Category: UK

Canada, UK, US1 Comment

Enormous shifts have occurred in banks’ market capitalisation

Colin Henderson

The degree of shift that has occurred and is occurring as we speak with respect to bank valuations is simply staggerring.  What got me going on this was when I noticed that the combined market capitalisation (stock exchange value of a company) of Lloyds Bank, Barclays, and HBOS was less than several of the Canadian banks.  So with the valuable assistance of Google Finance here are some statistics, with some notes following. the banks picked here have had their value cut in half the UK banks are in terrible shape with low market cap, and reflecting low P/E the Canadian … Continue reading Enormous shifts have occurred in banks’ market capitalisation

Canada, sub prime, UK, US

Canada banking sector is avoiding the troubles in US and UK

Colin Henderson

The press is all doom and gloom at the moment.  Not without reason, but the causes and implications are getting blurred.  So I did a simple analysis comparing three stock markets, their fall since mid 2007, and the relative importance of the banking sector in that fall.  The results suggest that it does depend where you live.  There is an all out banking crisis in the US and UK, based on market sentiment.     Somehow Canadian banks are not regarded with such fear as the others.  This no doubt partly due to the early work of Purdy Crawford and … Continue reading Canada banking sector is avoiding the troubles in US and UK

EU, UK, US1 Comment

How much of this is a US bailout for a European problem?

Colin Henderson

Sometimes you have to read something twice because you thought it was a mistake.  I had that moment in an article in the paper version of the Financial Times this morning.  It lists European Banks, and shows the percentage their assets are of their country’s GDP.  Here is a synopsis, with just those that are close or exceed their country’s GDP. For fun I added the North American view, and even more fun I added Microsoft, one of the largest companies in North America.  It shows that the relative size of Banks to the European economies is a significant proportion, … Continue reading How much of this is a US bailout for a European problem?

UK

Lloyds takeover of HBOS is finalised at $12 bn | could be the new "worlds largest Bank"

Colin Henderson

Here are some background facts on the two banks.  The combined employee base is 142K now, with nearly $1 bn in assets. Their tier 1 capital if we take the % times the combined asset base, suggests the new Bank come in around $160 bn, which if I am correct, will make them the largest bank in the world, based on capital base.  However the accounting in a merger is not simply additive, so that isn’t definitive, but directionally the new UK Bank is enormous. Technorati Tags: Lloyds,HBOS,worlds biggest banks Continue reading Lloyds takeover of HBOS is finalised at $12 bn | could be the new "worlds largest Bank"

UK

HBOS … could they be next?

Colin Henderson

Serious concerns about my old alma mater Bank voiced from Citi analysts.  They have a significant funding gap apparently, although by my calculations they are very well capitalised.  Their issue appears to be liquidity.  The vultures are lurking.  In a related note, apparently 25% of WAMU shares are sold short at the moment.  HBOS falls on wholesale funding concerns Shares in the UK’s largest mortgage lender fell up to 40 per cent earlier in the session and settled 50½p lower at 182p, cutting its market capitalisation to £9.58bn ($17.1bn). The collapse of Lehman has made banks more reluctant to lend … Continue reading HBOS … could they be next?

UK

Barclays – bad time to take holidays!

Colin Henderson

Barclays are coming under considerable scrutiny as a result of two unrelated sets of circumstances.  Nerves are frayed amongst bankers, even the big ones! FT.com / Companies / Financial services – Anxious market catches Barclays short of £1.6bn The trigger for the crisis of confidence was the unexpected resignation two weeks ago of Edward Cahill, the Barclays investment banker responsible for creating vehicles such as Cairn High Grade Funding.  Although a relatively junior banker, Mr Cahill’s departure sparked rumours about possible losses at the bank. Nevertheless, confidence took such a knock that, after a technical glitch disrupted the money markets … Continue reading Barclays – bad time to take holidays!

Canada, EU, UK, US1 Comment

Mapping the credit crunch |Financial Times

Colin Henderson

Nice interactive map showing the worldwide impacts. FT.com / In depth – Mapping the credit crunch The FT’s exclusive interactive map charts how and when many of the financial groups affected by the crisis in the US subprime mortgage markets and the consequent turmoil in credit markets worldwide either made a killing or lost their shirts. Continue reading Mapping the credit crunch |Financial Times