Archive for July, 2012

Legal pitfalls seen in Perpetual sale

One market player says it would be a surprise if anyone bought Perpetual’s trustee business because of potential legal liabilities.

Pyne Gould Corporation said on Monday it had several parties interested in buying all or part of its Perpetual Group business.

Pyne Gould has been under pressure from the Financial Markets Authority (FMA) after Perpetual lent $28 million from its Perpetual Cash Management Fund to related business Torchlight Fund No1 LP.

The money has since been paid back, but legal action is pending on Friday from the cash fund’s statutory supervisor, Trustees Executors.

Market commentator Arthur Lim said he could see potential interest in the wealth management part of Perpetual but not its trustee division.

“I would be very surprised if anyone would buy the trustee side of the business,” he said.

Lim said the trustee business faced brand issues in the wake of the FMA action and there could be future legal liability attached to it.

Bidders for the Perpetual business are believed to include the management of Perpetual headed by chief executive Patrick Middleton.

Yesterday there was also speculation that AMP-owned Spicers Wealth Management could be a potential buyer for the wealth management part of Perpetual.

But an AMP spokesman has said there was no truth in the rumour.

Lim said it was difficult to know how much Perpetual would be worth.

Meanwhile, Perpetual has applied for a licence from the FMA to continue operating as trustee for two KiwiSaver schemes.

Perpetual is trustee for Auckland-based NZ Funds KiwiSaver scheme and Iwi Investor, a KiwiSaver scheme run out of Taupo.

Trustees are presently going through a new licensing regime. All trustees were issued temporary licences under a provisional system and the FMA has until the end of September to grant full licences.

By Tamsyn Parker
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Tuesday, July 31st, 2012 EN No Comments

STREET MOVES: Merrill Lynch Hires Two Barclays Financial Advisers – 4

07/31/2012 | 01:46pm US/Eastern

   By Brett Philbin 
 

Bank of America Corp.’s ( Bank of America Corp) Merrill Lynch Wealth Management unit hired Matt Celenza and Larry DiGioia, a team of high-producing financial advisers, from Barclays PLC’s ( Barclays PLC) U.S. wealth business, who worked just four months at the firm.

On July 6, Mr. Celenza and Mr. DiGioia joined Merrill Lynch in Los Angeles. The two advisers together generated $4.4 million in fees and commissions and managed $789.5 million in client assets.

Other members of the Barclays team who have joined Merrill Lynch include Linda Hayes, Andrea Shieh and Shannon Walker.

Before their short stint at Barclays, Mr. Celenza and Mr. DiGioia worked at Citigroup Inc. (C) for roughly seven years and remained at the Smith Barney brokerage joint venture with Morgan Stanley ( Morgan Stanley) for about three years, according to Financial Industry Regulatory Authority records.

A Barclays spokeswoman declined to comment on the team’s departure.

Last week, Merrill Lynch recruited seven brokers from Morgan Stanley Smith Barney who had a combined $4.6 million in annual production and managed about $560 million in client assets.

(Street Moves chronicles the migration of executives on Wall Street, with a particular emphasis on financial advisers with more than $1 million in annual production and who manage more than $100 million in client assets.)

Write to Brett Philbin at brett.philbin@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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Tuesday, July 31st, 2012 EN No Comments

BCSC Executive Director’s Bulletin: Securities Regulator Issues Notice of … – SYS

VANCOUVER, BRITISH COLUMBIA — (Marketwire) — 07/31/12 — The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a woman licensed to sell life insurance committed fraud.

The notice alleges that Lynne Rae Nickford (a.k.a. Lynne Rae Zlotnik) perpetrated a fraud on investors when she transferred approximately $1.3 million of investor money to her personal account. Nickford is a B.C. resident, and she was licensed to sell life insurance until her license was revoked in April of 2010.

Between January 2009 and March 2010, Nickford raised approximately $2 million from 13 investors by issuing approximately $1.4 million of promissory notes in the name of her company, Lynne Zlotnik Wealth Management. The balance of the funds came from investors who believed they were making loans to, or investing in, LZ Wealth Management. Investors were predominantly women, and most relied on Nickford as their financial advisor.

The notices alleges that Nickford transferred approximately $1.3 million of investor money from her business account to her personal account. She then withdrew these funds from her personal account to pay for her personal expenses, including food, clothing and rent payments. Nickford also withdrew a total of approximately $973,000 in cash from her personal account, using some or all of it to gamble at casinos in the Vancouver area.

These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on September 18, 2012 at 9:00am.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Lynne Rae Nickford, Lynne Rae Zlotnik, Lynne Zlotnik Wealth Management or 2012 BCSECCOM 302 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.

Please visit the Canadian Securities Administrators’ Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).

For media enquiries, contact Richard Gilhooley, media relations, 604-899-6713. For public enquiries, call 604 899 6854 or 1 800 373 6393 (toll free).

Learn how to protect yourself and become a more informed investor at www.investright.org.

Contacts:
British Columbia Securities Commission
Richard Gilhooley
Media Relations
604-899-6713 or (Canada) 1-800-373-6393
www.bcsc.bc.ca

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Tuesday, July 31st, 2012 EN No Comments

Australia’s Big Banks Compete In A Land Grab For The Next Big Cash Cow …

Forget the stock market, corporate mergers, lending or the property market, the next profit cow for banks is superannuation. Banks know this and have dived into a feeding frenzy for market share in the super assets industry.

Brad Cooper, the boss of Westpac’s wealth management arm, BT Financial Group, was quoted in an article to The Sydney Morning Herald on June 21st saying that the management of super assets in the next 20 years will be to banks what mortgage shares was in the past 20 years.

According to Brad Cooper and other finance analysts, the unprecedented profits generated by property owners and banks in the last two decades will suffer as younger workers feel priced out of the housing market and no longer view bricks and mortar as the fail-proof investment their parents raved about. Superannuation, on the other hand, is viewed as a smart, tax-efficient method of saving for retirement.

It is not only young workers who are ripe for the picking. Banks looking for investors are also honing their marketing campaigns on baby boomers who have finished paying their mortgages and are interested in shoring up their retirement funds while they still have an income. If recent figures are anything to go by, baby boomers are going to be an easy sale. According to a report by the Wall Street Journal on The Australian, Boomers have hoarded over $22 billion dollars into their super funds over the past financial year. Why the rush? People who were over 50 were eager to make the most of the $50,000 in concessional contributions allowed by the Australian Taxation Office before the current $25,000 cap was implemented.

However, the management of super assets is not just a consequence of a bad housing market and a government subsidy. It is big business and it is here to stay. According to the BT Financial Group, the management of super assets accounts for $1 trillion now and will be worth more than $6 trillion by 2030. That is huge. It values Australian super assets as the third economic block in the world: between the GDP of China and the GDP of Japan, the second and third largest economies in the world.

One of the main engines behind this growth is the rise of compulsory employer superannuation contributions from 9% to 12%, as from 2013.

To tap into this huge reservoir of profit potential the big banks have invested heavily in fund management companies that specialise in the management of super assets. ANZ entered into a joint venture with uber asset management corporation ING. Westpac paid $1.2 billion for BT and Rothschild Son’s in an aggressive pincer movement to corner the Australian financial management market. The Commonwealth Bank was a pioneer in the financial management sector when it bought Colonial Group for $9 billion in 2000. NAB was only month behind when it also bought a leading financial management company: Lend Lease’s MLC, for $4.5 billion.

According to Chris Appleyard, chief financial adviser for Custom Wealth Solutions, the main sources of profits from super assets for banks are fees and the leveraging of customer assets. Appleyard recommends investors to take an active role into their super funds and choose a self-managed super fund. Although managing your own super fund does come with serious responsibilities and requires a significant investment in time and effort, with a little advice from a qualified financial adviser you can cut the middleman (i.e. big banks) and save yourself a small fortune in fees and commissions.

Custom Wealth Solutions is a leading financial planning firm in Australia, providing comprehensive and holistic financial advice to businesses and individuals in Brisbane, Sydney, Melbourne and the Gold Coast. They specialise in wealth management, insurance needs, superannuation including Self Managed Superannuation Funds, investment strategies, and lending solutions.

If you wish to speak to a Custom Wealth Solutions financial adviser regarding your financial needs, you may call them at 1300 001 297 or you may visit their website http://www.customwealth.com.au/services.

Read the full story at http://www.prweb.com/releases/2012/7/prweb9745950.htm

PRWeb.com

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Monday, July 30th, 2012 EN No Comments

Mora Wealth Management raises Miami profile in new office [The Miami Herald]


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By Ina Paiva Cordle, The Miami Herald

McClatchy-Tribune Information Services

July 30–From his offices high above Miami’s Brickell Avenue, Eli Butnaru oversees Mora Wealth Management’s daily operations while working with clients to help create customized investments for their assets.

Butnaru, chief executive of Mora Wealth Management USA, joined the company last August, prior to opening the Miami office in October.

He brings more than two decades of experience in international banking, having held senior management positions with Citibank, and most recently, leading the Palm Beach and Miami practices of UBS-AG.

We met Butnaru in his offices on the 29th floor of 1450 Brickell, and then he responded via email to these questions:

Q. Mora Wealth Management is relatively new to the Miami scene. Please tell us about the company, its history, ownership, and size, including assets under management.

A. Mora Wealth Management belongs to the MoraBanc group. Founded in 1952, the group has preserved a strong tradition in the field of private banking. Its Andorran shareholding is in the hands of the entity’s founding families.

Professional service, quality and financial strength are the foundations of MoraBanc group, which has about 6.3 billion euros (nearly $8 billion) under management as of December 31, 2011.

Q. Tell me about Andorra. Is it experiencing the same problems as other European economies such as Spain and Greece?

A. While Andorra has not been immune to the plights of its European neighbors, MoraBanc has not suffered, thanks to MoraBanc’s solid investment policy and conservative asset-liability management. As a result of its cautious approach, and anticipating a major economic slump, MoraBanc has proactively managed its balance sheet according to sound and conservative banking principles. MoraBanc sports a very high solvency ratio (29 percent) and liquidity ratio (101.6 percent), as of December 31, 2011

This spring, Moody’s, as it has done for seven consecutive years, reaffirmed MoraBanc’s A2 rating, giving it a “stable” outlook.

And earlier this month, the financial publication, The Banker, part of the Financial Times Ltd., ranked MoraBanc 26th out of 1,000 banks worldwide, in terms of solvency.

Q. Why did you choose to open an office in Miami and how did you pick your site?

A. Europeans and Latin Americans have steadily made Miami the de facto international wealth management center of the West. During the past several decades, Miami has become a preferred destination for those who want to establish a second home. While generally known as a prime vacation spot, Miami has evolved into a fairly advanced cultural and financial center. These facts, combined with the diversity of its population, make Miami a prime hub for establishing Mora Wealth Management’s America operations.

The office site was chosen given the impeccable location and design of the building, the commitment to green standards, and the superior street access. This clean look reflects the seriousness of our endeavor.

Q. It seems that it would be particularly challenging to open a wealth management office during an economic downturn. Why did you choose to open at this time?

A. It is precisely during downturns and tough economic circumstances that Mora Wealth Management can add value. Our disciplined approach to risk management can clearly be demonstrated during challenging times. Risk management is the cornerstone of our asset management philosophy.

Q. How many employees do you have and do you plan to expand here?

A. Mora Wealth Management has 12 employees in the new Miami office. In concert with regulatory entities, Mora Wealth Management would like to expand to 35. This expansion process encompasses compliance and supervisory personnel. Mora Wealth Management’s growth will be in sync with our regulatory entities.

Q. Does Mora Wealth Management also have offices in other countries, and do you plan to open more locations?

A. In addition to our Miami office, we currently have offices in Zurich and Montevideo, Uruguay. We will consider further expansions as we consolidate our presence in our regional hubs.

Q. Please tell me as much as you can about your clients. Do they live here? Do you have a minimum target of investable assets? What is your goal for the office?

A. Our clients are high net worth individuals, family offices, pension funds and endowments. Most of our clients are not U.S. persons and live throughout Latin America and Europe. These clients often visit the United States and tend to have real estate investments, second homes and business interests in the Greater Miami area.

Given our disciplined approach to risk management, our clients have investable assets that start at $1 million. Asset size is important in as much as it enables our firm to search for the best available asset managers who fit our approach.

Our clients have complex multi-jurisdictional situations. These clients have several members of their families living in the U.S. and are therefore subject to multiple tax jurisdictions. The complexity of our clients’ situations compels us to be sensitive and knowledgeable in estate planning and legal matters.

Our office has aggressive growth goals. Mora Wealth Management is prepared to consider acquisitions in addition to our organic growth.

Q. Please tell me about the services you provide to your clients. Do they differ from those offered by other wealth management companies?

A. In the broad sense, most firms offer similar services to ours. The key differentiating factor is our approach to risk management and execution of the strategies. Mora Wealth Management will only employ external asset managers with compelling track records and proven ability to preserve capital. We monitor for strict compliance with our investment policies and make swift decisions when the time arises.

We do not offer, nor have, proprietary products. Thanks to our unique business model, we can strategically partner with the world’s leading wealth management products providers to provide our clients with customized investment solutions tailored to fit their unique needs. Our “open-architecture” approach, combined with our multicultural composition and presence in Europe, Latin America and North America, enable us to source investment opportunities globally and craft investment solutions from an array of products available on the market to offer the most attractive options to our clients. Our clients’ goals are completely aligned to our goals.

We also offer our platform as broker dealers and registered investment advisors for those clients who wish to be self-directed.

___

(c)2012 The Miami Herald

Visit The Miami Herald at www.miamiherald.com

Distributed by MCT Information Services

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Monday, July 30th, 2012 EN No Comments

Fifth Third names Gilbreath wealth management advisor for Western Michigan

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EAST LANSING, MI – Rob Gilbreath has been named wealth management advisor of Fifth Third Bank-Western Michigan. He is responsible for the bank’s Lansing region, including Jackson, Flint, Saginaw and Midland.

Gilbreath earned a bachelor’s degree from Michigan State University, and a juris doctor from Thomas M. Cooley Law School. He has more than 15 years of experience as an attorney, previously working for Lasky, Fifarek Hogan.

He is a member of the American Bar Association, the State Bar of Michigan, Ingham County Bar Association and Greater Lansing Estate Planning Council.

Gilbreath is a Knights of Columbus member, Ingham Regional Healthcare Foundation Planned Giving committee member, Tri-County Office on Aging “Friends for Life” Coordinating Council member, and serves on the board of Haven House and the MSU Alumni Club of Mid-Michigan.

Fifth Third Bancorp is a diversified financial services company with $117 billion in assets, and operates 15 affiliates with 1,318 full-service banking centers.

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Monday, July 30th, 2012 EN No Comments

Noah Holdings is a dividend paying stock growing with China

Noah Holdings Limited (NOAH, quote) is in a position that major Western financial institutions such as Citigroup (C, quote) and JP Morgan (JPM, quote) want to be: servicing the higher net worth community in China.

Based in Shanghai, Noah Holdings is an asset management company that “engages in the distribution of OTC wealth management products to the high net worth population in China.” With a profit margin of 28.48%, Noah Holdings obviously does this very well.

By contrast, JP Morgan has a profit margin of around 19%. The profit margin for Citigroup is 14.27%.

Since it looks like there might be corporate governance concerns cropping up again with Chinese stocks, it should be pointed out that there is a dividend income provided by Noah Holdings. As Jesper Medigan, manager of Asian income funds for the Mathews Group pointed out in an interview with the American Association of Individual Investors, no Chinese company found to be fraudulent was a dividend paying stock. 

Noah Holdings has a 2.79% yield, and the dividend income is provided for by very strong margins. While the profit margin is robust, so is the operating margin at 28.62% and the gross margin at 78.25%. Enhancing the cash flow is a debt-to-equity ratio of 0.00.

A major development earlier this year for Noah Holdings was its approval to distribute mutual funds. For the year, earnings-per-share growth is up 82.57%. This is expected to continue next year at a 33.33% rate. At 0.50, the price-to-earnings growth (PEG) ratio is very bullish. The PEG for Citigroup is 0.84; JP Morgan’s is 1.

China posted a trade surplus of more than $30 billion for the month of June. The country has more than $3 trillion in foreign reserves. While growth is slowing, obviously someone is still making money with signs of recovery in real estate, among other sectors. Based in the People’s Republic, Noah Holdings has an intrinsic advantage over wealth management companies based half-way around the world.

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Sunday, July 29th, 2012 EN No Comments

REITs go up against new muscle

THE move by Colonial First State Global Asset Management to launch a $520 million wholesale property fund highlights two important dynamics in the country’s $279 billion property sector. Wholesale funds are muscling in on listed property trusts and foreign investors are buying Australian property with their ears pinned back.

In Colonial’s case, the wholesale fund was its first in 10 years and like just about every other deal going on in Australian property, foreign investor appetite was strong.

These two important trends came out loud and strong in the 2012 annual report by research house PIR, which found that in the $279 billion listed and unlisted property trust sector, listed property trusts, or REITs, continued to represent half of sector assets under management, equating to $139 billion. But unlisted wholesale funds rose to their highest ever proportion of the sector, roughly 29 per cent, or $82 billion.

At the smaller end of the sector, the various property securities funds and mortgage/debt funds continued to decline as a percentage of the sector.

The overwhelming conclusion is that while most REITs continue to trade at a discount to their net tangible assets (NTA), the shift in interest by big investors to unlisted wholesale funds will continue on the basis that the funds have greater flexibility in sourcing capital than their listed counterparts.

To put it into perspective, REITs and unlisted wholesale funds offer a high-single-digit yield, have acceptable gearing and their cap rates have not materially fallen since the GFC.

The big difference between them is that most listed funds trade at a discount to NTA and that makes it more difficult to fund a deal through new equity compared with recycling assets or borrowing money.

In contrast, the unlisted wholesale market doesn’t have such constraints and has therefore been able to raise equity. The most notable examples include the Canada Pension Plan Investment Board, which recently committed to invest $1 billion in two office-tower developments at Barangaroo in Sydney, with other wholesale investors committing a further $500 million.

Other examples include GPT Wholesale Shopping Centre Fund announcing a $100 million capital raising for July. The implication is that unlisted wholesale funds enjoy a lower cost of equity capital and greater flexibility in sourcing capital than their listed cousins, despite the latter spending the past 18 months buying back their shares.

It raises some interesting questions about REITs and whether they should be parking assets in wholesale funds rather than taking them on their balance sheet. It is a trend Westfield and GPT have started to embrace.

For the past 18 months Australian REITs have been focusing their attention on share buybacks to try to close the gap between their share price and NTA. The sector has spent close to $2 billion on buybacks and is expected to spend a further $2.5 billion in the current round of buybacks.

REITs have spent an estimated $2 billion on acquisitions, compared with $16 billion for foreign investors in joint ventures, unlisted local funds, direct property or taking up strategic positions.

Recent figures from CBRE highlight the sheer magnitude of this trend. In 2010, foreign investors accounted for 19.9 per cent of all deals larger than $5 million. At the time, CBRE noted this was ”almost twice” their usual share of acquisitions. For the same year, REITs clocked in at 23.5 per cent.

In 2011, foreign investors accounted for 30 per cent of all deals larger than $5 million, and 37 per cent of all deals larger than $20 million – the highest level in almost 20 years. By comparison, local superannuation funds, wholesale funds, and unlisted trusts accounted for a combined 21 per cent.

For the March 2012 quarter, foreign investors accounted for 27 per cent of deals above $5 million and 43 per cent of all deals above $20 million, which was far ahead of the 26 per cent of deals attributed to local wholesale funds and 20 per cent from local private investors.

It is a trend that is starting to worry some institutional investors, concerned that REITs are missing out on some of the best properties in capital cities.

Interestingly, REITs have outperformed the overall stockmarket over the the past 12 months, with the ASX 300 REITs index up 4.86 per cent for the financial year, compared with an 11.07 per cent slump in the SP/ASX 300 index over the same period.

It seems that the sector has well and truly bounced back since the GFC, which dragged Australian investors in the listed and unlisted property sector to hell and back, with property values plummeting, debt levels ballooning, returns crashing and, in the case of listed property trusts, share prices falling up to 80 per cent.

PIR supports the view, with leverage now down to 26 per cent, and most categories of property well on the way to sorting out a massive mess of over-engineering of their balance sheets, which got them into serious trouble with their banks.

”Deleveraged balance sheets, better capital management and a focus on operational efficiencies (reducing vacancy rates and management expenses, while incrementally boosting income) all increase our confidence in the sector as a reasonably secure long-term investment,” the report concludes.

JPMorgan property analyst Richard Jones recently described the growth of the unlisted wholesale sector as explosive, partly benefiting from an inflow of foreign capital.

The trend is on, but if the gap between NTA and the share price of REITs continues to close, then it could further open up the sector. As PIR says: ”We live not only in a post-GFC world, but a world weighed down by a forthcoming demographic tide. Meeting these obligations will demand long-term returns in excess of the paltry yields on government debt.”

aferguson@fairfaxmedia.com.au

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Sunday, July 29th, 2012 EN No Comments

HSBC Bank Malta plc half-yearly results for 2012

All the three main business lines, Retail Banking and Wealth Management, Commercial Banking and Global Banking and Markets, contributed positively to the bank’s overall performance.

Net interest income increased by 5% to Ђ68m compared with Ђ64m in the first half of 2011. The increase reflected growth in mortgage lending and improved positioning of the balance sheet management available-for-sale portfolio.

Net fee and commission income of Ђ16m for the six months ended 30 June 2012 compared with Ђ17m in June 2011. Growth in funds under administration and higher levels of custody fees more than off-set lower card fees following the sale of the merchant card acquiring business in December 2011.

HSBC Life Assurance (Malta) Ltd reported a profit before tax of Ђ7m compared with Ђ13m in the first half of 2011. The first half of 2011 benefitted from a non-recurring gain of Ђ7m as a result of the refinement in the methodology used to calculate the present value of in-force long-term insurance business. New business particularly with respect to life-insurance protection and higher investment income as a result of improved global market conditions partially offset this non-recurring gain.

A net gain of Ђ2m was reported on the disposal of available-for-sale securities compared to a net loss of Ђ4m in the comparable period in 2011.

Operating expenses at Ђ45m increased by Ђ3m or 6%, impacted by the non-recurring staff cost recoveries in the first half of 2011 of Ђ2m, mainly relating to the release of an early voluntary retirement provision. On a like-for-like basis, costs were well controlled and broadly in line with the first half of 2011 with the increase in amortisation due to the impact of the implementation of a new banking and accounting system introduced during December 2011. Cost efficiency ratio reported at 45.4% compared with 43.8% in the prior period.

At a consolidated level, net impairments reduced from Ђ4m to Ђ0.8m in 2012. This was principally due to a Ђ2m impairment taken on Greek government bonds held by the life insurance subsidiary in its available-for-sale bond portfolio in 2011. Following the Greek bonds restructuring programme, the life insurance subsidiary sold its Greek debt exposure and holds no other Southern European country government debt.
Loan impairments declined to Ђ0.8m (five basis points of the overall loans book) compared with Ђ1.8m in 2011 as the profit or loss benefitted from modest recoveries. At a bank level, non-performing loans remained stable at 5% of gross loans and asset quality remains good.

Net loans and advances to customers increased marginally by Ђ20m to Ђ3,364m. Mortgage market share remained stable. The bank has seen a slight softening in loan demand due to slowing economic conditions. Gross new lending to customers amounted to Ђ274m which reflects the bank’s continued support to the local economy.

Customer deposits rose by Ђ257m to Ђ4,660m as at 30 June 2012 reflecting an increase in corporate and institutional deposits. The levels of retail deposits were broadly unchanged despite significant competitive pressure for deposits including from local government bond issuance.

The bank’s available-for-sale investments portfolio remains well diversified and conservative.

The bank’s liquidity position remains strong with advances to deposits ratio of 72%, compared with 76% at 31 December 2011.

The bank continued to strengthen its capital ratio to 11.8%. This exceeds the 8% minimum regulatory capital requirement. The bank intends to maintain a conservative approach to capital and will continue to build capital where appropriate.

Mark Watkinson, Director and Chief Executive Officer of HSBC Malta, said: “We have delivered another positive set of results that saw pre-tax profit increase by 6% with a return on equity of 17.8%. The bank’s capital and liquidity position remain strong and we have a firm grip on risks and costs at a time when we are seeing continuing pressure on revenue as a result of the challenges in the eurozone.

“Despite the difficulties in Europe we have a clear strategy focused around simplifying our business, reducing bureaucracy and improving efficiency. As part of the world’s largest international bank we are well placed to service the needs of our customers and to support the local economy.

“I would like to take this opportunity to thank our staff, directors and shareholders for their commitment, hard work and support during the first half of 2012.”

The board is declaring an interim gross dividend of 10.0 cent per share (6.5 cent net of tax). This will be paid on 22 August 2012 to shareholders who are on the bank’s register of shareholders at 8 August 2012.

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Sunday, July 29th, 2012 EN No Comments

FTSE 100 news summary: Lloyds, Barclays, Hammerson, Centrica, Aberdeen …

This week, FTSE 100 banking groups Lloyds (LON:LLOY) and Barclays (LON:BARC) released their interim results.

Lloyds has increased its payment protection insurance (PPI) provision by a further £700 million in the second quarter, resulting in an interim loss of £439 million.

The provision takes the total charge for mis-selling PPI to £4.3 billion.

On an adjusted basis, Lloyds saw its profits climb by £715 million from a year earlier to £1.06 billion.

In addition, the partly-nationalised bank said parts of the group had received subpoenas and requests for information from government agencies relating to the Libor rate rigging scandal and were co-operating with their investigations.

The interim report from Barclays was ahead of forecasts.

The figures showed that adjusted pre-tax profits climbed 13 percent to £4.23 billion with improvements of 15 percent in retail and business banking (RBB), 11 percent in corporate and investment banking and 38 percent in wealth and investment management.

Expectations were for profits of just below £4 billion.

Statutory pre-tax profits tumbled 71 percent to £759 million as a result of the write-down of own credit of nearly £3 billion and fines of £290 million for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other.

Earlier this month, chief executive Bob Diamond and chief operating officer Jerry del Missier quit in the wake of the scandal.

Chairman Marcus Agius also handed in his resignation, but later agreed to stay on board to help the bank find a replacement for Diamond.

“We continue to deliver a good financial performance in the context of the current macroeconomic environment,” said Agius.

“Our competitive position continues to grow and our financial strength is serving us well in this period of uncertainty and volatility.

“These remain challenging times for Barclays, as well as the industry, and we are sorry for what has happened because of recent events.”

Other blue chips that reported their half-yearly results this week included British American Tobacco (LON:BATS) and commercial property group Hammerson (LON:HMSO).

British American Tobacco reported increased profits in the first half of the year despite lower sales in Southern and Western Europe.

Overall in the six months ended June, underlying profit from operations increased three per cent to £2.8 billion.

The firm, which makes cigarette brands such as Lucky Strike and Dunhill reported revenue of £7.4 billion in the half, as sales in developing markets helped offset tough conditions in the European markets.

Cigarette market volumes in Spain, Italy and Greece were down 10 per cent as customers cut back on cigarettes.

Meanwhile, Hammerson reported that earnings per share for the first six months of the year rose 6.3 percent from a year earlier to 10.2 pence despite a 1.6 percent decline in net rental income to £141.6 million.

During the period, group retail occupancy reached 97.5 percent, above the group’s target of 97 percent.

“Our strong income focus and strategic positioning are delivering good financial performance and dividend growth against a difficult consumer backdrop,” said chief executive of Hammerson David Atkins.

“We expect to deliver further growth to shareholders by building scale in our chosen retail sectors through extensions, developments and acquisitions.”

Centrica (LON:CNA) saw profits warm up as Britons were forced to turn up their heating during an unusually cold period between April and June.

The company’s residential energy arm, British Gas, which is the UK’s biggest energy supplier with 15.8 million customers, was the star performer thanks largely to recent price hikes.

British Gas boosted operating profit in the first six months of 2012 by 23 per cent to £345 million, which helped Centrica’s total profits rise 18 per cent to £737 million (2011: £625 mln), while residential energy revenues climbed 17 per cent to £4.8 billion compared with the same period last year.

However, the company warned investors not to expect the same increase in profits in the second half as it saw last year.

In other news in the top flight, pharmaceutical giant AstraZeneca (LON:AZN) remains on track to hit its full year targets despite seeing its pre-tax profits tumble nearly 40 percent in the second quarter.

The pharmaceutical giant said that the expiration of some of its patents led to a 21 percent drop in revenues to US$6.66 billion in the June quarter, while pre-tax profits dropped to US$1.76 billion from US$2.86 billion a year earlier.

For the first six months of the year, the group posted revenues of US$14 billion and profits of US$3.8 billion, down 16 percent and 38 percent respectively.

Aberdeen Asset Management (LON:ADN) said it has assets under management of £182.7 million at the end of June. During the June quarter, the company secured £8.8 billion of new business, taking the total for the nine month period to June 30 to £27 billion.

“This has been another successful quarter for Aberdeen, despite the global economic uncertainties and subdued conditions in the world’s financial markets,” said chief executive of Aberdeen Martin Gilbert.

In the meantime, Fashion house Burberry (LON:BRBY) told investors that it is no longer in talks over the termination of its licence agreement with Interparfums SA.

Earlier this month, Burberry decided to end the agreement with Interparfums, the exclusive worldwide licensee for its fragrance and beauty products, to “maintain flexibility in pursuing its objective to develop fully this business in the future”.

Upon termination, which will take effect at the end of the year, Burberry will pay Interparfums €181 million in cash.

The two companies had been in talks regarding the potential establishment of a new operating model for the Burberry fragrance and beauty business.

Water group United Utilities (LON:UU.) reported that it has been trading in line with forecasts and expects to meet its targets over the 2010-15 regulatory period.

“We have reported another good set of results in a tough economic climate and have delivered significant improvements in customer satisfaction. We are also confident that we can improve further,” said chairman of United Utilities John McAdam.

The group proposed a final dividend of 21.34 pence per share, taking the total dividend for the year to 32.01 pence.

In the mining sector, Anglo American (LON:AAL) reported that despite a strong operational performance, profits fell sharply in the first half of the year due to higher production costs and “markedly weaker” commodity prices.

Pre-tax profits plummeted 55 percent to US$2.94 billion and earnings before interest, tax, depreciation and amortisation fell 31 percent to US$4.94 billion as revenues declined 10 percent to US$16.41 billion.

Despite the sharp drop in profits, Anglo decided to raise its interim dividend by 14 percent to 32 US cents per share, saying that it is “committed to returning cash to shareholders”.

“Alongside continuing structural problems in the euro zone, economic growth has slowed in the US and major emerging economies, such as China, India and Brazil, albeit from high levels,” said chief executive of Anglo American Cynthia Carroll.

In oil and gas, BG (LON:BG.) confirmed this week it would take a US$1.3 bln write-down on its shale gas assets due to the glut that has sent US gas prices tumbling.

Underlying earnings of $1.07 billion in the three months to June also missed forecasts, though the UK group was upbeat over the longer term prospects for its key developments in Brazil and Australia.

BG shares have been hit by worries the two projects, especially Brazil, could be affected by cost overruns but chief executive Frank Chapman said recent developments had affirmed its capital cost forecast in Brazil and that its net share of production would reach 600,000 barrels daily by 2020.

In the US, BG said it would focus on exporting liquid gas (LNG) because of the weak domestic gas price.

The group added LNG profits this year would also be at the top end of its US$2.6 bln to US$2.8 bln forecast range due to strong demand from the Far East.

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