Tuesday 28th July 2015
NEWS TICKER, Tuesday July 28th: The Spanish Mercado Alternativo Bursátil (MAB) has admitted INCLAM to list on the market’s growth company segment. The company will trade from July 29th this year. Its trading code will be INC and trading will be through a price setting mechanism which will match buy and sell orders by means of two daily auction periods or “fixings”, at 12 hrs and at 16 hrs. Stratelis Advisors is acting as registered adviser and MG Valores SV as liquidity provider. - Moody's: Al Khalij Commercial Bank (al khaliji) Q.S.C.'s asset quality and capital strengths moderated by high reliance on market funding. Al Khalij Commercial Bank (al khaliji) Q.S.C. (AKB) benefits from a solid overall financial profile which is moderated by high reliance on market funding and concentration risks, says Moody's Investors Service in the report "Al Khalij Commercial Bank (al khaliji) Q.S.C: asset quality and capital strengths are moderated by high reliance on market funding" - While German SME’s continue to be plagued by recruiting problems, according to a new KfW survey fewer are bothered about filling employment vacancies than they were back in 2010. More women and older people in the working population, increasing labour mobility and the rise in skilled labour from other EU countries is helping filling the employment gap. Even so, the survey suggests that over the longer term, skilled labour shortages could be the order of the day – In a filing with the Luxembourg Stock Exchange Bank Nederlandse Gemeenten has given notice of amended final terms to the holders of TRY77.5m notes at 10.01% due June 17th 2025 (ISIN Code: XS1247665836 and Series no. 1214) issued under the bank’s €80bn debt issuance programme. The amendment includes provision that the issuer may settlement any payment due in respect of the notes in a currency other than that specified on the due date subject to pre-agreed conditions. Deutsche Bank London is the issuing and paying agent, while Deutsche Bank Luxembourg is listing agent, paying agent and transfer agent. The Shanghai Composite Index ended down 8.5% at 3725.56, its second-straight day of losses and worst daily percentage fall since February 27th, 2007. China's main index is up 6% from its recent low on July 8, but still off 28% from its high in June. The smaller Shenzhen Composite fell 7% to 2160.09 and the small-cap ChiNext Closed 7.4%. Lower at 2683.45. The drop comes as investors wonder how long the government’s buying of blue chip stocks can last. Clearly, the government can’t be seen to be pouring good money after bad to prop up what looks to be a failed strategy of propping up the market. Disappointing corporate earnings data across the globe has affected Asia’s main indices in today’s trading. The Hang Seng Index fell 2.7%. Australia's S&PASX 200 was down 0.2%, the Nikkei Stock Average fell 1% and South Korea's Kospi was off 0.4%. Turnover also remains depressed on Chinese exchanges, with around RMB1.2trn the average volume traded, compared to more than RMB2trn before this current downturn – In other news from the Asia Pacific, New Zealand’s Financial Markets Authority (FMA) has issued a Stop Order against Green Gardens Finance Trust Limited (GGFT) and warns the public to be wary of doing business or depositing money with this company. The Stop Order prohibits GGFT from offering, issuing, accepting applications for or advertising debt securities and/or accepting further contributions, investments or deposits for debt securities – Meantime, in Australia, the Federal Court has found that Astra Resources PLC (Astra Resources) and its subsidiary, Astra Consolidated Nominees Pty Ltd (Astra Nominees), breached the fundraising provisions of the Corporations Act, as part of civil proceedings brought by ASIC. In his judgment, Justice White upheld ASIC's claims that Astra Resources and Astra Nominees breached the Corporations Act by raising funds from investors without a prospectus or similar disclosure document, as required under the law.

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20-20: Can ABN AMRO stake a comeback claim?

Thursday, 15 December 2011
20-20: Can ABN AMRO stake a comeback claim? It was never going to be simple but chief executive officer Gerrit Zalm had been making steady progress in turning round beleaguered ABN AMRO. The year 2011 started out promising with a strong first half but the eurozone crisis has put a question mark over whether it will return to the public markets by 2014. Despite the uncertainty, Zalm is seen as heading in the right direction. Lynn Strongin Dodds reports on the outlook for the bank. http://www.ftseglobalmarkets.com/

It was never going to be simple but chief executive officer Gerrit Zalm had been making steady progress in turning round beleaguered ABN AMRO. The year 2011 started out promising with a strong first half but the eurozone crisis has put a question mark over whether it will return to the public markets by 2014. Despite the uncertainty, Zalm is seen as heading in the right direction. Lynn Strongin Dodds reports on the outlook for the bank.

ABN AMRO’S fall from grace has been well-documented. The bank had become the symbol of the financial hubris of the pre-Lehman days with its fast past growth, high-profile takeovers and subsequent collapse. By 2007, ABN AMRO was the second-largest bank in the Netherlands and the eighth largest bank in Europe by assets. It had operations in 63 countries, with more than 110,000 employees and almost $63.9bn in revenue.  

The moniker was set to disappear when Royal Bank of Scotland, Fortis and Santander split up its international assets between them in a €72bn deal that was ranked as the world’s largest banking takeover. The financial crisis exploded a year later and the Dutch government was forced to step in to rescue not only the domestic assets of ABN AMRO but also Fortis, at a cost of some €27bn.



The two banks were subsequently merged under the ABN AMRO name and Zalm, a former finance minister who earned a reputation as a fiscal hawk, was called in as chief executive in 2009 to oversee the integration.

His task is to get the bank’s income ratio structurally below 60% and to lay the foundation for a public listing in three years’ time. To this end, Zalm has been busy cutting the workforce by about 9%, bolstering key business lines and resurrecting its energy, commodities and transportation (ECT) operations. It had sold its ECT business to Fortis in 1997 and so it is back in the fold.

Integration is still under way and the goals include improving cost efficiency, rebuilding the bank’s franchise in commercial banking and increasing market share lost in the Netherlands. Zalm is also carefully developing an international presence in the bank’s core competencies such as ECT. It has re-established a foothold in the US oil and gas market by opening an office in Dallas, staffed by a six-person team it lured away from UBS. Moscow and Shanghai are also on the list as cities where it would like to re-establish a presence.

Zalm has also returned the brand to the Dutch high street; a move which, says Claudia Nelson, senior director of Fitch, plays to the bank’s strengths. The combined entity is now the third-largest domestic bank behind rivals Robeco and ING with a market share of 15% to 25% depending on the product line, involving some 6.8m customers.

Zalm has also strengthened the private banking franchise via the respected AMRO MeesPierson brand. The bank targets customers with wealth in excess of €1m and holds around €165bn of assets under management split equally between ABN AMRO, MeesPierson and a widely spread international network. The division is also known for its global diamonds and jewellery group, which specialises in providing lending, cash management, merchant banking and transaction banking services to small and medium enterprises in the industry. Zalm is a master of detail, evinced in his product diversification strategy: he has, for instance, introduced a special service for entrepreneurs both as a private individual and as a representative of their enterprise; while ABN AMRO MeesPierson has created a dedicated service advising a wide range of non-profit organisations.

Analysts remain optimistic about the bank’s prospects on the home front, but they are more circumspect about its global ambitions in the energy sector. The general consensus is that ABN AMRO could have difficulty in competing against French banks such as Société Générale and BNP Paribas, which have a lock on the field in Europe. In fact, ABN AMRO’s former energy team ended up at BNP Paribas after it took over part of Fortis during the demerger.  

Analysts though are encouraged that Zalm appears on track to deliver the bank back to the public markets by 2014. The first-half results in 2011 show net profits of €974m compared to €325m in the same period in 2010 while its core tier-one capital ratio was 11.4%. The cost structure had also been whittled down with expenses dropping to 63% from 75% a year ago.

With the eurozone crisis rumbling in the background, the bank’s third-quarter results showed it had taken a battering as profits were almost erased by a €500m writedown on Greek corporate loans. “Uncertainty as a result of the sovereign-debt crisis, and the impact thereof on the European economy, caused us to impair part of the €1bn Greek government-guaranteed corporate exposures,” Zalm noted at the time.

Nelson says: “It is difficult to know what will happen because all banks in the eurozone will be affected. However, there has been some investor appetite for the Netherlands and there is still scope for ABN AMRO to continue to build up its business.”

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