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March 2006

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  • International cash management meets the global challenge
  • Bank of America gets the edge with its acquisition of Financial Labs.
  • Grupo Santander is often considered to be among the sharpest of borrowers, and it certainly has one of the biggest profiles. José Antonio Soler, who has run its funding operation for a year and a half, talks to Alex Chambers about the group’s quest for new pools of capital and its developing issuance strategy.
  • Brazil’s biggest private sector bank has announced the creation of a new subsidiary, Bradesco Investment Bank. This will focus on all aspects of the local and international capital markets business as well as asset management. Bradesco is a retail powerhouse but the bank’s CEO, Marcio Cypriano, is keen to take advantage of growing capital markets activity from Brazilian entities. Cypriano told Euromoney last year: “In general, we should be bigger and better in capital markets. That business should closely match Bradesco’s retail performance.” [See Euromoney December 2005, “Bradesco's plan of attack”.]
  • With the notable exception of Deutsche Bank, German investment banks’ performance has lagged their French peers for most of the decade. But the German sector is picking up on new market possibilities, with Commerzbank in particular looking to rebuild its business after a dramatic recovery. Philip Moore reports.
  • The Swiss bank is making determined efforts to grow its US private banking business.
  • Goldman Sachs might still be the firm to beat when it comes to global M&A but it has just lost the chairman of its European investment banking business, Claudio Costamagna, who will leave this month after 17 years at the firm.
  • Increasing regulatory costs for hedge fund managers are leading large players to make a U-turn and look to outsource back-office functions, says Tom Kerns, global head of client reporting and product integration at Deutsche Bank Global Prime Services.
  • It’s not easy to see, but behind the trillions of dollars of FX trading a collision between new technology and traditional banking is changing the economics and mechanics of the business. So far, participants talk politely of cooperation.
  • A mixture of accounting issues, demographics, trends in the equity market and a sharp fall in bond yields has revealed the chasm between the assets and liabilities of pension funds in the UK, Europe and the US. Many will be unable to pay their pension promises in full. Most will be pushed into liability-driven investment strategies. But are they a real solution or an expensive act of desperation?
  • Our December cover story, The problem with foreign exchange, has sparked debate about the structure of today's FX market. Responses to the feature are still arriving at the Euromoney office.
  • “We’ve made $100 billion of investments in the past few years. We have to be number one in every product, in every market. We have no choice. There’s no other way to go.”
  • Argentina’s debt default, devaluation and subsequent recovery is, along with Enron’s fall from grace, the biggest financial story of the decade.
  • “Citigroup should wipe the floor with everyone in credit derivatives. What happened?”
  • Acquired asset managers often fail to fulfil their promise, as Deutsche Bank has found more than once. But Deutsche’s parachuting of Axel Schwarzer into US firm DWS Scudder looks set to be a success story.
  • Manic demand for returns is putting Latin American issuers in the driving seat, calling the shots on subjects such as length of maturity, target investor base and restructuring opportunities. Theodore Kim reports.
  • Latin America’s local-currency markets are no longer a sideshow for esoteric investors. Today, many emerging market portfolio managers have exposure. But, as Felix Salmon reports, the growth of domestic supply and demand will drive these markets forward.
  • Further consolidation in Latin America’s banking industry is expected on the back of strong economic growth and financial stability. Foreign banks, which were active acquirers in the 1990s, are expected to play a big part in this. Leticia Lozano reports.
  • Latin American companies are shedding reputations for irresponsible management to become competitors, and even leaders, in the global markets. So much so that some don’t even want to be considered Latin any more. Lawrence White analyses the results of Euromoney’s first survey of the best-managed companies in the region.
  • With Mario Draghi taking up a position on the European Central Bank’s governing council, and Jürgen Stark set to be the next new member, the inner sanctum is likely to become more pragmatic than doctrinaire.
  • Conflict over oil and gas supplies is set to fuel tension between western Europe and Russia in coming years.
  • The organizers of Rosneft’s IPO, tentatively scheduled for October or November, are considering placing the shares in Tokyo as well as in Russia and London, according to Valery Nazarov, head of the Federal Property Management Agency. However, he has so far ruled out a simultaneous flotation.
  • Italy’s Intesa has won the battle to acquire an 85.42% stake in Ukrsotsbank, Ukraine’s fourth-largest bank. The bank has 527 branches and serves more than 660,000 customers. Banca Intesa says that it values the bank at $1.3 billion and that its total investment will amount to $1.61 billion, including the share capital increase. Intesa already owns banks in Croatia, Hungary, Slovakia and Serbia & Montenegro.
  • Kazkommertsbank sold a S$100 million ($61 million) bond last month, the first ever Singapore dollar-denominated issue from a Kazakh issuer. European investors bought 65% of the three-year paper, with the rest divided between Asian and offshore US accounts. Singapore government securities offer very low absolute rates, and the deal’s success was attributed to the pick-up and currency diversification that it offered.
  • Fitch and S&P put Nigeria’s risk of default on the same level as Brazil and Turkey.
  • Flushed with the success of its 2005 activities, with more than $20 billion raised through privatizations for the Turkish treasury, the country’s privatization administration wants to reattempt the sale of tobacco firm Tekel. The government’s latest attempt to sell the firm was just last year, but no bids were received. This was blamed on an increase in tax on tobacco products. It also tried, but failed, to sell the company in 2003. Other entities slated for privatization this year include Halkbank, petrochemicals firm Petkim and Turkish Airlines.
  • Bond investors are starting to clamour for extra protection as buyout risk increases.
  • The country’s banks are successful and stable. But a small domestic market leaves a difficult choice: concentrate on building at home or seek to expand overseas. Laurence Neville reports.
  • Taiwan is desperately overbanked and the unprofitable financial sector is crying out for successful consolidation and rationalization, rather than ill-judged government initiatives. But that has not stopped foreign investors buying into the market for the first time. Nick Parsons reports