UK
Barclays’ interim management statement came out today, and it makes the acquisition of Lehman in the US look like a very good idea indeed.
First quarter profit at Barclays Capital was up 361%, driven by the Lehman US acquisition. This accounted for approximately a third of BarCap’s income and generated a ‘transformational change’ in the business.
This, inevitably, leads us to question why Nomura hasn’t been able to effect a similarly transformational change after buying bits of Lehman’s business in Europe.
To recap, Nomura reported its fifth straight quarterly loss last month, largely due to the costs of integrating the ex-Lehman businesses.
An ex-Lehman banker in Europe points out that the situation here is vert different. “In the US, Barclays took over the business without the attendant liabilities. They inherited a going concern and didn’t have to pay anything for the people that hadn’t already been budgeted,” he says. “It’s a lot harder for Nomura – we only bought pieces of the business and have had to build an entire infrastructure around them.”
Barclays and Lloyds reveal big increase in bad debts (The Times)
Take already-junked monolines out of the equation and Barclays has to take an instant 4.5bn writedown. (Alphaville)
Stress test results: the graphic. (Wall Street Journal)
In combination banks need at least $65bn in new capital; Bank of America needs $34bn, Morgan Stanley needs $1.5bn. (Wall Street Journal)
Stress tests employed lots of people. (Bloomberg)
Bank of America is “very healthy” and will be endeavouring to repay $11bn to the US government ‘over time.’ (New York Times)
It seems to me that BofA is in some weird state of denial here. (Felix Salmon)
Goldman booked $100 million in trading revenue on 34 days during the first 90 days of the year. (DealBook)
SocGen has reduced “front office” staff at the investment bank by 6.8% year on year. (Bloomberg)
Nicola Horlick will collect 7m if forcibly removed from Bramdean. (The Times)
20m compensation for MF Global trader. (Financial Times)
Time to work at Blue Gold Capital management – staff includes two French national swimmers and a former model. (Financial News)
Why Mr.Barclays what a long appendix you have, and its only an interim.
Barcap has been ruthless and quick integrating the businesses it acquired from Lehman which was usually responsible for more than 50% of Lehman’s benefits. It was already strong in most businesses Nomura acquired in Europe apart from cash equities.
Nomura got a lot of smart people from Lehman’s but it’s taking them longer to assimilate the Lehman businesses (a lot of people only started in december). Also they now need to grow in the States where they have minimal presence. It will pay off over time though.
Pushy stupid notoriously arrogant firm merger with conservative intelligent humble Japanese firm not working? Shocking!
For all the hype and promotion of London being the global HQ for Nomura, the reality is that Tokyo is still global HQ for them.
ExLeh is hoping this will change but the japanese way of doing business will dominate this company throughout the world.
Well the main reason it hasn’t worked it because Barcap bought the US business as a whole. Nomura wasn’t quite as smart… it picked off bits. Easier thing would have been for them to take over all of Lehman and then get rid of dead weight.
the reality is that lehman brothers’ franchise in europe was nowhere near as strong as the one in the US; situation got even worse once the european business remained standalone and without the strengths of their US counterparties. The smart people declined the guarantee and moved on to other banks … the ones who are left …