Browsing all articles tagged with Chief Executive
Jun
1

Banks In The Dark Over $15 Billion of Promised Rosneft M&A business

Banks that assist Russian oil company Rosneft finance its $55 billion buyout of rival have been left waiting for their payback a share in $15 billion in asset sales projected to follow the deal.

State oil company Rosneft’s takeover of this year aimed to generate a major oil group producing more oil than however it also tightened the Russian government’s grip on the country’s energy sector.

The asset sales promised by Rosneft Chief Executive Igor Sechin would offload less-profitable businesses to turn the company into the major oil player the CEO has stated he wants it to be. The delay demonstrate Rosneft has a lot on its plate integrating and that the sales are on the back burner.

Rosneft had dangled the juicy divestment mandates at the banks in exchange for a $29.8 billion loan the largest in Russia’s history on good terms, all the lending banks are waiting. We thought asset sales and refinancing bonds would kick start straight following the closing.

Rosneft’s slow motion is annoying the banks as they would earn fat fees from advising the oil giant on the asset sales this year, which would assist boost M&A revenues in an otherwise arid deal making landscape.

M&A activity across all sectors is losing 7 percent in Europe, Africa and Middle East since January partly due to the impact of the euro zone crisis on business confidence.

Banks that uphold big balance sheets throughout the financial crisis have been hoping to use this muscle to win lucrative M&A advisory business from competitor which had to shrink partly to meet tough European capital rules.

Banks frequently use their balance sheets to offer cheap loans to corporate clients to secure higher margin business such as share or bond issues or M&A work.

Big balance sheets helped Deutsche Bank and Barclays to achieve number 2 and 3 rankings in M&A league tables previous year, challenging US rival Goldman Sachs which had the top slot.

Apr
17

Bank of America Profit Misses Estimate as Revenue Collapse

Bank of America Corp reported a lower than expected first quarter profit and its revenue knock down, sending the No. 2 US bank’s shares down 3 percent earlier than the bell on Wednesday.

Net income quadrupled to $2.62 billion or 20 cents per share from $653 million or 3 cents per share a year earlier as expenses fall and the bank set aside less money to cover bad loans.

However total adjusted revenue knock down 8.4 percent to $23.85 billion, partly due to lower revenue from trading in fixed mortgages and income securities.

Revenue from the fixed income, commodities and currency markets knock down $829 million to $3.3 billion.

BofA shares slump 3 percent before the bell to $11.90.

Income in the year earlier period were affected by a host of one-time items including a $4.8 billion charge related to the value of its debt.

Net income in the Global Banking division chop down to $1.34 billion from $1.57 billion because net income in the Global Markets arm dropped to $1.4 billion excluding items from $1.7 billion.

Brian Moynihan, Chief Executive has made progress in building capital and settling mortgage related lawsuits since taking over in January 2010. The bank stated on Wednesday it had settled a mortgage backed securities class action lawsuit related to its nationwide unit for $500 million.

However Moynihan is under pressure to show that the bank can create higher earnings at a time of low interest rates, volatile economic conditions and stricter regulations.

BofA, the last of the big four US banks to report outcome has vowed to cut $8 billion in expenses by mid 2015 and has stated it could reduce expenses in its division that handles delinquent mortgages by $1 billion by the end of 2013.

The bank stated on Wednesday it expects to save almost $1.5 billion in costs per quarter, by the fourth quarter of 2013, representing 75 percent of the quarterly target. Total expenses knock down 5.2 percent to $18.15 billion in the first quarter.