Firm Posts Record Loss
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- Top Firm Posts First Loss In 25 Years (07/05/2008)
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The Associated Press reports that Citi analyst Prashant Bhatia is estimating that Goldman Sachs will take $2.7bn in first-quarter write downs (1$bn coming from leveraged loans). Bhatia also says that Morgan Stanley is expected to write down $700m in the quarter, with Lehman Brothers writing down some $500m tied to leveraged loans and commercial real estate.
The Wall Street Journal reports that Dresdner Bank announced Thursday that it will bail out its $18.8bn structured investment vehicle K2 by providing a backstop facility on senior debt. The move should ensure that K2 can repay all of its senior debt. The SIV is managed within Dresdner Kleinwort. It's assets have been reduced from $31.2bn in July.
The Financial Times reports that Standard Chartered has now abandoned plans to rescue its $7.5bn Whistlejacket Capital SIV, which went into receivership earlier this month. There is believed to have been a continued deterioration in the value of the fund's assets in the last few days. Bloomberg quotes Calyon analyst Harpreet Parhar, who says that 'it seems Standard Chartered is the only bank sponsor not willing to stand behind its SIV, in the way HSBC or Citi have done. There is a reputational risk issue here'.
FT Alphaville reports that French bank BNP Paribas has said that it sees no further need to make provisions for US subprime lending-related assets, and is confident for the outlook for 2008.
Reuters reports that UBS has said that board members will be required to seek re-election each year in future. The bank said that 'by 2010 at the latest, the entire Board of Directors of UBS will be confirmed on a yearly basis by the Annual General Meeting'. The bank has also appointed Fiat CEO Sergio Marchionne as non-executive chairman, and Peter Voser, the CFO over at Royal Dutch Shell, to become chairman of its audit committee. Bank Chairman Marcel Ospel said that 'with these moves, we have strengthened the leadership structure in order to manage UBS's current challenges....I proposed the new tenure rule to the board, and am prepared, pursuant to their request, to stand for re-election for year one'.
Finally, according to the Guardian, Barclays President Bob Diamond looks to have bagged a $30m bonus for last year. And Diamond is not prepared to rest on his laurels - next stop is for investment banking arm Barclays Capital to really crack the US. He is still a man on a mission.
