Foreign Banks' American Miscues
November 8, 2012 11:03 AM
Chinese banks have been cleared to invest in U.S. banks but are proceeding cautiously to avoid missteps, industry observers say. Click to view foreign banks that fled the U.S. following major stumbles here or problems back home.
(Image: Bloomberg News)
(Image: Bloomberg News)
Sumitomo Bank
Sumitomo entered the U.S. in the 1950s and expanded in California during a wave of U.S. investments by Japanese banks in the 1980s and early 1990s. That trend reversed when the Japanese economy cratered. In 1998 Sumitomo sold its U.S. commercial banking operations, based in San Francisco, to Zions Bank for the fire-sale price of $546 million.
(Image: Bloomberg News)
UFJ Holdings
UFJ is another Japanese bank that expanded in California during the 1990s before abruptly pulling up stakes. In 2001, the Tokyo-based company, which was losing money at home and facing pressure to raise capital, sold United California Bank to Bank of the West (owned by France's BNP Paribas of France) for $2.4 billion.
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(Image: Bloomberg News)
Allied Irish
Baltimore-based Allfirst Bank booked losses of nearly $700 million in early 2002 following a rogue currency trader's bad bets on the Japanese yen. A few months later, Allfirst's owner, Allied Irish, announced it was selling the $18 billion-asset bank to M&T Bank of Buffalo.
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Canadian Imperial Bank of Commerce
CIBC moved aggressively into investment banking in the U.S. following its 1995 acquisition of a small New York firm. Ill-advised investments in subprime mortgage-backed securities led to massive losses, and in 2007 it sold much its U.S. investment banking operations to Oppenheimer Holdings.
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ABN Amro
The Dutch banking giant ran LaSalle Bank in Chicago for nearly 30 years, but pressure from investors forced ABN Amro to break itself up. In 2007 it sold LaSalle to Bank of America for about $21 billion.
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Piraeus Bank
Plagued by problems at home and in need of fresh capital, Greece’s fourth-largest bank was forced to put its $900 million-asset Marathon Bank in New York up for sale earlier this year. Investors Bancorp in New Jersey is buying Marathon for about $135 million.
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Royal Bank of Canada
Royal Bank of Canada's 2001 acquisition of Centura Bank in North Carolina – later named RBC Bank USA – worked out fine until the real estate market went bust and saddled the Toronto bank with billions of dollars in problem loans. The U.S. unit was sold to PNC Financial Services Group earlier this year for about $3.4 billion.
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