Header Ad Module

Collapse

Announcement

Collapse
No announcement yet.

British banks losing $80m a day

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • British banks losing $80m a day

    British banks losing $80m a day
    5:00AM Saturday November 17, 2007

    Two of Britain's biggest banks this week lost US$6 billion ($8 billion) due to their exposure to the US housing crisis and related credit crunch, soothing fears of even bigger losses but failing to dispel worries among investors.

    The writedowns unveiled by HSBC and Barclays mean that together they have lost about US$60 million ($79.5 million) a day in recent months.

    For HSBC, the problem is mainly on US home loans that have turned sour. Barclays' exposure is on more complex products based on US mortgages, notably collateralised debt obligations (CDOs). But for both the worry is that more losses could come as it remains impossible to predict when the credit environment for consumers and corporates will recover.

    "The message that we've heard from both of them is things could still get worse, there could still be other things to come in 2008," said Colin Morton, fund manager at Rensburg Fund Management.

    "Barclays is probably as good as we could have expected, we've got a good idea of their position and what they've written off, but some people are still worried there could be more writedowns to come." Britain's banks have been battered over the past four months, as worries mount they have been caught up in the crisis in the US subprime housing market. The UK bank sector is down 13 per cent since the start of August, compared to a flat FTSE 100 index. Barclays and Royal Bank of Scotland have borne the brunt of the sell-off as they are more active in capital markets.

    Barclays responded on Thursday with a surprise trading update for its investment bank arm, Barclays Capital, unveiling a £1.3 billion ($3.61 billion) writedown for the third quarter and October. "Barclays hopes it has written off as much as it needs to," Rensburg's Morton said, "but whether the market is in the mood to accept that it's all behind us is very debatable."

    - Reuters

    http://www.nzherald.co.nz/section/3/...ectid=10476559
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx
Working...
X