VTB’s London unit slashes headcount by 22% to reduce losses

Posted by admin on 09/21/2016 in Unsecured Lending | Short Link
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The bank entered into a commercial lease agreement for office space for five floors at 14 Cornhill, a prestigious building next to the Bank of England.

In the filing, VTB said it had an option to break the lease from August 2024 and it may have well have to further reduce costs. The bank has already entered into a sub-lease deal for two floors of the office space it no longer needs, according to the filing.

VTB Capital may fall foul of new related-party lending rules being drawn up the Central Bank of Russia (CBR), which is trying to clamp down on the practise. The investment bank generated net operating expense worth $234mn last year from transactions with its parent group, according to the filings. That was down from $301mn in 2014.

In the filing, VTB Capital said the interest charged to and by related parties is “at normal commercial rates.”

“A number of banking transactions are entered into with related parties in the normal course of business, with all such transactions complying with US and EU sanctions regulation,” said VTB Capital. “These include loans, deposits and foreign currency transactions all undertaken at ‘arm’s length.'”

The new rules, which are set to come in force by January, would leave about one in four banks in violation, according to the ratings agency Standard amp; Poor’s. Russian lenders’ exposure to related parties has already played a key role in some of the country’s largest bank collapses. Bank of Moscow, which was bailed out by VTB in 2011, had previously lent billions of rubles lent to a property company controlled by Elena Baturina, the wife of then-mayor of Moscow Yury Luzhkov.

The lender said the size of the corporate’s lending portfolio remained unchanged and was still dominated by a number of medium and long-term senior unsecured lending transactions involving “a number of African sovereign and quasi-sovereign entities.”

Leading Western investors have reined in all trading activities with VTB Capital and other Russian brokerages for fear of drawing regulatory scrutiny and fines. As business has dried up in the US and the UK, both VTB Capital and its parent have made an aggressive push to secure more business in Africa and Asia.

“Our primary focus was – and will continue to be – growth, combined with a high margin model in both our core domestic and new international businesses,” Moos said in the filing. “One of VTB’s priorities is in expanding the company’s presence, in particular in Africa and Asia, where a number of major transactions have been completed.”

However in July, Reuters reported that some holders of Mozambiques restructured tuna bond are planning to suing VTB and Credit Suisse after it was revealed the country owed $1bn more to creditors than it had disclosed.

Bondholders have formed an informal group and hired a law firm, alleging that neither the banks nor government made full disclosure of the size of Mozambiques debt. Only after the bond swap and IMF pressure did Mozambique admit the state tuna-fishing firm had an additional $1.35bn in secret government guaranteed debt.

Swiss and UK financial watchdogs are looking into VTB and Credit Suisse’s involvement in organising the deal, sources told Reuters last month. VTB has declined to comment thus far.

The bank said it had made “significant progress” in China as President Vladimir Putin advocated a push by Russian corporates to pivot towards its large Asian neighbor for financing and deal-making.

In 2015, its bankers acted as a financial adviser to ChemChina, the largest chemical company in China, in relation to its cooperation with Russian state oil producer Rosneft. They also worked on a deal by China’s largest public port operator to acquire Kumport, a leading container terminal in the Turkish capital of Istanbul.

VTB Capital has far from given up on Europe and managed to complete a number of noteworthy deals on the continent during the year. It inked its first cross-border Mamp;A deal in Spain, advising the Portuguese fund Finpro on the sale of its stake in the Spanish port company Grup Mantim TCB. It also completed its first Mamp;A transaction in Germany, advising German Prevent Group on its purchase of a car parts manufacturer.

The unit’s maximum credit exposure to any client is a whopping $428mn to insurer Lloyd’s of London, who helped VTB Capital to “de-risk some of its larger African sovereign exposures by writing comprehensive credit insurance.”

VTB Capital’s highest paid director received remuneration of $2.84mn last year, down from $3.42mn in 2014. The name of the director is not given.

Kostin, who mulled removing the banks listing from the London Stock Exchange in favour of China, previously warned that he doesnt expect US sanctions to be lifted until 2018. The EU prolonged its measures against Russia in July by six months despite growing opposition from officials from Greece, Italy France.

VTB Capital earned just $9mn in fees from arranging bonds, mergers, IPOs and loans in the first six months compared to $27mn for the same period of 2015, according to data supplied by New York-based consultancy Freeman amp; Co. The business, which has been Putin’s investment banking champion since its inception in 2008, lost ground to state-controlled rivals Sberbank CIB and Gazprombank, which earned $33mn and $28mn, respectively.

VTB Capitalwas the sole organiser of the Kremlinscontroversial $1.75bn Eurobondsale in May.Despite all the hoopla generated by deal, fees paid out to VTB Capital were very low. Based on regulatory filings, Freeman amp; Cos told bne IntelliNews fees to VTB look to have been only about $875,000.

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Donors help Stearns girls afford 2-hour bus trips to play soccer with Lee Academy

Posted by admin on 09/20/2016 in Secured Funding | Short Link
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Emma Alley (left) of Stearns High School in Millinocket, pictured playing in the 2016 Class C North basketball tournament in Bangor, is among several students at the school who hope to play soccer on a cooperative team at Lee Academy. The team has secured funding for buses, fuel and drivers to be able to make the 80-mile round trip several times per week during the fall season.

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JPS Works Around Department of Education Shortfall

Posted by admin on 09/17/2016 in Secured Funding | Short Link
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JACKSON, Miss. The first week of school is in the books for public schools across the state, but now districts must address a multi-million dollar shortfall.

Last week, the State Department of Education announced a $19.1 million deficit that has after school programs hanging in the balance.

We won’t be able to conduct the after school on such a large scale, but we are very confident that we can address those children who like I stated earlier are our most challenged learners, Abby Webley, Executive Director of Federal Programs for Jackson Public Schools said.

Down sizing the program is what JPS. will do after the Mississippi Department of Education announced they will no longer give grants to fund over 100 of the states supplemental programs.

It’s come at quite a blow, I need you to know that I mean the last thing that I would ever want is to impact negatively any child in the state, State Superintendent of Education Carey Wright said.

In a statement Governor Phil Bryant called the error poor decision making.

This is the latest example of what has become a pattern of poor decision-making and mismanagement at the Mississippi Department of Education. The State Board of Education must remedy this immediately, the statement read.

I am very confident that the State Department of Education is working very diligently with the US Department of Education to fix this shortfall, Webley said.

The shortfall dates back to April when more money than available was awarded.

Now with a $19.1 million deficitthere is a halt on after school programs like tutoring, ballet, golf, and culinary arts.

JPS says this loss of funding will affect 3,000 students, but they have secured funding from other sources so some students will stll have access to programs.

The programs are expected to begin next month.

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The complicated and difficult, yet labour and tech friendly future of the Post Office

Posted by admin on 09/16/2016 in Unsecured Lending | Short Link
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How Analysts Rated Secure Trust Bank Plc (LON:STB) Last Week?

Posted by admin on 09/15/2016 in Unsecured Lending | Short Link
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Out of 3 analysts covering Secure Trust Bank PLC (LON:STB), 3 rate it a Buy, 0 Sell, while 0 Hold. This means 100% are positive. Secure Trust Bank PLC has been the topic of 10 analyst reports since October 15, 2015 according to StockzIntelligence Inc. Below is a list of Secure Trust Bank Plc (LON:STB) latest ratings and price target changes.

09/08/2016 Broker: Canaccord Genuity Rating: Buy Old Target: GBX 2500.00 New Target: GBX 2585.00 Maintain
20/07/2016 Broker: Canaccord Genuity Rating: Buy Old Target: GBX 2500.00 New Target: GBX 2500.00 Maintain
19/07/2016 Broker: Shore Capital Rating: Buy Upgrade
18/07/2016 Broker: Peel Hunt Rating: Buy Old Target: GBX 3800.00 New Target: GBX 2500.00 Maintain
22/06/2016 Broker: Peel Hunt Rating: Buy Old Target: GBX 3800.00 New Target: GBX 3800.00 Maintain
27/05/2016 Broker: Peel Hunt Rating: Buy Old Target: GBX 3800.00 New Target: GBX 3800.00 Maintain
23/05/2016 Broker: Peel Hunt Rating: Buy New Target: GBX 3800.00 Initiates Starts
21/03/2016 Broker: Canaccord Genuity Rating: Buy Old Target: GBX 4000.00 New Target: GBX 4000.00 Maintain
17/03/2016 Broker: Canaccord Genuity Rating: Buy Old Target: GBX 4000.00 New Target: GBX 4000.00 Maintain

The stock decreased 3.07% or GBX 69 on August 12, hitting GBX 2178. About 4,788 shares traded hands. Secure Trust Bank Plc (LON:STB) has declined 32.47% since January 13, 2016 and is downtrending. It has underperformed by 46.10% the SP500.

Secure Trust Bank PLC is engaged in providing banking and financial services. The company has a market cap of 396.22 million GBP. The Companys principal activity is banking, including deposit taking, and secured and unsecured lending. It has a 21.88 P/E ratio.

The institutional sentiment increased to 1.14 in 2016 Q1. Its up 0.59, from 0.55 in 2015Q4. The ratio is positive, as 6 funds sold all Secure Trust Bank Plc shares owned while 16 reduced positions. 9 funds bought stakes while 16 increased positions. They now own 18.74 million shares or 6.10% more from 17.66 million shares in 2015Q4.

Park Circle Co holds 2.48% of its portfolio in Secure Trust Bank Plc for 642,200 shares. Wealthtrust Axiom Llc owns 906,807 shares or 1.81% of their US portfolio. Moreover, Hillsdale Investment Management Inc. has 1.64% invested in the company for 948,900 shares. The Maryland-based Wms Partners Llc has invested 0.49% in the stock. Caisse De Depot Et Placement Du Quebec, a Quebec Canada-based fund reported 8.00 million shares.

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Secure Trust Bank PLC reiterated as Buy By Canaccord Genuity

Posted by admin on 09/14/2016 in Unsecured Lending | Short Link
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Secure Trust Bank PLC is engaged in providing banking and financial services. The Companys principal activity is banking, including deposit taking, and secured and unsecured lending. The Companys segments include Business finance, including Real Estate Finance, which offers buy-to-let and development loans secured by the United Kingdom real estate; Asset Finance, which offers loans to small and medium sized enterprises to acquire commercial assets, and Commercial Finance, which includes invoice discounting and invoice financing; Consumer finance, including Personal lending, which provides unsecured consumer loans sold to customers through brokers and affinity partners; Motor finance, which hires purchase agreements secured against the vehicle being financed, and Retail finance, which includes point of sale unsecured finance for in-store and online retailers, and Other, including Current account, OneBill, Pay4later, Rentsmart and debt collection.

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Downeaster to boost Brunswick service by building new track

Posted by admin on 09/12/2016 in Secured Funding | Short Link
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The northbound Amtrak Downeaster heads toward its stop in Brunswick on Friday. Amtrak secured funding to install a rail siding that will allow the agency to run five daily round trips between Brunswick and Boston. The Downeaster now only runs two-round trips between Brunswick and Boston, but will add a third when it completes a layover shed in September. Brianna Soukup/Staff Photographer

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Column: Bankruptcy code can help ease NPA pain

Posted by admin on 09/01/2016 in Unsecured Lending | Short Link
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Given the bad-loan crisis that grips the banking sector, the Bankruptcy Code brings greater certainty and speed with regard to filing, processing and resolution of bankruptcy pleas. It also addresses the concerns of both creditors and debtors by creating a level playing field.

The code provides banks with much-needed muscle to deal with NPA accounts; it enables them to realise the maximum value out of an asset once a firm is declared bankrupt.

It imposes jail terms of up to five years for asset-stripping of insolvent companies and mandates companies’ liquidation if an insolvency process is not resolved within 180 days.

Apart from this, a new class of insolvency professionals will help sick companies and banks with smooth liquidation. The code aims to consolidate the plethora of insolvency laws in force today and bring them under one overarching umbrella.

A regime of fast insolvency and bankruptcy resolution is imperative for the Indian banking system, given the legal and institutional machinery for dealing with bad debt has had limited success.

According to the World Bank, establishing corporate insolvency in India takes more than four years, compared with just six months in Japan, eight months in Singapore, one year in UK, 1.5 years in the US and 1.7 years in China.

The recovery rate of creditors is also very low–only 25%, compared with 77% in high-income nations. India also ranks poorly in the World Bank’s insolvency ratings, 136th among 189 countries.

One reason for this is the lack of an overarching system for debt recovery; this forces different classes of creditors to pursue their claims through a range of processes.

The failure to achieve swift restructuring has led to extensive erosion of the value of assets in distressed companies which, in some cases, is exacerbated by the controlling shareholders transferring assets out of the business.

The new code promises provisions that are on a par with international best practices. One, being called the waterfall provision, entails that once the assets of a firm are sold, the proceeds will be distributed among the creditors’ in the following order–secured creditors’ dues, wages of employees, dues of unsecured creditors and government dues.

This provision protects the rights of workers in case of insolvency, paying their dues for up to 24 months and is a welcome change as under employees often end up bearing the brunt of long-drawn bankruptcy processes.

Moreover, the code is the first in the history of Indian bankruptcy legislation to attempt to address the issue of cross-border insolvency. This will encourage cross-border financing and unsecured lending.

However, for the code to overhaul one of the slowest insolvency regimes in the world, several operational issues need to be ironed out. For instance, the code has repealed two statutes and amended 11 others, such as the Companies Act, SICA and Sarfaesi.

Thus, it becomes imperative that these legislations are seamlessly synchronised to avoid discrepancies and overlaps in existing laws. Moreover, with the pile of pending cases before the Debt Recovery Tribunals, it will be a long while before the new code would be able to clear the back-log.

The sheer enormity of insolvency cases in the country and the lack of proper infrastructure to support it would be a key challenge.

Successful implementation of the code will also require a huge force of trained and skilled insolvency professionals who can make an accurate assessment of the health and status of the debtor before passing necessary orders.

Training this large pool of people is in itself a daunting task and will require substantial amount of time, resource and expertise

Having said that, the code is definitely a landmark legislation. It promises to provide the country with the muscle and framework for time-bound resolution of delinquent debts.

India now has a bankruptcy and insolvency framework that will go a long way whetting up risk appetites and will propel India further up in the global ease of doing business rankings.

With the nuts and bolts already in place to set the machinery whirring, what is left is to keenly observe the implementation and working of the law.

Aided by a competent risk mitigation mechanism, including rigorous due diligence, stringent fraud investigation and meticulous assessment of books of accounts, this has the potential to transform the health of India’s ailing financial system.

With inputs from Dipti Chawla and Jyoti Bhowmick

The author is leader (risk amp; advisory), BMR Advisors. Views are personal

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Fitch affirms Dunia’s Long Term credit rating at ‘BB’

Posted by admin on 08/28/2016 in Unsecured Lending | Short Link
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dunias credit rating was upgraded in 2015 from lsquo;BB- to lsquo;BB.

As part of their announcement on 28 July 2016, Fitch said dunias current rating reflects the companys exposure to credit risk, inherent within unsecured lending and amplified by the rapid growth of dunias loan book. Fitch added that its latest review takes into account dunias prudent, albeit increasing leverage, and its wide net interest margin.

Fitch also stated that dunias ratings do not factor in any state or institution support. Fitch also stated that as per Central Bank of the UAE regulations, dunia is required to maintain a minimum capital ratio of 15 per cent, while its actual capital adequacy ratio as of December 31st, 2015 stood at a much higher number of 33.11 per cent. The companys debt to tangible equity ratio remains low compared to other financial institutions, which is supportive of dunias IDRs, it added.

Commenting, Rajeev Kakar, CEO and Managing Director of dunia, said, We welcome Fitch affirming our long-term issuer credit rating, following an upgrade last year. This strong rating is a testament to the priority we place on customers, and to serving them uniquely with a customer centric approach. We are committed to investing in building a trusted brand, while investing in the best talent, products, technology and services at dunia. Our approach of ensuring a predictable and stable risk adjusted return helps us maintain a healthy balance sheet and risk profile reflected in our low levels of leverage and high levels of capital adequacy, while delivering strong returns to our shareholders. The success of our approach is evident in this rating, and we are grateful for the opportunity to leverage our achievements to support the local community.

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Peel Hunt reiterated Onesavings Bank (LON:OSB) as ‘Add’ With 270 PT

Posted by admin on 08/28/2016 in Unsecured Lending | Short Link
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OneSavings Bank plc (OSB) is a United Kingdom-based lending and retail savings company. The Company operates through three segments: Buy-to-Let/SME, Residential Mortgages and Personal Loans. The Company provides Buy-to-Let mortgages secured on residential property held for investment purposes by experienced and professional landlords and commercial mortgages secured on commercial and semicommercial properties held for investment purposes or for owner occupation. It also provides residential development finance to small and medium sized developers and secured funding lines to other lenders. The Company lends to owner-occupiers with a geographical bias towards London and the South East. OSB also offers bespoke residential first charge, second charge and shared ownership mortgages through specialist brokers. It also provides secured funding lines to other lenders. The Company also offers unsecured lending services.

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