Republic Shareholders Approve HSBC Bid
NEW YORK - Republic New York Corp. shareholders on Tuesday approved the $9.85 billion buyout offer by HSBC Holdings PLC, ending weeks of uncertainty about the deal's fate.The deal, under which Republic shareholders would receive $72 a share in cash, still needs approval from the state of New York and the Federal Reserve. Republic and HSBC expect to obtain those approvals this month and to close the deal before yearend.
The approval came 22 days after Republic's chief shareholder, Edmond Safra, agreed to reduce the price of his shares by $450 million to offset potential liability. Republic's securities subsidiary faces lawsuits and a potential criminal probe into its role in aiding Martin Armstrong, a fund manager accused of bilking Japanese investors of as much as $1 billion in a Ponzi scheme.
Mr. Armstrong faces charges of securities fraud. Republic and its subsidiary have not been accused of any wrongdoing.
- David Weidner
Deutsche Bank Appoints a Vice Chairman
NEW YORK - Deutsche Bank AG on Tuesday named George Stamas, a partner at the law firm of Wilmer, Cutler & Pickering, a vice chairman at its U.S. investment bank.Mr. Stamas, 48, will also have the title of managing director and will lead the mid-Atlantic region for Deutsche Banc Alex. Brown's global investment banking division. He will focus on the firm's activities in the technology, Internet, and health-care industries.
Mr. Stamos will report to Mayo A. Shattuck 3d and Yves de Balmann, co-chairmen of Deutsche Banc Alex. Brown.
Deutsche said Mr. Stamas would work at an investment banking office it plans to open in the first half in Tysons Corner, Va., to cater to the area's growing technology sector and in Deutsche's offices in Baltimore and Washington.
- Laura Mandaro
Study: Direct Student Loans Less Costly
WASHINGTON - The federal government saves "substantially" when it makes student loans directly rather than relying on private lenders, according to a report issued Tuesday by the Education Department.The agency estimated that the government will spend more than $1,400 in subsidy and administrative expenses over the life of each $10,000 of student loans made through the private sector in the current fiscal year. The government will earn $411 for each $10,000 of loans it makes directly during the same time period, the report said.
Under banking industry criticism that previous cost comparisons had been skewed, the Education Department said it took federal administrative costs into greater account. The report found that the government spends 4 cents of each dollar lent to originate and administer direct loans, while it pays slightly more than 1 cent per each dollar of industry loans for application processing and other expenses. But "these costs are more than offset by federal revenues generated by direct loan borrower repayments," the report said.
Industry representatives questioned the timing of the report, noting that it came after several universities decided to get out of the direct loan program. "This is an attempt to buttress a program that is on the ropes," said John E. Dean, special counsel to the Consumer Bankers Association.
- Dean Anason
Santander Brokerage Hires Deutsche Bank Exec
NEW YORK - Banco Santander Central Hispano SA has hired Stephen A. Ferriss, a senior Deutsche Bank executive, to be president and chief executive officer of Santander Investment Securities Inc., a New York subsidiary specializing in services for the Spanish bank's Latin American clients.Mr. Ferriss, 54, was a managing director and partner in the global banking division of Bankers Trust Corp., which was bought in June by Deutsche Bank AG. He succeeds Ricardo Mandelbaum, who is developing an Internet-based trading system for Santander's Latin American clients. Mr. Mandelbaum will remain in New York.
- Laura Mandaro