Exclusive outtakes from industry leaders
Hussain al-Qemzi, Noor Islamic Bank chief executive, tells Reuters Islamic Finance summit that Islamic banks are now part and parcel of the global banking industry. Qemzi is seeking to expand his United Arab Emirates-based bank to become the world’s largest Islamic bank in five years.
Asif Mumtaz, regional head of HSBC’s Islamic finance arm HSBC Amanah, called for more innovation to move Islamic banking further towards the industry’s mainstream. Mumtaz told a Reuters Islamic Finance summit in Dubai that there remained plenty to do in the areas of regulation and human development.
Sovereign Bancorp apparently got some angry phone calls on Wednesday after its CEO told the Reuters Finance Summit that the thrift was in talks with Dunkin’ Donuts to put its ATM machines in some of its franchises.
Asked whether Sovereign would consider doing an ATM deal with Dunkin’, Chief Executive Joseph Campanelli said:
Sudden cancellations of speaking engagements by CEOs can often raise red or other kinds of flags for investors. In the good times it may mean there is a big deal in the offing, perhaps even a takeover of the company. In the bad times, it may mean that the executive is about to be canned. Last week’s decision by Chuck Prince to cancel a speech he was due to give to the U.S.-Japan Business Conference on Sunday was seen by many as additional confirmation that he was on the way out as Citigroup’s CEO.
Sometimes, it may be an indication that there is bad financial news about to hit. This may have been the case this week when we got several eleventh-hour cancellations from the Reuters Finance Summit, which just wrapped up on Thursday.
Tanya Azarchs, managing director at Standard & Poor’s Financial Services Group, is mostly sanguine on U.S. banks and brokers from a credit standpoint. She told the Reuters Finance Summit that their ratings are expected to hold at current levels through the worsening downturn in the credit cycle.
But Azarchs also warns that the credit market climate, which had shown signs of improvement, seems to be worsening again, especially with regards to subprime mortgage related assets. (She argues that for leveraged loans on the other hand, things actually are improving that that some banks could end up seeing some upside from the markdowns they made on their hung loans at the end of the third quarter.)
Sovereign Bancorp CEO Joseph Campanelli says he’s in no hurry to follow in the footsteps of his predecessor Jay Sidhu, who transformed what was once a $400 million Pennsylvania thrift into a regional bank with $82 billion in assets and branches stretching from Maryland to Boston. Sidhu’s acquisition binge did little for the bank’s share price and he was forced to resign in October 2006.
Since taking over the top job at Sovereign, Campanelli has taken a number of steps to revive the bank, but shareholders have yet to take notice as the credit crunch pressures shares of banks and thrifts industrywide. As Campanelli spoke at the Reuters Finance Summit shares slumped to a 5-year low.
Jeffrey Werbalowsky, co-CEO of middle market investment bank Houlihan Lokey Howard & Zukin, admits to indulging in a touch of schadenfreude at the recent woes of his much larger rivals who coined money during the M&A boom. But the gains from the credit crunch for Houlihan are more than psychological.
Simply put, talent is getting cheaper now as the private equity firms and investment banks who used to compete with Houlihan sharply curtail hiring of the “best and brightest” graduating from the nation’s top universities .
Bank of New York Mellon CEO Robert Kelly is guardedly optimistic about the credit crunch which big banks like Citigroup and Merrill Lynch have been struggling with in recent weeks. But he admits that the markets are going through a tense moment.
“It’s fear versus greed and fear is winning right now,” Kelly told the Reuters Finance Summit.
Todd Thomson, the former CFO and head of wealth management at Citigroup, said his relationship with the Money Honey?, CNBCs news anchor Maria Bartiromo, was not only entirely appropriate but had been a terrific asset? to his business at Citi.
Thomson left Citigroup in January amid allegations that he had been spending lavishly, including his decision to fly Bartiromo on a Citi corporate jet from an event in Beijing to New York.
When Todd Thomson, Citigroup‘s former head of wealth management, lost his job earlier this year, there were reports that he was being punished for lavish spending. Offered as evidence by his detractors was an office — which some wags dubbed the Todd Mahal – reportedly featuring a wood-burning fireplace and a fishtank.
Thomson, who now runs private equity fund Headwaters Capital, told the Reuters Finance Summit that the wood burning fireplace story was flat-out wrong.