Financial Times Summary

Tue 4 Nov 2008

Goldman Sachs
A Goldman Sachs hedge fund run by two of the Wall Street bank's most talented traders has lost close to $1bn since its launch in January, showing the extent of the crisis facing the industry.
Lloyds TSB
Lloyds TSB on Monday said it aimed to resume dividend payments during 2009, as it launched its formal offer for rival HBOS. In order to do so, it will have to repay the preference shares being issued to the UK government. Both banks also issued trading statements covering the third quarter, which each said had been difficult. Lloyds warned of a “substantial” fall in reported pre-tax profits, while HBOS said it would take sharply higher impairment charges as the threatening recession began to take its toll on its corporate loan book.
Commerzbank
Commerzbank, Germany’s second largest bank, announced on Monday it would boost its capital with an immediate €8.2bn injection from the government’s financial sector bailout fund. The agreement means Commerzbank - which is in the midst of a merger with Dresdner Bank, its rival - will not pay any dividends in 2009 or 2010. But shares in the bank rose 5.8 per cent to €8.92 by early afternoon in Frankfurt, in a sign that the market welcomed the bank’s decision to shore up its balance sheet.
Societe Generale
PARIS, November 3 - French bank Societe Generale reported an 83.7 per cent fall in third-quarter net profit on Monday and said it was financially strong enough to withstand the global financial crisis.Its shares were up 2.2 per cent at €43.09 in early trading.Net profit fell to €183m ($233.8m), with earnings hit by a €244m loss at its corporate and investment banking division. SocGen said non-recurring items from the collapse of Wall Street bank Lehman Brothers and other writedowns related to the market slump had a negative pre-tax impact of €1.208bn. Excluding this, net profit would have been around €1bn, in line with guidance given by SocGen earlier this month.
FTSE 100
London’s FTSE 100 started November in good heart on Monday, keeping the momentum from its strongest-ever weekly gain made during the previous last five sessions. The benchmark index ended 1.5 per cent higher at 4,443.28, a rally of 65 points driven by recovering mining and resource stocks as traders looked to but the heavy selling of the first three weeks of October behind them. Overall, it was the worst month since 1987 for the FTSE 100, which lost 10.5 per cent of its value over October even after a 13 per cent over the last week.
HBOS
HBOS on Monday revealed that writedowns against its profit and loss account for the nine months to the end of September would be £5.18bn, a more than doubling of the £2.46bn taken in the first half. The bank said that its “robust capital position” which will be bolstered by the £11.5bn of new capital it is raising, would help the group meet the challenges of the credit environment. It saw “good growth opportunities when the current cycle turns”.
Wall Street
US stocks were mixed in volatile trade on Monday as investors digested data that showed manufacturing last month collapsed to its lowest level since 1982.The market pared early gains after the Institute for Supply Management’s factory index dropped to 38.9. A reading below 50 indicates contraction.
Dexia
Dexia suffered a further blow yesterday as it said it would take a $132m net loss in it third quarter, after the Austrian government stepped in to rescue Kommunalkredt, a lender to public authorities. Austria's finance ministry said it would buy the 99.8% of Kommunalkredit owned by the country's Volksbanks, a largely rural co-operative banking organisation, and Dexia.

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