CIMB Holds Talks for RBS Asian Assets as Profit Hits Record

February 27, 2012, 10:33 PM EST
By Chong Pooi Koon
(Updates with analyst’s reaction in seventh paragraph.)
Feb. 28 (Bloomberg) — CIMB Group Holdings Bhd., Malaysia’s second-biggest bank, said fourth-quarter profit surged 30 percent to a record on increased lending as it seeks to grow its Asia-Pacific reach.
The Kuala Lumpur-based bank is in talks to buy part of the Royal Bank of Scotland Plc’s investment banking and securities business in the region, CIMB Chief Executive Officer Nazir Razak told reporters in Kuala Lumpur yesterday. It’s simultaneously in negotiations to acquire a stake in Manila-based Bank of Commerce, he said, declining to give details on both deals.
Net income climbed to 1.13 billion ringgit ($374 million), or 15.2 sen per share, in the three months ended Dec. 31 from 872.6 million ringgit, or 11.8 sen per share, a year earlier, the company said in an exchange filing. It declared a higher dividend of 10 sen per share, compared with 8 sen previously.
“I think 2012 could surprise on the upside as most of the downside risks are already quite visible,” Nazir said in a separate e-mailed statement. “The investment banking deal pipeline is good,” he told reporters.
CIMB wants to extend its regional reach after being Malaysia’s top underwriter for equity and rights offerings in the past three years. It has made acquisitions in Singapore, Thailand and Indonesia in the last seven years and may be one of two remaining bidders for RBS’s Asian equities, mergers and acquisitions businesses as well as its research arm, the Financial Times reported Feb. 7, citing people it didn’t name.
Philippine Talks
The Malaysian group is in separate talks with San Miguel Corp. and other shareholders to buy a 60 percent stake in Bank of Commerce, a person with knowledge of the matter said last month. It was the 16th largest lender in the Philippines by assets as of June 30 with 122 branches, according to the county’s central bank.
“Management again reassured that both mergers and acquisitions if successful won’t be financed through equity,” UOB-Kay Hian Holdings Ltd. said in a report today. “Financing will come mostly through internal funds.”
UOB upgraded the stock to “hold” and increased its price target to 6.90 ringgit from 6.20 ringgit, still below its unchanged market price of 7.14 ringgit at 11:05 a.m. in Kuala Lumpur trading today. Hong Leong Investment Bank Bhd. boosted its price target for CIMB to 7.78 ringgit from 7.69 ringgit, according to a separate broking report.
CIMB joined other Malaysian lenders Malayan Banking Bhd. and Public Bank Bhd. in posting increased earnings for the quarter as a domestic economy that expanded 5.1 percent last year helped spur demand for loans and financing. Hong Leong Bank Bhd. yesterday reported a 31 percent jump in quarterly net income, while RHB Capital Bhd. is expected to report today.
Net interest income, or revenue from borrowers after deducting interest paid to depositors, increased 7 percent to 1.76 billion ringgit in the quarter, CIMB said. Allowances for impairment losses on loans and financing grew 73 percent to 289 million ringgit, the company said.
–Editors: Barry Porter, Chan Tien Hin
To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net
To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net
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Online resources for doing research

If you’re considering a company as a possible investment, you’ll need to determine how healthy and promising it is. Here are some online resources that can help. (Two good offline resources are “The Little Book That Still Beats the Market” by Joel Greenblatt and “The Little Book of Value Investing” by Christopher H. Browne — both Wiley, $20.)
•The company’s own website. Look for links labeled “About Us,” “Corporate Information,” “Investor Relations,” etc., and try to read through at least the most recent annual report. Even a “Career Opportunities” section can give you insights into how heavily it’s hiring and what kinds of people it needs. Search engines such as Google.com can help you find a company’s website.
•Online company data providers, such as finance.yahoo.com and caps.fool.com. Financial statements that companies must file with the Securities and Exchange Commission (SEC) are available through such sites and also at sec.gov/edgar.shtml.
•Analyst research reports. Most major online brokerages (such as E-Trade, TD Ameritrade, Schwab, Fidelity, etc.) offer customers access to a range of Wall Street reports on loads of stocks. Learn more about choosing the best brokerage at broker.fool.com.
•Industry information. Research an industry at websites such as these: virtualpet.com/industry /rdindex2.htm, bls.gov/iag, and valuationresources.com/IndustryReport.htm. Simple Google searches can help, too.
•Historical P/E ratios and other measures. Look these up at sites such as morningstar.com.
Historical numbers can be very handy. If a company you’re examining has a P/E of 22, for example, and you see that over the past five years its P/E has usually been around 30, then you might be looking at an attractive price right now. (Do more digging, though, to make sure the company isn’t facing some current tough challenges.)
•Articles in current issues and archives of financial periodicals such as The Wall Street Journal and Fortune. You can read many online for free, and your local newspaper’s business section can be informative, too.

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Christian financial advisers welcome review into payday loans

The Association of Christian Financial Advisers has welcomed the Government’s decision to investigate payday loans.
The Office of Fair Trading is to investigate payday lenders amid claims that they are taking advantage of people in financial difficulty and providing loans without checking that borrowers can afford to repay them.
The ACFA is calling for legislation to cap interest rates.
The group outlined its concerns in a letter to Chancellor George Osborne last December in which it expressed “increasing dismay” over the manner in which payday loan companies were allowed to trade.
The letter criticised the “unfair and unreasonable” interest rates charged by lenders.
According to the Independent, the typical APR charged by a payday lender is 4,000%.
“These rates of interest are not dissimilar to those of a back street loan shark, but dressed up with a fancy website and slick paced advertising,” the ACFA stated in its letter.
“Many consumers are now using this easy access to credit as a form of roll-over credit, month by month, thereby racking up unaffordable debt at extortionate rates of interest.”
The ACFA is calling upon the Chancellor to introduce legislation to cap interest rates for all personal lending, including unauthorised bank overdrafts.
It wants to see APR capped at a maximum percentage above base rate and interest limited to a rate similar to that imposed on credit unions – currently 12 per cent.
The ACFA has asked the Government to urgently introduce a measure to limit interest rates in the forthcoming budget.
“We’re delighted the government has announced this review of so-called Payday loans,” said Chairman Aidan Vaughan.
“There should be no place for the extortion of the desperate and vulnerable.”
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Saudi- Personal bank loans skyrocket 20 times to SR219 billion in 13 years

(MENAFN – Arab News) There has been a tremendous increase in the total value of personal loans extended by Saudi local banks in recent years. It shot up nearly 20 times within the last 13 years reaching SR219 billion in 2011 from SR11 billion in 1998, according to a report in Al-Eqtisadiah business daily.
This was mainly attributed to a huge increase in the number of banking customers and their reliance on local lenders to meet most of their personal requirements. Subsequently, almost all local banks have expanded their base of personal lending substantially even without taking into account the solvency of customers. Several financial and legal experts warned customers against relying heavily on banks to meet their financial requirements but most of them ignore such warnings.
Earlier, the number of customers who took out personal bank loans was very limited. In 1998, the volume of personal loans extended by local banks was merely SR11.2 billion. However it jumped three times to SR38.4 billion in 2001. The total value of personal loans was SR178.4 billion and SR198.8 billion in 2007 and 2010 respectively.
During Q3, 2011, the volume of personal loans extended by banks rose to SR218.9 billion. These included SR27.7 billion for real estate financing, SR46.2 billion for financing purchase of vehicles and equipment, and SR144.8 billion for other purposes, while credit card loans account for SR8.65 billion.
The huge increase in personal loans attributed mainly to the remarkable growth in the number of bank customers in recent years and their increased dependence on banks to meet most of their financial requirements. A number of Saudi financial and legal experts recently noted that Saudi banks had adopted a more cautious approach while extending personal loans in the past. Before 2000, the local banks concentrated mainly in extending loans only to companies and firms rather than individuals.
However, now the situation has been changed tremendously and almost all banks are competing each other to exploit this situation and resorting to the practice of receiving personal loan repayments directly from the salaries of borrowers. This practice served as a motivation for local banks to extend more personal loans to employees without taking into account their solvency.
The Saudi Arabian Monetary Agency (SAMA) introduced regulations for consumer financing and made them binding for the local banks effective Jan. 1, 2006. Banks are able to solve all the problems related to personal loans following the regulations issued by the central bank. There was also a SAMA directive that allows banks to treat the salaries of borrowers as security if they take out personal loans. This has helped banks to expand their base of personal lending substantially.
Some financial experts stressed that consumers must take utmost care and caution while taking personal loans so as not to affect their solvency as well as to prevent them from falling into a debt trap. They noted that consumers should take loans only if they are sure that they can make their prompt repayment. Loans be taken to fulfill only basic needs and not for any unnecessary requirements. There should be precise calculations and well thought out planning before taking loans, and there should not be any hasty decisions to take a loan. Precaution is to be taken against taking loans from illegal and unauthorized financial firms so as to avert becoming victims of fraudulent means and cheating.
Also, the monthly amount of repayment must be affordable to the consumer. There should also be proper balance between spending, borrowing and savings of the consumer. The consumer must have obtained all the relevant information with regard to the terms and conditions of borrowing and be fully aware of his ability to make repayments without affecting his solvency. The experts also cautioned against the habit of taking personal loans at regular intervals.
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Remedies to help underwater homeowners not enough, PUSH panel says

BY MAUDLYNE IHEJIRIKA Staff Reporter mihejirika@suntimes.com February 25, 2012 8:36PM

Updated: February 25, 2012 9:42PM
Only strident remedies — such as a national moratorium on foreclosures and offering financial aid to “underwater” homeowners — can help stem a crisis sending severe reverberations through poor and minority communities, members of an Operation PUSH panel said Saturday.
Those communities will have to demand action through voting power and protest, seeking redress through legislative and legal means, because the recent settlement between the nation’s largest lenders and 49 state attorneys general shows they can’t count on government solutions, said the Rev. Jesse Jackson and other members of the panel.
“In the 1960s, we fought against restrictive covenants, then redlining, then for the Community Reinvestment Act. We finally get a rise in black and brown home ownership. Now this,” said Jackson, pointing to research showing the largest segment of “underwater” homes — where the amount owed exceeds the value of the home — are found in poor and minority communities.
“Much of this is race-based driven exploitation,” Jackson said. “We must now fight to recover our lost assets stolen from us and not protected by the government. We must connect our votes with our remedy.”
About 11 million households nationally are underwater.
The government bailout of banks that was supposed to help many of those households stave off foreclosure “have not helped nearly as much as it needs to,” asserted Woodstock Institute Vice President Spencer Cowan.
Nor, Cowan said, will the landmark $25 billion settlement reached last month with five top mortgage lenders, which helps only 1 million households.
“The $25 billion settlement is only a small aspect and doesn’t address the myriad other problems that led us to this point,” he said. “Nor does it address the two largest holders of mortgages, Fannie Mae and Freddie Mac.”
Others noted the crisis has pushed more of the middle-class into poverty.
“The only investment most middle-class people have is their home. Now these same people have no credit. If they can’t get a loan, their kids can’t go to college. You have a whole generation of people moving from middle-class to poverty,” said the Rev. Janette Wilson, PUSH Education Director.
The panel advocated criminal action against lenders who participated in the predatory and deceptive lending practices, issuing loans destined to fail.
“Find the people who robo-signed these loans, and start going after them. The $25 billion settlement doesn’t rule out criminal investigation of the banks for some of these other problems,” said Cowan.
Research by his group found in the six-county Chicago metropolitan region, the average underwater homeowner owes $50,000 more than their home’s value.
The number of homes hit with foreclosures in the region rose 13.9 percent in January from December — to 13,750 homes, or one in every 276 homes.http://tourism9.com/    http://vkins.com/

Banks to grab share of ECB’s €500bn loans

The European Central Bank is set to flood banking markets with €500bn (£424bn) of cheap loans this week, taking its financial support of the European Union to €1trn in just three months.

On Wednesday, the ECB will hold its second allotment of three-year loans to private banks and other institutions, known as the longer-term refinancing operations (LTRO). Analysts are expecting banks to apply for between €200bn and €750bn in total, with most forecasts around the €500bn mark.
In December, 523 banks borrowed €489bn from the first LTRO. The loans carried an interest rate of around 1 per cent a year. The new loans will be just as cheap, but the collateral requirements have been loosened. Banks will be able to pledge corporate and consumer loans, rather than just government bonds, in return for the borrowing.
The new LTRO will be conducted through national central banks, not the ECB, so governments will take the losses should their banks be unable to repay the loans.
The first unprecedented provision of liquidity has been credited by the ECB president, Mario Draghi, with helping Europe to avoid a banking crisis this year. Some banks had found it increasingly difficult to borrow in the second half of last year. These institutions used the ECB’s cheap funds to meet their liabilities.
The liquidity injection also seems to have helped bring down the borrowing costs of some distressed eurozone states, as banks, particularly in Spain and Italy, have used the money to invest in bonds issued by their governments. Italian 10-year yields have come down from above 7 per cent to 5.5 per cent. Spanish 10-year yields have fallen from 5.7 to 5 per cent.
Sony Kapoor of the Re-Define think tank said: “The bigger the LTRO next week, the more the short-term relief for the banking sector, but at the cost of making a sustainable exit from life-support even harder.”
Jens Larsen of RBC Capital Markets, argued that the LTRO would be beneficial as long as banks restructure. “If the euro banks spend the time wisely by reducing their balance sheets and raising the necessary capital that’s not so bad,” he said. “But if they’re not doing that, it’s dangerous.”

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JP Loans – Mortgage Broker Brisbane Releases a Comprehensive Guide to Low Doc Home Loans & Bad Credit Home Loans …

Brisbane, Australia (PRWEB) February 25, 2012
JP Loans, mortgage broker Brisbane have just published two guides on securing home loans for customers that have credit or document related limitations. These guides provide the potential borrowers who require low doc home loans and bad credit home loans with some useful tips on what to look for, how to minimize their cost of borrowing and ensure they get mortgages approved fast. To find out more guides and posts about home loans and finance, please visit the company website.
The guides detail several groups of customers who get their applications rejected due to bad credit that results from minor defaults arising out of unpaid utility bill, several numbers of small defaults, major defaults, or discharged bankruptcies. The guides provide tips on how to obtain up to an 80% lending ratio even with these limiting situations. Extensive research, utilizing available resources, and not to mention creating a decent payment history for the last 6 months can work wonders for bad credit home loans, according to these guides.
Low doc home loans are required mostly for the self employed customers who are not able to provide sufficient financial information as per the lending criteria. This type of loan often only requires an income declaration from the borrower or borrower’s accountant. The guide from JP Loans – mortgage broker Brisbane gives the tip that there are lenders in the market who do not even take liabilities, income, or assets of the applicant into account.   
Talking about low doc home loans and bad credit home loans, the Managing Director of JP Loans John Paynter states, “The big advantage of being a mortgage broker is having access to so many lenders and products and there is often also even a great solution for customers with incomplete documentation or a prior default”. Mr. Paynter and his team have helped many such customers to secure hassle free home loans. Meisha Robins, one of their satisfied customers from Brisbane, thanked JP Loans stating “The service you have provided was very refreshing, and I would confidently recommend you to friends. I wish you and your company all the very best”.
About the Company: JP Loans Pty Ltd is Brisbane based mortgage brokers catering to customers throughout Australia. The company specializes in home loans, equipment finance, medical finance and car loans. They not only look for the best solution for now but also for the duration of the loan. They also work with tax specialists, lawyers, financial planners along with many others to deliver you the best scenario for you. What’s more, their service is at absolutely no cost to you!
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