Lauren's Feed
Jul 27, 2012

U.S. banks bristle at breakup call from Sandy Weill

By Lauren Tara LaCapra, Rick Rothacker and David Henry

(Reuters) – Sandy Weill has a lot of convincing to do.

The former Citigroup Inc CEO, who was in many ways the architect of the “too big to fail” giant bank system, dropped a bombshell on Wall Street on Wednesday by proposing that universal banks should be broken up because they are too big and complex to manage.

But the idea is hardly resonating with top bankers and dealmakers of the past 20 years.

Jul 27, 2012

Insight: Banks bristle at breakup call from Sandy Weill

By Lauren Tara LaCapra, Rick Rothacker and David Henry

(Reuters) – Sandy Weill has a lot of convincing to do.

The former Citigroup Inc CEO, who was in many ways the architect of the “too big to fail” giant bank system, dropped a bombshell on Wall Street on Wednesday by proposing that universal banks should be broken up because they are too big and complex to manage.

But the idea is hardly resonating with top bankers and dealmakers of the past 20 years.

Jul 27, 2012

Banks bristle at breakup call from Sandy Weill

July 27 (Reuters) – Sandy Weill has a lot of convincing to
do.

The former Citigroup Inc CEO, who was in many ways the
architect of the “too big to fail” giant bank system, dropped a
bombshell on Wall Street on Wednesday by proposing that
universal banks should be broken up because they are too big and
complex to manage. [ID: nL2E8IP6F1]

But the idea is hardly resonating with top bankers and
dealmakers of the past 20 years.

Jul 26, 2012

Lazard outlines cost cuts to boost profit with weak outlook

By Lauren Tara LaCapra

(Reuters) – Investment bank Lazard Ltd (LAZ.N: Quote, Profile, Research, Stock Buzz) said it plans to cut costs — including bankers’ pay — as it readies for Europe’s fiscal troubles to weigh on its revenue for months to come.

Lazard said on Thursday that its costs are too high compared with its revenue, a dynamic that halved its second-quarter profit. The New York-based bank aims for cost cuts to boost its operating margin by more than 10 percentage points from current levels, even if business conditions do not improve.

Jul 26, 2012

Dealtalk – Citi could get burned by its sunny brokerage appraisal

NEW YORK (Reuters) – Citigroup Inc’s (C.N: Quote, Profile, Research) $22 billion (14 billion pounds) valuation of its brokerage joint venture with Morgan Stanley (MS.N: Quote, Profile, Research) reflects an extremely optimistic view of the future of Wall Street profits, making a multi-billion-dollar loss on the business more likely for Citi.

Sources familiar with the situation said Citi’s appraisal works out to 50 times current one-year earnings for the joint venture, Morgan Stanley Smith Barney. The long-term average price-to-earnings ratio for retail brokers is only about 18 times.

Jul 26, 2012

Citi could get burned by its sunny brokerage appraisal

NEW YORK (Reuters) – Citigroup Inc’s (C.N: Quote, Profile, Research, Stock Buzz) $22 billion valuation of its brokerage joint venture with Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) reflects an extremely optimistic view of the future of Wall Street profits, making a multi-billion-dollar loss on the business more likely for Citi.

Sources familiar with the situation said Citi’s appraisal works out to 50 times current one-year earnings for the joint venture, Morgan Stanley Smith Barney. The long-term average price-to-earnings ratio for retail brokers is only about 18 times.

Jul 26, 2012

DEALTALK: Citi could get burned by its sunny brokerage appraisal

NEW YORK, July 26 (Reuters) – Citigroup Inc’s $22
billion valuation of its brokerage joint venture with Morgan
Stanley reflects an extremely optimistic view of the
future of Wall Street profits, making a multi-billion-dollar
loss on the business more likely for Citi.

Sources familiar with the situation said Citi’s appraisal
works out to 50 times current one-year earnings for the joint
venture, Morgan Stanley Smith Barney. The long-term average
price-to-earnings ratio for retail brokers is only about 18
times.

Jul 19, 2012

Citigroup, Morgan Stanley far apart on joint-venture value

July 19 (Reuters) – Morgan Stanley reckons the retail
brokerage business it jointly owns with Citigroup Inc is
worth less than half as much as Citigroup believes, Citi said in
a filing on Thursday with the Securities and Exchange
Commission.

Citigroup and Morgan Stanley exchanged appraisals of the
joint venture because Morgan Stanley plans to buy an additional
14 percent share of the brokerage. Morgan Stanley currently owns
51 percent of the business known as Morgan Stanley Smith Barney,
by some measures the largest U.S. retail brokerage.

Jul 19, 2012

Morgan Stanley plans further staff cuts on weak outlook

July 19 (Reuters) – Morgan Stanley became the latest
bank to announce more layoffs to shrink expenses as Wall Street
prepares for an extended period of weak global economic growth
and low trading and dealmaking volumes.

The investment bank, which posted a sharp drop in
second-quarter revenue, expects its payroll to decline by about
another 1,000 workers this year to meet a broader target of
reducing staff levels by 7 percent from December 2011 levels,
Chief Executive James Gorman said on Thursday.

Jul 19, 2012

Exclusive: Ex-Goldman mortgage chief plans foreclosed home fund

NEW YORK (Reuters) – Former Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) executive Donald Mullen, one of the architects of the subprime mortgage trade, is trying to raise at least $500 million for a fund that will buy foreclosed homes with an eye toward renting them out.

Mullen, who until January was head of the credit and mortgage business inside Goldman’s securities division, began marketing his Fundamental REO Access fund in earnest about a month ago, said seven people familiar with the matter, but who did not want to be identified because they do not work for the upstart fund.