Thursday, May 31, 2007
Wednesday, May 30, 2007
Thursday, May 3, 2007
National City buys Chicago bank for $1.9B
May 2, 2007, 21:00 GMT
CLARENDON HILLS, IL, United States (UPI) -- Cleveland`s National City Corp. plans to become Chicago`s fourth-biggest bank by buying the parent of MidAmerica Bank for $1.9 billion, National City said.
National City, with $140 billion in assets, said it would pay $56 a share for MAF Bancorp Inc., whose assets are $11.1 billion.
MidAmerica, based in suburban Clarendon Hills, Ill., had tried to grow beyond retail banking and home loans, but decided a merger would better serve its purpose, MAF Chairman and Chief Executive Allen Koranda told The Chicago Tribune.
'We`ve been working hard over the past five years to build capacity as a business banking lender, and we`ve made good progress, but we still had a long way to go to get into areas like credit cards, wealth management and small-business lending,' he said.
The purchase is the second in Chicago banking in a week.
Bank of America Corp. last week agreed to buy Chicago`s LaSalle Bank for $21 billion from Dutch parent ABN Amro Holding NV, although that deal may be derailed.
After the MAF acquisition, set to close in the fourth quarter, National City will have more than 1,400 branches in the Midwest and Florida.
Source : http://news.monstersandcritics.com/business/news/article_1299473.php/National_City_buys_Chicago_bank_for_$1.9B
Venezuela to repay debt post-IMF, World Bank
Venezuelan finance minister reassures foreign bondholders before country breaks with international lenders.
QUITO, Ecuador (Reuters) -- Venezuela Thursday reiterated it plan to leave the International Monetary Fund and the World Bank, despite investor concerns over a possible technical debt default the withdrawal may trigger.
Venezuelan Finance Minister Rodrigo Cabezas told Reuters in Quito, Ecuador, that he was confident bondholders would not ask for a swift debt payback and said Venezuela would honor all its foreign obligations despite separating from the lenders.
We don't believe that there will be any circumstances that will take us to an acceleration of payments," Cabezas said after a regional meeting of finance ministers.
"There is no possibility that Venezuela will stop paying its foreign obligations," he said.
Venezuelan President Hugo Chávez, who has promised to implement a socialist revolution to counter U.S. influence, this week said he would pull out of the World Bank and IMF, which he blasts as pawns of U.S. imperialism.
The left-wing leader, a former soldier, on Thursday repeated that his country did not need the IMF as he seeks to create an alternative banking cooperation program with like-minded allies in the region.
"The decision of the president has already been announced about the withdrawal from these two multilateral bodies who belong to the capitalism of old," Cabezas said.
But Chávez's government has sought to ease investor jitters that the planned withdrawal could force a technical default as Wall Street banks urge clients to reduce their exposure to Venezuela's sovereign debt.
Clauses covering sovereign deals mean Venezuela's bonds would be in default should it leave the IMF, allowing investors to demand the government pay them back immediately. Cabezas has not said when the withdrawal would take place.
Cabezas declined to specify under what terms Venezuela will pull out of the IMF and if it will keep its membership.
Finance ministers meeting in Quito said a clear blueprint for the creation of a South American multilateral lender named Bank of the South could be announced in late June.
Venezuela hopes a new multilateral institution would substitute for the World Bank and IMF as a source of credit for poor Latin American countries. Brazil also reiterated interest in the bank.
Ecuadorean President Rafael Correa, a leftist and close ally of Chávez, in April expelled the World Bank representative in Quito and has paid off the country's debt with the IMF.
Chávez often berates the multilateral lenders for promoting the U.S.-backed free market system, which he blames for Latin America's high rates of poverty. Allied with Communist Cuba and bolstered by high oil prices, he says he wants to promote regional integration to counter capitalist ideas.
Source : http://money.cnn.com/2007/05/03/news/international/bc.venezuela.imf.reut/?postversion=2007050318
Bank of America suggests it will fight for LaSalle after court freezes sale
Published: May 3, 2007
CHARLOTTE, North Carolina: Eager to fill one of the few holes in its coast-to-coast business, Bank of America Corp. hinted Thursday it is not likely to back down without a fight after a Dutch court blocked its purchase of LaSalle Bank Corp.
"We have a binding contract and intend to take all necessary steps to protect our legal rights," said spokesman Scott Silvestri, a few hours after a court in the Netherlands ruled ABN Amro, that country's largest bank, must receive the approval of shareholders before completing the $21 billion (€15.43 billion) cash deal.
But such determination might not matter. The bank's deal for LaSalle is one piece of a much larger transaction, in which Britain's Barclays PLC would buy the rest of ABN Amro's assets for $91 billion (€66.85 billion). Thursday's ruling appears to increase the chances a rival $98.5 billion (€72.36 billion) offer for ABN from a three-bank consortium, led by Royal Bank of Scotland PLC, will win out.
"The Dutch court's decision seems to keep the sale of LaSalle linked to the bidding process for ABN Amro," wrote CreditSights analyst David Hendler in a research note. "As a result, we think the decision tips the 'jump ball' for ABN in favor of the Royal Bank of Scotland consortium."
Silvestri said the bank would not have any further comment beyond his statement. Investors in Bank of America appeared indifferent to the news, pushing Bank of America shares up 22 cents to $51.23 (€37.63) on Thursday.
LaSalle, which has $113 billion (€83.01 billion) in total assets and is one of the top 20 banks in the U.S., has long been coveted by Bank of America chairman and chief executive Ken Lewis for its large share of customers in the Chicago area, the nation's third largest financial services market.
In the last four years, Bank of America has increased its retail presence in Chicago from a single financial center to 56 locations. But when combined with LaSalle's 141 Chicago area offices, Bank of America would have more than 14 percent of the deposit market share in Chicago and move past JPMorgan Chase & Co. to become the largest bank in the area.
"There isn't another American bank that is positioned to get as much value out of LaSalle as Bank of America," said Tony Plath, an associate professor of finance at the University of North Carolina at Charlotte.
The deal would also expand Bank of America's presence in Michigan, where the bank had only 25 ATMs and not a single branch office at the end of 2006, further extending the reach of the nation's second largest bank by assets into the upper Midwest — one of the few areas in the U.S. where the company isn't entrenched.
Under the original deal, ABN Amro is allowed to entertain a higher offer for LaSalle until Sunday. ABN Amro has also provided a "go shop" clause, which gives Bank of America five business days to match a higher offer. Should ABN accept another offer, Bank of America gets a $200 million (€146.92 million) breakup fee.
Bank of America could potentially raise its bid for LaSalle, and other bids could surface for all or parts of ABN Amro. But, Hendler said in his research note, "our sense is that BofA will wait for the next move by RBS & Co. before deciding its next steps."
Either way, Plath said it would be foolish to think Bank of America — a company built on a series of blockbuster mergers and acquisitions — wouldn't continue its efforts to expand. Lewis has expressed an interest in Chicago for months, taking care to note the strength of LaSalle in speeches and conference presentations.
"Even if they lose LaSalle, they are not going to lick their wounds and go back to Charlotte," Plath said. "They are already in Chicago and they will find other means to grow there. You can build a hell of a lot of branches with $21 billion (€15.43 billion)."
Bank of America Corp.: http://www.bankofamerica.com
Source : http://www.iht.com/articles/ap/2007/05/03/business/NA-FIN-US-Bank-of-America-LaSalle.php
Wolfowitz rebuts critics over tempest at World Bank
Paul Wolfowitz, right, president of the World Bank, was repeatedly asked about the scandal at the bank while attending a conference on education for the poor. With him were Louis Michel, center, the European aid commissioner, and Gordon Brown, Britain's chancellor of the exchequer. May 3, 2007
WASHINGTON: In a new rebuttal to charges that he violated ethics rules at the World Bank, Paul Wolfowitz said Thursday that he had helped arrange a generous pay and promotion package for his companion soon after he became bank president in 2005 as "a settlement of her potential claims" if she sued for being relocated against her will.
Wolfowitz's new explanation of his motives came in a 10-page letter to the bank committee investigating him for ethical misconduct for awarding the salary increase and promotions to his companion, Shaha Ali Riza, when he arrived at the bank.
The statement shows that Wolfowitz is making more of an effort to explain his motives and disprove the charge of favoritism as the pressure for him to resign grows. Wolfowitz had earlier indicated that he was concerned about her suing, but the new letter on Thursday was the most extensive and specific argument he has presented.
He submitted the statement as a rebuttal to public testimony earlier this week by two former bank officials who charged, contrary to Wolfowitz's recollections, that they had not approved Riza's salary arrangement.
One of the officials, Roberto Dañino, a former general counsel, said he had heard from Wolfowitz that Riza deserved compensation for being transferred to the State Department against her will because she could have sued the bank. Though he agreed she should be compensated, he said she had no standing to sue.
That contention was disputed by Wolfowitz in his rebuttal on Thursday. He stated: "You have asked me whether Riza could have sued the bank. She could have."
He said she had recourse to use a bank administrative tribunal to obtain "substantial relief, regardless of the immunity of the World Bank in U.S. courts."
In presenting this argument, Wolfowitz opened a window into the relationship with his companion, who had been at the bank for seven years when he arrived. When she worked at the World Bank, he was deputy defense secretary, and the two shared an interest in spreading democracy in the Middle East, especially Iraq.
Because of their friendship, Wolfowitz testified that Riza, a British citizen of Arab descent, initially rejected the ruling of ethics officials that she had to leave the bank once he arrived. Wolfowitz at first tried to keep her and to maintain occasional professional contact, but Dañino rebuffed him.
All sides agree that he then tried to recuse himself from the arrangements for her transfer and compensation but that the top ethics official on the bank board, Ad Melkert, ruled that it was up to him to arrange her compensation package.
Melkert testified this week that he did not mean to give Wolfowitz permission to engineer such a large package. He said that both he and Xavier Coll, the human resources vice president, felt he had violated the rules by arranging for such a large package himself.
Wolfowitz, who is fighting to avert a committee conclusion that he had violated a ban on conflicts of interest, suggested in his letter on Thursday that he had no choice but to make it a generous package given Riza's unhappiness and the fact that she had hired lawyers to fight the move.
He also repeated his contention that everything he did was authorized by top bank officials and subsequently known to them when they took no action in early 2006.
"The terms and conditions of Riza's relocation were the only practical, achievable resolution, and I had reason to believe that they were known or available to the committee," Wolfowitz said, referring to the ethics officials on the bank's board.
The worst thing he was guilty of, Wolfowitz added, was a misunderstanding.
The committee to which Wolfowitz addressed his letter consists of seven members, out of the 24-member bank board, headed by Herman Wijffels, a former development official.
The panel on Thursday was still drafting its conclusions about Wolfowitz's conduct, bank officials said.
The committee's plan is to finish its draft by the end of Friday and to give Wolfowitz until Tuesday to submit a written response. The full 24-member bank board plans to deliberate Tuesday and make its views known Wednesday.
Source : http://www.iht.com/articles/2007/05/04/america/04wolfowitz-web.php
