Financial fire sales

More banks try to auction off pieces of themselves with varying success:


Oh lucky shareholders. Barclays believes investors should be grateful for the fact that its writedowns on credit securities were just £1.7bn this year. It also wants them to focus on the superior performance of Barclays Capital at a time when, on both sides of the Atlantic, investment banks are warning of tougher times. Sure, Barclays swore blind for months that it did not need extra funding. But now that it has decided to raise £4.5bn, it wants applause for avoiding a nasty rights issue while still managing to give pre-emption rights to existing shareholders.

These are the same investors, though, who have watched Barclay’s market capitalisation halve over the past 12 months. That share price performance is barely better than rival Royal Bank of Scotland, whose credit losses and ill-timed purchase of ABN Amro forced the biggest rights issue in UK history. It is also 25 per cent worse than the European banking sector average. Now existing shareholders are being asked to buy 3 shares for every 14 they already own, or be diluted by 24 per cent. In that context the lack of humility shown by senior management at Barclays – and for that matter at other UK banks – is troubling. Executives in the US have fallen on their swords for less.


Investors seem to think UBS has something up its sleeve — and it may be a sale of some kind.

Shares in the troubled Swiss bank have risen 9.7 percent over the past two days, as analysts began speculating that it had hired an adviser to explore strategic options. On Wednesday, The New York Post reported that UBS has hired Lazard as an adviser to review its businesses.

UBS has already faced pressure from shareholders, including the activist fund Olivant Advisers, to hive off its flourishing wealth-management unit from its considerably more troubled investment banking business.