RBS paying large bonuses while Commerzbank bankers get zero

Over the past few days, a number of major European banks have announced earnings results.  Two of the most dismal results were registered at the British company Royal Bank of Scotland (RBS) and at Germany’s Commerzbank. However, the similarity ends there because, while Commerzbank investment bankers received no bonus, the bankers at government-controlled RBS received

Zero bonuses at Goldman

This is pretty major stuff: Goldman recorded negative compensation in Q4 as zero bonuses are accruing for the quarter. Reuters says: The bank recorded negative compensation expense in the fourth quarter because of the contribution to Goldman Sachs Gives, the firm’s charitable arm. The compensation total was far below the record $20.2 billion the firm

Germans must get their head out of sand on banks

Germany never participated in the upswing of the housing bubble. This fact has led German politicians of all stripes to mistakenly believe their banking system was somehow immune to the problems infecting bubble markets like the US or Spain.  Unfortunately, it has not worked out that way because the globalization of finance has shifted risk

The Germans get tough with the state banks

Last week I wrote a post suggesting that the Germans were getting tired of bailing out their banks and had moved to more draconian solutions to ‘fix’ the banking sector. Nationalizing Hypo Real Estate this week will be the first move in that direction. But the Germans are not nearly finished in their effort to

HRE: defusing the German financial time bomb

The first bank nationalization in German history is about to take place. At issue is Hypo Real Estate (HRE), a troubled Munich-based company that lends to commercial property developers and to build offices, hotels, roads, airports, you name it. This issue has been building for nearly 7 months. Back in late September, just after Lehman

German banks loaded with 816 billion in toxic paper

On Friday, the German daily Süddeutsche Zeitung (SZ) leaked a bombshell – a confidential report by Bafin, the Federal Financial Supervisory Authority, found that German banks were sitting on over 800 billion euros in toxic assets. Just three months ago, the reports coming out suggested the problem was only half as large, 400 billion euros

No one gets a bonus at Commerzbank and no dividend either

This morning, Commerzbank, based in Frankfurt, Germany, released earnings, showing a loss of 809 million euros, which was better than expected. Shares are rallying in European trading as a result. However, the big news was the draconian solution the bank has taken to eliminate its dividend and halt all bonuses to preserve cash and increase capital — an example I expect to set the gold standard for beleaguered banks going forward

The German $400 billion toxic asset time bomb

This just in from the German daily Der Spiegel: German banks are still loaded with risky U.S. assets, only a fraction of which has been written down. If this report is true, it suggests that the entire German banking sector is extremely undercapitalized and vulnerable to further writedowns going forward. However, German Finance Minister Peer Steinbrueck refuses to set up a state-controlled ‘bad bank’ as the UK has done and Sweden did before it.

You should also note that this story reveals that Deutsche Bank is the latest bank to end all proprietary trading activities. The business model of banks risking their own capital through large bets, trading for their own account is over

Germany partially nationalizes second-largest bank

This news of German goverment capital infusions at Commerzbank comes from the Frankfurter Allgemeine Zeitung in Germany. You will recall that Commerzbank was the winner in the bid to buy Dresdner Bank just a few months ago. However, this merger cannt proceed without a capital infusion from the government

Commerzbank gobbles up Dresdner

In the biggest German banking merger in history, Commerzbank, the third largest in Germany, has reached an agreement with Allianz to buy its banking subsidiary Dresdner Bank, Germany’s second largest, beating out an alleged better bid from state-owned China Development Bank (CDB). This is an historic merger with wide-reaching implications for the German and European