 92-year old shareholder declares war on exec pay. Article

ALSO NOTED: Countrywide posts surprising, massive loss; Analysts upgrade Wachovia;and much more...

Wed, 30 Apr 2008 06:59:50 -0400

Company News:
> HSBC, Lone Star extends deal date. Article
> S&P credit markets hits McGraw-Hill earnings. Article
> Countrywide posts a surprising, massive loss. Article
> More criticism of the Bear Stearns "bailout." Article
> SkyBridge Capital invests in Capital Returns. Article
> Analysts upgrade Wachovia. Article
> Citigroup says to sell Royal Bank of Canada. Article

And Finally... Boost productivity by slacking off more at work. Article