Contributing Member of the Financial & Business Services Councils

GLG News by this Author

GLG News is now G+ Insights

G+ is a community for professionals, academics and entrepreneurs to connect through online discussions and in-person meetings. You will continue to see G+ Insights (formerly GLG News) here as well as on the G+ website, where you can share and discuss the G+ Insights you read.

A well timed step to create Eastern European Venture Capital Fund

December 22, 2008

Analysis of:SBI of Japan Creates Eastern European Venture Capital Fund, Expects Growth | www.bloomberg.com

Coming up in the regime of irresistibly low valuations & acute shortage of Bank credit, the setting up of its first Eastern European Venture Capital Fund by SBI couldn’t have come at a better time. The Fund can pick up majority stake in select Small & Medium Enterprises in the region at most bargaining prices to reap sizeable growth in the medium term.    In the face of large foreign exchange reserves in Japan, the investments made at rather cheap valuations, aided by an appreciating yen would make the investment risks much lower in select cautiously chosen SMEs.

HBOS Merger with Llyods TSB- The inevitable option

December 22, 2008

Analysis of:HBOS shareholders approve merger with Lloyds TSB | www.bankingtimes.co.uk

The severe multi-pronged impairments of the financials of a Bank often leave it but with the Hobson’s choice of its merger with a more stable Bank.  The approval of shareholders of HBOS and Llyods TSB in favour of a merger of the two Banks is the obvious progression of the Rescue plan announced in September, with the  the all-share deal approved by the Government. The sizeable bad debts & mortgage impairments reported by HBOS for the first eleven months of the year only vindicated the urgency for the remedial rescue plan. Though the Merger would have its woes in resultant branch closures or job losses the merged entity would make the biggest Retail bank in UK with anticipated annual savings of GBP 1.5 Billions.

Credit crunch- Corporate size not a virtue any more

December 16, 2008

Analysis of:Waiving or drowning? | www.economist.com

The conventional perception that large corporates can well tide over a Credit crisis by their sheer size does not hold any more in the face of the present Economic downturn that threatens to uncover every unhedged risk that these corporates were probably exposed to. In the current crisis it is not the size but the substance that would enable the corporates to sail through. In case of large corporates the problems are not only large they are very complex too. The Lenders are therefore bound to be reluctant to commit or continue with large exposures on such corporates which don’t stand through their stringent scrutiny.

Shinsei Bank-A victim of misplaced business strategies

December 15, 2008

Analysis of:Wilting flower | www.economist.com

The old quote "While in Rome do what Romans do” applies to the Banking industry as well.  The Shinsei Bank set up with much fan fare with American capital & expertise failed to live up to the expectations of its stake holders because of its Management’s inability to blend well with the psyche of the Japanese business environment. It was speculative on part of Shinsei Bank to have followed in Japan what some big brothers were doing in USA, trying to achieve Fast forward results by venturing into Consumer loans, Sub-prime mortgage backed securities & loans & bonds of the likes of Lehman Brothers. The Bank may need to drastically reorient its business policies & strategies to emerge out of its current problems.    

HSBC carves out a support line for Small Businesses

December 15, 2008

Analysis of:HSBC backs SMEs with £1 billion fund | www.bankingtimes.co.uk

HSBC has well responded to the need of the economy & the will of the UK Government by dedicating a 1GBP Billion funding line to its SME clients. That the proposed funding line would be used to meet the working capital needs of its existing SME customers with strong financials that are facing cash flow problems, with a risk based pricing shows that the Bank doesn’t want to compromise its prudence in lending in the garb of an SME rescue plan. It is essential for the Banks & the Government to meet the legitimate funding requirements of SMEs facing genuine cash flow problems to facilitate a more broad based & inclusive recovery of the economy.

Bank Guarantee Rescue Plan – Need to preserve the integrity of the Banking system

December 15, 2008

Analysis of:Bank guarantee will mean survival of the weakest | archives.tcm.ie

Bank guarantee should be used as a medicine to cure the ills of the weaker banks & not as a staple food. There is a simultaneous need to beef up the management & systems in these banks to prevent further deterioration. The banks also need to be recapitalized at appropriate stages & with appropriate doses, by the Government directly or by the larger Banks which could eventually be supported by the Government.

PRUDENT INITIATIVE BY RBS TO DEFER MORTGAGE FORECLOSURES

December 11, 2008

Analysis of:RBS Promises Borrowers Six-Month Respite Before Foreclosing on Mortgages | www.bloomberg.com

undefinedundefined undefined The RBS initiative to give respite albeit of six months on foreclosures of delinquent mortgages is a strong message to the Mortgage lenders across UK to follow suit.   It could probably be a graded beginning to be followed by further extensions upon review of market conditions.   It is a prudent approach in the face of declining carrying costs & falling home prices.

Page : 11 to 7 of 7