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Financial Services Top Stories Of The Day – January 26, 2007 January 26, 2007

Posted by notapundit in Economic News.
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COUNTRYWIDE UP ON BOFA MERGER TALK

Countrywide Financial shares jump 6% after the Financial Times reports Bank of America and Countrywide have held discussions about an alliance that could cost the second-largest U.S. bank $30 billion. Talks could also lead to joint venture.

NASDAQ WON’T RAISE $5.3B LSE OFFER

Nasdaq says it won’t raise its offer, even if it gets LSE board approval by tomorrow’s deadline. Under U.K. law, Nasdaq will no longer be able to increase its offer after the deadline if a rival bidder appears.

MARSH TO MAKE PUTNAM DECISION NEXT WEEK

Insurance broker continues to evaluate options for its Putnam Investments mutual fund business and still expects to reach a decision by the middle of next week. Power Financial is said to be near a deal to buy Putnam for $3.9 billion.

HARTFORD FINANCIAL 4Q NET UP 68%

Insurance company’s 4Q net income grows to $783 million, or $2.42 a share, including a $76 million charge related to revised estimates of future gross profits. Core earnings increase to $768 million, or $2.37 a share.

T ROWE PRICE 4Q NET UP 27%

Investment-management company posts earnings of $148.9 million, or 53c a share, as revenue rises 21% to $489.1 million. Analysts expected earnings of 51c a share on revenue of $481.5 million.

CAPITAL BANCORP 4Q NET RISES 14%

Bank posts net income of $11.4 million, or 68c a share, as revenue rises 5% to $50 million. Assets not earning interest increases to 1.08% of total assets from 0.99% in 3Q on continuing ‘weakness in the Michigan economy.’

MERRILL CEO GETS $48M FOR 2006

CEO Stan O’Neal receives Merrill stock worth $28.8 million, a cash bonus of $18.5 million, and salary of $700,000. Among securities industry CEOs, his pay ranks only behind Lloyd Blankfein of Goldman Sachs at $54 million.

FIRST FINANCIAL BANCORP 4Q NET DOWN 71%

Bank holding firm posts earnings of $827,000, or 2c a share, due to costs associated with loans, pension plan accounting charges and other costs. Net interest income falls 5.7% to $30.1 million, as non-interest income rises 58%.

INVESTOR AB, MORGAN STANLEY TO BUY MOELNLYCKE FOR $3.7B

Swedish investment company Investor AB and Morgan Stanley Principal Investments say they have signed an agreement to acquire Moelnlycke Health Care Group from Apax Partners for $3.7 billion.

SOUTHWEST BANCORP 4Q NET UP 41%

Southwest Bancorp earns $6.45 million, or 44c a share, as net interest income increases 11%. Results are only preliminary because of an ongoing investigation into cash shortages related to automated teller machines owned by one of its units.

CHEMICAL FINANCIAL 4Q NET FALLS 11%

Bank holding firm posts net income of $11.2 million, or 45c a share, as a flat yield curve, a struggling Michigan economy and deposit pricing competition continue to hurt performance. Net interest income falls 7% to $32.7 million.

FIRSTFED FINANCIAL 4Q NET RISES 19%

Bank holding company posts earnings of $33.4 million, or $1.97 a share. Analysts expected $1.70 a share. Net interest income rises 11% to $75.6 million. Noninterest income nearly doubles to $5.09 million.

HEDGE FUNDS FINDING PROFIT IN BORROWED SHARES

Using borrowed shares to swing the outcome of votes allows speculators to gamble that a company’s stock will drop, and then vote for decisions that will ensure it does, without ever owning the stock. And individual shareholders often don’t even know their rights have been borrowed.

SCHWAB CFO DODDS TO RETIRE

CFO Christopher Dodds will step down after annual meeting in May, leaving Schwab without the services of an executive who helped shore up the company’s finances in recent years. Joseph Martinetto will replace him. Shares fall 2%.

LEGG MASON OPERATING INCOME RISES

Asset manager’s 3Q net income slides 77%, due to the sale of its brokerage business a year ago, but operating income jumps 72% to $174.1 million, or $1.21 a share. Revenue climbs 64% to $1.13 billion.

SMITH BARNEY TAPS WACHOVIA BROKERS IN NY

Firm hires James White, Helen Rothlein and Alexander Gorman from Wachovia, who together oversaw around $350 million in client assets at the Richmond-based firm.

CITIGROUP OPENS 3 OUTLETS IN CHINA

Financial-services firm opens three new consumer outlets in in the relatively prosperous cities of Shanghai, Beijing and Tianjin, bringing its network in the country to 16 as global banks ramp up their expansion in high-income cities.

GREATER SCRUTINY OF PRIVATE EQUITY INEVITABLE

Federal Trade Commission’s Kovacic says antitrust officials will ‘inevitably’ have more run-ins with merger and acquisition activity involving private equity houses, as those vehicles have more dominant positions in different marketplaces.

EX-AIG CHIEF FORMS VENTURE WITH CHINA BROKERAGE

Ousted chairman of American International Group Hank Greenberg will be pursuing deals through a joint venture he has set up with Citic Securities, China’s fifth-largest brokerage firm by assets.

DAVID HARRIS NAMED PRESIDENT OF CBOE

CBOE names David Harris president of the new CBOE stock exchange, scheduled to launch March 5. Harris previously served as senior VP, business planning and strategy for the American Stock Exchange.

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