Financial Times Summary

Fri 31 Oct 2008

Lloyds TSB
Peter Cummings, banker to retail entrepreneurs such as Sir Philip Green, has been frozen out of the new management team unveiled by Lloyds TSB as it takes over HBOS. Just two out of the top 11 jobs in the new bank will go to HBOS executives, with Lloyds TSB executives taking most of the top roles in a team headed by Eric Daniels, chief executive of Lloyds, and Sir Victor Blank, the bank’s chairman.
Barclays
Barclays, was last night, close to securing a capital injection worth around £6bn from Middle Eastern governments, including Qatar and Abu Dhabi, in a move that will allow the UK bank to boost its balance sheet without turning to the British state for cash. Barclays executives were last night finalising the terms of the capital increase with investors including the Qatar Investment Authority and an Abu Dhabi-based sovereign wealth fund.
US Economy
The US economy contracted in the third quarter at an annualised rate of 0.3 per cent - its worst performance in seven years but beating economists’ forecasts, the commerce department said on Thursday. The hit to gross domestic product was driven by a 3.1 per cent drop in consumption, which accounts for a large chunk of economic activity, and had not shown a decline since 1991.
Standard Life
Standard Life on Thursday said third-quarter sales of pensions and life products tumbled 11 per cent, missing analysts’ expectations. Third-quarter sales fell to £3.4bn and worldwide sales in the nine-months to September 30 were £12.4bn. Analysts had expected worldwide sales of £12.6bn and net inflows of £2.3bn.
Deutsche Bank
Deutsche Bank, Germany’s largest bank, benefited from amendments to accounting rules to record a profit in its third quarter. Net income of €414m ($547m) came in spite of “extraordinary conditions”, Josef Ackermann, chief executive, said. “The outlook remains extremely challenging,” he added.
Deutsche Bank
Deutsche Bank has recorded a profit instead of a loss in its most recent results by using new accounting provisions designed to mitigate the impact of the financial crisis on European banks.Germany’s largest bank is the first big European institution to use the opportunity to avoid having to account for some of its assets at their severely impaired market value.
Erste Bank
Erste Bank, one of the top three banks in Austria, on Thursday became the country’s first to tap into a government’s bank recapitalisation scheme, with an agreement to take €2.7bn ($3.5bn) in state funds to bolster its balance sheet. Erste, which has a strong retail base in Austria’s savings bank system, has suffered a double blow in recent months. It suffered initially from the general malaise of the sector and, more recently, has been hammered by concerns about emerging markets. The group is highly active in central and eastern Europe, including Hungary, where the government has had to seek a support package from the International Monetary Fund.
Citadel
Citadel Investment Group, the alternative investment house, is winding down its $1bn fund of hedge funds and redeploying the capital to support new hedge funds as they emerge in the coming months. The move suggests Citadel is positioning itself to back managers who have quit the business or been forced to shut their funds in recent weeks as they launch new funds in the coming months.
AIG
AIG has raised funds from a new Federal Reserve lending facility to repay part of a $123bn Fed loan that is keeping the stricken US insurer alive, in a move that could deepen the political backlash over its use of taxpayers’ money. AIG said on Thursday that it had tapped a Fed lending window designed to kick-start the flagging market for commercial paper and used some of the proceeds to pay back part of the government loan.

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