Barclays, Lloyd’s, RBS join Goldman-Sachs in the black
They should be doing fine – all of that bailout money is running uphill into the coffers of the largest holders of debt. On the international stage, debt is power.
Flashback: Goldman-Sachs to repay TARP loan, resume private operations, bonuses, at “earliest time” possible | Which Banks Will Rule? | Wall Street’s Big Takeover | Obama appoints architects of economic collapse, financial globalism to economic team | Behind the panic: Financial warfare over the future of global bank power | Goldman-Sachs Alumni Hold Reins of Financial System | What Really Killed Bear Stearns? | Bilderberg Seeks Bank Centralization Agenda | Banks face “new world order,” consolidation: report
Julia Kollewe, Andrew Clark, The Guardian
April 14, 2009
Barclays’s shares see the biggest rise among UK banks, ‘Goldman has laid down the gauntlet,’ analysts say
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| Barclay’s eagle to rise again? |
Shares in UK banks rallied today, after better-than-expected profits at Goldman Sachs and its plans to pay back emergency bailout money boosted hopes that the worst of the financial crisis could be over.
Barclays was the second-biggest riser on the FTSE 100 index, jumping 24.25p to 201.75p, an increase of nearly 14%. That took the shares to their highest level since last October.
Lloyds Banking Group and Royal Bank of Scotland were also among the biggest gainers. Lloyds shares climbed 7.1p to 86.5p, a rise of nearly 9%, while RBS was up 2p at 31p, a gain of almost 7%. HSBC rallied 23.7p to 497.75p, a rise of 5%. The gains, which came alongside increases in mining shares, helped the FTSE advance nearly 50 points to 4031.84.
Goldman took markets by surprise last night when it brought forward its financial results to reveal a 13% surge in quarterly profits to $1.66bn – a strong result at a time of frozen credit markets.
The Wall Street bank also launched a $5bn (£3.4bn) fundraising in an effort to generate sufficient cash to become the first major institution to pay back emergency bailout money provided by US taxpayers. Goldman hopes to replenish its coffers sufficiently to return $10bn of money from the US treasury’s troubled asset relief programme (Tarp).
“It wasn’t so much the profit that gave the market cheer, it was the fact that independence from Tarp was at the top of their list of priorities,” said David Buik at BGC Partners. “Who could have been surprised that Barclays was the main beneficiary of this news this morning? With Barclays determined to stay out of Gordon Brown’s lifeboat, its shares rose like the proverbial grilse.”
Manus Cranny of MF Global Spreads concurred, saying: “A new world order is appearing in the bank arena – Goldman has laid down the gauntlet – ‘get as far away from government and as quickly as you can’ ethos, in suggesting they will repay Tarp with gusto. Thus euphoria surrounds the sector, Barclays, HSBC et al are on the up. A two tier banking industry will be become more evident – those who can repay government bailout funds quickly and those who wobble the stress test and still need time.”
He added: “The bigger question is what kind of banking system will the world be left with – the reinvented New Market wizards who will continue to leverage, trade and invent the next ill-understood esoteric trading hybrid and those institutions who have neither the capital nor human capital to play properly with the new toys. A more dangerous new world order than even the one that existed pre-credit crunch.”
Swiss bank UBS saw its shares advance by nearly 14% to 13.07 Swiss francs after announcing 240 job cuts in Asia. The losses, all in its in wealth-management division, amount to 3% of the bank’s workforce in the Asia-Pacific region.
Goldman’s better-than-expected earnings included a 39% rise in trading and investment revenues to $7.15bn.
Its chief executive, Lloyd Blankfein, said: “Given the difficult market conditions, we are pleased with this quarter’s performance.”
Revenue from fixed-income trading doubled to $6.56bn. However, revenue from equities dropped by 20% to $2bn as global stockmarkets fell steeply and the bank’s principal investments division suffered a loss of $1.41bn.
Several US banks are due to report financial results later this week and analysts will be watching closely for signs that the worst may be over after Wall Street’s multibillion-dollar losses over the last 18 months.
Buik said: “This [Goldman Sachs] of course sets the bar higher for its peers, which perhaps are not in such good shape. We will probably see very satisfactory results from JP Morgan tomorrow, but one suspects that Citigroup has some way to go before it can say all write-offs had been made and that this once titanic financial institution is finally out of the sick bay.”
Citigroup reports on Friday.
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April 18th, 2009 at 5:07 am
[...] | See also under Economics: Barclays, Lloyd’s, RBS join Goldman-Sachs in the black | U.S. retail sales fall unexpectedly | Goldman-Sachs to repay TARP loan, resume private [...]
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February 27th, 2010 at 10:21 am
[...] U.S. banks to repay U.S. bailout money | Top Senate Democrat: bankers “own†the U.S. Congress | Barclays, Lloyd’s, RBS join Goldman-Sachs in the black | Goldman-Sachs to repay TARP loan, resume private operations, bonuses, at “earliest time†[...]
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April 29th, 2010 at 1:49 pm
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