Former Boss Calls Big Bank Merger 'Sad Story' & 'Mistake'
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In what the newspaper has described as a 'rare interview', Reed said: 'The specific merger transaction clearly has to be seen to have been a mistake.....It is a very sad story. Once we got the benefits from the merger in the first two years after the deal, we were not able to sustain a business model that gained traction'. Reed left Citigroup in 2000, ousted by Weill.
Bloomberg reports that German state bank Bayerische Landesbank has now reported that it has taken some $6.7bn in subprime lending-related write-downs, twice the original estimate. A new report released by accountants Ernst & Young this week said that it estimates that German banks have around $312bn in non-performing loans on their books. Shares in Credit Agricole and Natixis were down Thursday, after Citi analysts came out and said that they expected French banks to take another $6.6bn of asset writedowns this year. This is on top of the $14.8m taken in 2007.
The Wall Street Journal reports that Societe Generale has restructured its fixed income, currencies and commodities division in the light of the market turmoil. The restructure, which will result in a closer integration of the units, is not thought likely to mean redundancies.
Reuters reports that Credit Suisse analysts have come out and said that both Bank of America and Wachovia might lower their dividends in an effort to preserve capital.
Bloomberg reports that Legg Mason's Value Trust has posted its largest first-quarter fall since it was launched some 26 years ago. The fund is said to have fallen 20% in the period.
The Wall Street Journal reports that MF Global is pursuing financing alternatives that could involve the sale of a minority stake in the business. The firm's shares have risen over 25% in the last day or so following takeover speculation, although are still some 50% off their 2008 high.
Finally, Bloomberg reports that Merrill Lynch shares rose 4% Thursday, after CEO John Thain came out and confirmed that the firm doesn't need any more external capital. He also said that he doesn't have any plans to sell the firm or merge it with a rival.
