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Markets 2nd February 2012

Eurocomparisons: BBVA profits fell by 34.8%; Deutsche Bank’s by 76%

By Tania Suárez, in Madrid | BBVA earned 34.8% less compared to last year, not such a significant figure when compared to Deutsche Bank’s (the largest bank in Germany) decrease of 76%. Despite this reduction, Sabadell and Banesto analysts recognise that the Spanish bank’s 4Q’11 results are better than expected. The only downside is the PAT, which was below the market consensus estimates (PAT:-139mn euros vs.938.53mn euros in 4Q’10 and…

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Markets 2nd February 2012

Plans to force mergers in Spanish banks might backfire

[UPDATE] By Juan Pedro Marín Arrese, in Spain | The Spanish government will disclose on Friday its plans for a massive clean-up in mortgage-backed bad loans from banking balance sheets. This move is indeed highly welcome so long this overhaul doesn’t push too far eating all resources at hand. Once a €50 billion adjustment has been announced, markets will only settle for a substantially higher figure. In many cases, meeting such…

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Markets 1st February 2012

Desperate British bankers and the knighthood raiders

LONDON | Who in Britain would place faith in the good nature of bankers? While Wednesday afternoon the House of Commons played volleyball blaming either Labour opposition or the Conservative-led Coalition cabinet for the bonus pool available to top Royal Bank of Scotland 83pc-public workers (remember the €45 billion taxpayer bailout), how lonely Commerzbank’s chairman Martin Blessing must have felt. Mr Blessing told a London court on Monday that most of his…

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Markets 31st January 2012

Zero hedge, but tons of garbage

WASHINGTON | Since it started, in January 2009, Zero Hedge has marked a new style in financial journalism. It is anonymous, and its main ‘writer’, Tyler Durden, is a character from a movie. It has an encrypted email system, so anonymous sources can send allegedly confidential documents. Its reputation among investors and regulators is more than dubious, but its popularity is beyond doubt. Its Twitter account, which portrays the bloodied…

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Markets 31st January 2012

Santander’s Botín to Spanish banks: it can be done, good results and provisions

By Tania Suárez, in Madrid | Banco Santander’s 4Q11 results are better than expected: it has registered attributable net profit of €5.351 billion, down 35%, after extraordinary provisions of €3.183 billion. According to Sabadell’s analysts, Santander “has achieved better results in the UK than expected, despite having suffered the negative effects of the new UK liquidity regulation.” Santander has noted important expenses (€3.180bn) with its property portfolio, with its Portuguese…

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Markets 27th January 2012

Investors swarm off European funds at their loss

LONDON | The dramatic meltdown of confidence in the euro zone’s economic performance left the European fund industry suffering almost €70 billion in flows out of equity funds in 2011. Data colected by Morningstar European funds show that over €119 billion were extracted from long-term funds last year, and although money market funds still saw strong inflows in December, with €4.4 billion, flows to short-term funds were negative for the last…

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Markets 24th January 2012

The crisis, the chicken and the egg

By Luis Arroyo, in Madrid | The great cause of the financial crisis was the spreading of risk through previously unknown channels. New financial instruments were invented, ‘collateralized’ with original assets and loans (mortgages), and sold and resold to re-lend the proceeds of the sale. The standardization of the process, despite its darkness, made it easier to hide the risk to the rest of the world. The initial risk was…