Monday, May 10, 2010

Financials $std $gs $bac $xlf $c

· STD – the co has acknowledged its borrowing costs have risen, but says this won’t have a material impact on its bottom line; the co emphasized that Santander's roughly €27 billion in exposure to government debt in Spain, Greece and Portugal is negligible in the context of its €1.1 trillion balance sheet.  WSJ

· MCO faces possible SEC action – the co disclosed in its K (out late Fri) that it received a Wells Notice in Mar and that the SEC was considering enforcement action for making misleading statement on a license application.  The ’07 license application pertained to MCO remaining an officially recognized credit rating firm.  Sources say the cease-and-desist order would likely be limited to the specific conduct identified by the SEC.  WSJ

· GS – the co has opened informal settlement talks w/the SEC and is prepared to admit to negligence and pay a fine although will not acknowledge wrong doing and wants the main charges dropped.  GS could wind up paying $1B to settle, although some analysts thinks the fine may only be $150MM.  The Fed and Treasury are also said to favor a settlement of the charges.  Goldman will file its defense of the charges within the next two weeks.  Blankfein is said to want the “business standards committee” up and running within the next few weeks and the company is considering several high profile people from outside the banking world to sit on panel.  London Telegraph.

· GS – the co’s shareholder meeting took place Fri morning; Blankfein pledged to rebuild the firm’s image and said he wouldn’t be stepping down (WSJ/CNBC)

· GS – the co’s annual partner selection and “de-selection” process promises to be more brutal than usual as turnover among the firm’s top exec ranks has been less than normal; people will be watching to see if Blankfein promotes more bankers and non-traders to the partner rank.  FT

· Insurers – the Dodd bill currently working its way through the Senate may be changed to spar insurers from having to pay for a bailout fund.  P&C insurers won’t be subject to a levy whose proceeds will help pay for the future liquidation of failed banks.  Bloomberg 

· Virgin Money is out of the race for more than 300 Royal Bank of Scotland branches put up for sale to satisfy the European Commission – London Telegraph 

· Hedge funds return 1.29% in Apr according to forecasters;

· BAC could see a $465MM charge in Q2 and C $400MM b/c of the UK bonus tax both companies revealed in Federal filings – Bloomberg 

· Bank failures – 4 over the weekend; now up to 68 YTD – 1) 1st Pacific Bank of California, San Diego, CA ($335MM assets; CYN is buying the bank from the FDIC); 2) Towne Bank of Arizona, Mesa, AZ ($120MM in assets; Commerce Bank of Arizona is the buyer); 3) Access Bank, Champlin, MN ($32MM in assets; PrinsBank is the buyer); 4) The Bank of Bonifay, Bonifay, FL ($242.9MM in assets; First Federal Bank of Florida is the buyer). 

· BRK – the company reported Q1 earnings officially after the markets closed on Fri (Buffett had already provided some preliminary Q1 numbers during last weekend’s shareholder meeting); EPS came in at $2,272.  BV jumped to $147.2B at the end of Mar from $131.1B at the end of Dec. 

· Nomura delays its profits target by 1 year – the co aims to post a more than 500 billion yen ($5.46 billion) profit before tax in the 2011 financial year, Chief Executive Kenichi Watanabe said on Monday, dealying the target by a year.  WSJ 

· FNM - said serious delinquencies on single-family residences rose in February at the smallest rate in more than a year (WSJ)

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