Who said banks are a bad bet? Not investors in Citi. Bear Stearns bankers started receiving letters about their fate. Merv told banks not to be scared.
Citigroup begged for more cash to bolster its balance sheet, and raised $1.5bn more than expected, taking its total capital raising so far to $40bn.
Pessimists said the new cash calls suggest the credit crisis still has far to run.
Mervyn King said bonuses are the spawn of the devil and banks should start lending again because they’re too pessimistic about asset prices. The Bank of England’s full stability report can be seen here.
Meanwhile, the Fed cut rates again.
HBOS joined the money raising spree: it plans a 4bn rights issue in May.
Deutsche Bank posted its first loss in five years. Revenue in the corporate and investment bank fell 77%.
M&A had some exciting moments. Mars bought Wrigleys, with JPMorgan and Goldman getting the fees. Microsoft took a step closer towards going hostile on Yahoo. But the Wall Street Journal said the M&A recession continued in April. And Merrill got rid of ‘a talented M&A banker’.
Sovereign wealth funds probably got bigger. According to a new report they’ve grown at a rate of 24% annually for the past few years. The Government of Singapore Investment Corporation indicated that it might invest more cash in banks, despite having already squandered billions on Citigroup and UBS.
Bank stocks showed signs of life. UBS, RBS, BNP Paribas and Mizuho all made gains, possibly due to the magic of the central banks.
Desperate bankers who’ve hit difficult times could always take up a trade. There’s a severe shortage of plumbers and electricians in Kensington and Chelsea. The cost of parking in the bankers’ borough is partly to blame, meaning anyone with a resident’s permit will have a headstart.