Financial Times Summary

Wed 30 Jul 2008

Merrill Lynch
Leading global banks faced pressure to write down or sell billions of dollars of toxic assets following Merrill Lynch's disposal of $30bn in mortgage-related securities at a cut price. Merrill's move to sell collateralised debt obligation for $6.7bn, or 22 cents on the dollar, announced on Monday, raised hopes other banks would strike similar deals and purge their balance sheets of bad assets.

FSA
Workers at Swiss bank UBS and JP Morgan Cazenove, one of the oldest names in the City, were arrested for alleged insider dealing yesterday as police raids sent a chill through London's trading rooms. The arrest mark the third high-profile action the Financial Services Authority has taken in the past week over insider trading, in a sign of a tougher approach to a problem the regulator believes is rife in the Square Mile and a threat to the integrity of the markets.

National Australia Bank
National Australia Bank is refunding £284m to investors in a bond sale that was finalised days before it disclosed additional provisions against a derivatives portfolio.

Barclays
Barclays Capital will fight vigorously a lawsuit filed against it in London;s High Court by a banking client, Cassa di Risparmio di San Marino, which alleges misrepresentation by the UK investment bank in the sale of complex debt products. The San-Marino-based bank is seeking damages of £134m in losses and lost income related to five complex credit linked notes, bought by CRSM for 450m euros in 2004 and 2005.

Abbey
Abbey reported a 20% jump in first-half profits to £485m, helped by strong revenue growth and tight cost control. The bank, which is owned by Santander of Spain, took advantage of continuing turmoil in the mortgage market to grab market share and took net new mortgage lending of 35% for the second quarter.

HBOS
The chairman of St James's Place said yesterday that was not aware of any plans by HBOS to sell its 60% stake in the upmarket wealth manager. There has been speculation about potential interest in St James's and that HBOS could look to offload its stake to shore up its own balance sheet.

Societe Generale
One of the six lawyers hired by Jerome Kerviel to defend the alleged rogue trader against Societe Generale has dropped out of the team. Eric Hemmerdinger said yesterday he would not continue because, "too many lawyers spoil a good defence strategy." Mr Kerviel, a junior equity derivatives trader, changed his legal team two weeks ago to focus on a more offensive strategy against Societe Generale which blames him for $7.6bn of losses. He retained one of his old lawyers-Guillame Selnet-but hired five new lawyers.

Legal & General
Legal & General underperformed a resilient London market yesterday on fears about the life assurer's £1bn share buyback programme. L & G has repurchased £755m of shares in the past year but traders are worried it will not be able to extend the scheme because of the impact of falling equity markets.

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