Foreign Exposure Fell For U.S. Banks in 3Q
WASHINGTON - U.S. banks' foreign lending exposure fell by $11.8 billion, or 2.4%, to $489.8 billion in the third quarter, according to a survey released Wednesday by the Federal Reserve Board.Much of the decline occurred in Japan, where creditors owed U.S. banks $5 billion less than in the second quarter. Overall, G-10 countries - the 10 largest industrialized countries - and Switzerland accounted for 68.6% of the worldwide decline. Outstanding loans to Latin American and Caribbean countries shrank by $2 billion, to $63.1 billion.
The data cover 108 U.S. banks, including Bank of America Corp., Citigroup, Chase Manhattan Corp., and First Union Corp. The Country Exposure Lending Survey is released about 13 weeks after each quarter it covers has ended.
- Katharine Fraser
SocGen Says Annual Profits Rose Last Year
PARIS - Societe Generale SA, France's third-largest bank, said it would report a profit gain for 1999, noting buoyant economic growth and capital markets activity that boosted its business.SocGen's board, which met Wednesday, did not give final figures, which will be posted Feb. 23. Analysts said they believe profits doubled last year, to about $2 billion.
France's economy grew as much as 2.8% last year, according to the Finance Ministry, swelling the bank's business in its 2,600 branches. The French stock market rose 50%, spurring capital markets activity.
"Banking income went up, charges for risk and bad loans went down, and the mutual fund business went well," said Philippe Leonnard, an analyst at Meeschaert-Roussell before the board's statement was released. "The economic climate was much healthier."
SocGen said retail loans to consumers and small and mid-sized businesses rose 5.2%, while retail deposits rose 6.3%. Funds under management rose 23%, to more than $ 184 billion. Investment banking had a "good" fourth quarter, SocGen said.
Return on equity, a measure of profitability, will be more than 16% for its main businesses, the board said.
- Bloomberg News
Regional Bank in Italy Buys Broker for $48M
MILAN - Banca Popolare di Verona Scrl, one of Italy's largest regional banks, said it bought Banca Aletti & C., one of Italy's oldest brokerages, for $48 million.Popolare Verona bought 51.8% of the brokerage from the Aletti family and 14.1 percent from Cattolica Assicurazioni SpA to gain 80% of the shares. The Aletti family will retain 20 percent.
"The investments needed in new technology and the changing banking sector can only be guaranteed by having a strong partner, such as Popolare Verona," said Banca Aletti chairman Urbano Aletti.
The Italian banking and finance industry is consolidating fast as Italy's more than 800 banks seek to grow to face competition from larger overseas rivals and expand their product ranges and branch networks.
Banca Aletti will operate as an independent unit and will focus on increasing its client base among wealthy individuals. It will offer services through the Internet and by telephone, and will be listed on the stock exchange within three years, Mr. Aletti said.
Popolare Verona also said it is setting up a life insurance joint venture with Cattolica Assicurazioni SpA to sell the Italian insurer's products through Popolare Verona's more than 560 branches. The sale of life insurance through bank branches is one of the fastest growing sectors of the Italian insurance market.
- Bloomberg News
Import Price Increase Streak Hits Six Months
WASHINGTON - U.S. import prices increased for the sixth consecutive month in December, led by rising oil costs, the Labor Department said Wednesday.The index of imported prices for all goods including oil rose 0.7% after increasing 0.6% in November. Excluding petroleum, import prices were unchanged; they rose 0.4% the previous month.
Petroleum prices rose 6% in December after increasing 2.7% in November.
For all of last year, import prices rose 7% after falling two years in a row. Last year's increase, the biggest since the Persian Gulf crisis of 1990, reflected a 132.9% rise in oil prices, the Labor Department said. Excluding petroleum, import prices were unchanged in 1999 after three years of decreases.
In 2000 import prices should settle, said Chris Low, an economist at First Tennessee Capital Markets in New York. "Import prices were inflated by the upward drive in oil prices last year, but oil should at least stabilize and may even fall" this year, he said.
- Bloomberg News
Mortgage Applications, Demand Up, MBA Says
WASHINGTON - Applications for U.S. mortgages rose last week, even as mortgage rates reached their highest level in more than three years, the Mortgage Bankers Association of America said.The group's mortgage applications index rose 8.6% in the week that ended Jan. 7. The report also showed the purchase index, which gauges demand for houses, increased 7%. The refinancing index was up 15.8%.
The adjusted indexes measure how many applications U.S. mortgage bankers receive each week and account for seasonal changes and holidays.
Ryan Brecht, an economist at Standard & Poor's in Belmont, Calif., said that even if the applications index "bumps up a little bit, overall we expect rates to continue to dampen mortgage activity."
- Bloomberg News
PNC to Offer Home Loans on eStudent Site
PITTSBURGH - PNC Bank has agreed to provide home equity loans on eStudentLoan's Web site, www.eStudentLoan.com, which is designed to help families find, compare, and choose educational funding.The agreement would enable PNC to increase its on-line presence and reach a national customer base. Through StudentLoan.com, potential borrowers can apply for a loan on a 20-minute on-line application and receive a response while on the site or later through e-mail.
Heidi Scanlon of eStudentLoan said, "We are pleased to be working with PNC Bank to help parents navigate through the financing options available on the Web." Ms. Scanlon said the site enables students and parents to learn about loans and scholarships, and seek alternative ways to fund their education.