Another credit hit

August 12, 2008

JPMorgan ChaseThe latest in ten-digit red ink has landed, this time from JPMorgan, which said in a regulatory filing late on Monday that it had lost about $1.5 billion since July. It cited the usual culprits: turmoil in the credit and mortgage markets and wider credit spreads and lower levels of liquidity. JPMorgan’s shares were down more than 4 percent at the open. JPMorgan has written down a total of about $33 billion, and total write-downs since the credit crunch started have been about $341 billion.

Mitsubishi UFJ Financial Group, Japan’s largest bank, said it would bid $3 billion to buy the remaining 35 percent of California’s UnionBanCal, as it looks for growth beyond its softening home market. The purchase represents a significant bet by Mitsubishi UFJ, which is looking to increase its presence in the United States even as the world’s largest economy continues to stumble through the subprime mortgage crisis. Saddled with slow economic growth and a declining population at home, Japanese financials, which have avoided much of the subprime meltdown, are increasingly aiming to boost their small market shares in the West.

Other deals of the day:

* Italy’s Enel said it had bought 10 percent of PT Bayan Resources Tbk for about 138 million euros ($205.5 million) by taking part in the Indonesian coal miner’s initial public offering.

* Adecco said it wants a friendly takeover of British peer Michael Page as the world’s largest staffing firm posted a better-than-expected quarterly net profit and strong margins despite tough economies.

* Singapore steel products maker HG Metal plans to gain control of local rival BRC Asia from the UK’s Acertec, in a deal worth as much as S$100 million ($71 million), sources said.

* The brokerage arm of BNP Paribas, the largest listed French bank, is close to finalizing the acquisition of a Russian brokerage, Pierre Rousseau, chief executive of BNP Securities Asia, told reporters.

** One of the biggest shareholders in Spain’s Reyal Urbis has sold more than half its stake in the property group to Reyal’s chairman and the company itself, stock exchange records showed.

* HSBC Holdings has submitted an updated application to acquire a 51 percent stake in Korea Exchange Bank, South Korea’s Financial Services Commission said.

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