Don’t think that it is just the U.S. that has to worry about systemic risk. The Europeans have their own problems and the weaker financial institutions are getting absolutely killed in European trading right now. RBS is down nearly 13%. But HBOS is the top loser in the UK, down almost 25%.
Are [...]

Not every financial services sector company is a basket case destined for bankruptcy. There are many well-run lower risk organizations in the bunch. Moreover, let’s not blame the banking model for individual companies’ woes. The Economist had a good article this weekend highlighting the fact that it is not the universal banking model which [...]

The major European banks have gotten into the swing of things with their own reporting season. Today, Deutsche Bank and HBOS reported earnings.
Deutsche Bank recorded a pre-tax profit of 642 millioneuros after writedowns of $3.6 billion due to the credit crunch. This takes Deutsche’s total writedowns toover $10 billion since the credit crunch [...]

The U.S. House of Representatives has passed the housing bailout bill helping troubled mortgage borrowers, but also giving the U.S. Treasury Department a blank check to support Fannie Mae and Freddie Mac. The New York Times describes it this way:
Representative Barney Frank, Democrat of Massachusetts and a primary author of the legislation, [...]

Now that Friday has come to an end in the UK, we can give a post-mortem to the UK capital raising campaigns from Bradford & Bingley, HBOS and Barclays.
Bradford & Bingley shareholders have approved the bank’s £400m rights issue at an extraordinary general meeting in Sheffield.
The backing means the lender can now go [...]

This is the latest M&A rumour making the rounds in financial circles. I caught this in Today’s Financial News.

And that may be the moment when National Australia Bank (NAB:Australia) makes a formal offer for the Australian branch of HBOS. NAB, the country’s largest bank, has already begun discussing the feasibility of an offer with [...]

The UK is in the throes of the worst of the mortgage meltdown. Financial shares are tumbling. Home builders face collapse. Many top names in British housing and banking have been caught out and are getting a deserved swift kick: Northern Rock, HSBC, HBOS, RBS, Barratts, Bradford & Bingley, Taylor Wimpey — the list [...]

In April, I wondered aloud where HBOS was in this crisis in a post called “Where’s HBOS?”. Now, we know they are not immune to the problems infecting global finance.
The Guardian has reported on the difficulty HBOS is having raising money in the capital markets as its share price has fallen below the price [...]

The Sunday Telegraph is reporting yet another major Western bank is going cap in hand to sovereign wealth funds in order to stave off the inevitable crisis. This time its Barclays, Britain’s third largest bank. At a time when RBS is issuing a massive £12 billion of fresh capital by tapping its beleaguered shareholder base, Barclays must have decided it needed to go another route if it is to have success raising capital.

Another side effect of the credit crunch is the lack of availability of cheap debt financing for businesses. Companies have two alternatives: they can hold off on needed financing until the credit markets are more inviting or they can raise money through alternative means like convertible bonds and rights issues (equity offerings). According [...]