“Federal Reserve imposes limits on two banks - News-Leader.com” plus 4 more

Federal Reserve imposes limits on two banks - News-Leader.com
UPDATE 1-MOVES-CIT Group, Jupiter Asset Management - Forbes
UK's budget deficit threatens recovery - opposition - Forbes
Highlights From HRB's Q1 Conference Call: Reaffirms FY10 EPS Outlook - StreetInsider.com
Exonerated Prisoners Find Prosperity - AOL

Federal Reserve imposes limits on two banks - News-Leader.com

Posted: 04 Sep 2009 01:30 AM PDT

Omaha , Neb. -- The Federal Reserve has imposed restrictions on two correspondent banks in Nebraska and Missouri owned by Midwest Independent Bancshares Inc. of Jefferson City because of concerns about the banks' exposure to the commercial real estate market.

The agreements released Thursday put limits on the Nebraska Bankers' Bank of Lincoln, Neb., and Midwest Independent Bank of Jefferson City, which together have about $400 million in assets.

Those banks provide banking services for roughly 550 financial institutions throughout the Midwest by helping community banks finance loans that exceed their lending limits and by lending banks money. Midwest Independent and Nebraska Bankers' banks are two of about 20 so-called "bankers' banks" nationwide.

Regulators want the banks to develop stronger credit risk standards, adopt comprehensive ethics policies, improve capital reserves and draft realistic budgets for 2009.

A Federal Reserve spokesman declined to comment on the restrictions.

L.D. McDonald, CEO of Midwest Independent Bancshares, said his banks are responding to the challenges of the recession and the delinquencies in commercial real estate loans. McDonald said many of the loans bankers' banks help finance are commercial real estate loans, which is part of why regulators questioned MIB's banks.

"We've been under increasing scrutiny at the national level because of our business model," McDonald said.

FDIC officials have said commercial real estate loans could continue to be problematic for some time. Hundreds more banks are expected to fail in the next few years largely because of souring loans for commercial real estate. The number of banks on the FDIC's confidential "problem list" jumped to 416 at the end of June from 305 in the first quarter.

McDonald said he believes his banks will be able to overcome the current challenges.

"We're going to continue to serve our customers as we always have," McDonald said.

John Munn, director of Nebraska's Department of Banking and Finance, said regulators became worried about Nebraska Bankers' Bank primarily because of the business model and not because of concerns about the way the bank has been run.

Bankers' banks tend to deal with fewer, larger loans, so if there's a problem with any loan it has a bigger impact on the overall portfolio, which tends to be less diversified than a conventional bank's loan portfolio.

"There's just special challenges to that business model right now," Munn said.

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UPDATE 1-MOVES-CIT Group, Jupiter Asset Management - Forbes

Posted: 04 Sep 2009 08:40 AM PDT

(Adds CIT Group, Jupiter Asset Management)

Sept 4 (Reuters) - The following financial services industry appointments were announced on Friday. To inform us of other job changes, e-mail moves@thomsonreuters.com.

CIT GROUP INC

CIT Group Inc said it had extended the contract of Chief Executive Jeffrey Peek for one year as the lender hurt by mounting credit losses fights to avoid bankruptcy.

Peek's contract as chairman and CEO of the lender to nearly 1 million small and medium-sized businesses will expire on Sept. 2, 2010.

To read more, double click on

JUPITER ASSET MANAGEMENT

Jupiter Asset Management said it has appointed David Conway to the newly-created position of Sales Director, Asia Pacific. Conway joins Jupiter in October from Royal Skandia.

FUBON BANK

Fubon Bank, a unit of Fubon Financial Holding Co Ltd , said Chief Executive Jin-Yi Lee has resigned. The bank said it has identified a successor to Lee, but an announcement will be made only once it receives regulatory approval.

HSBC INSURANCE

HSBC Insurance said it has appointed Bruce Howe, currently deputy regional head of insurance for HSBC Insurance (Asia-Pacific) Holdings Ltd, chief executive and head of insurance for the UK, Europe and the Middle East.

HSBC also said it has appointed Paul Menzies and Paul Arrowsmith as Head of Insurance, North Asia and Head of Insurance, South-East Asia, respectively.

MERCER

The wholly-owned subsidiary of Marsh & McLennan Companies Inc said Rob Goward has rejoined the company as a principal and client manager with primary responsibility for managing a portfolio of multinational clients. He joins from the spirits group Maxxium Worldwide where he was group HR director for the last two-and-a-half years.

RBC WEALTH MANAGEMENT

RBC Wealth Management said it has hired Santiago Cedron and Patricio Demaria to its team responsible for providing integrated wealth management services and solutions for High Net Worth clients in Latin America.

Cedron joins RBC Wealth Management, having previously worked at UBS and JPMorgan, while Demaria has previously worked at JPMorgan and Citigroup.

HOGAN & HARTSON LLP

Hogan & Hartson LLP said Robert Bennett and Carl Rauh will join the firm's Washington office as partners. Bennett and Rauh will join from the Washington, D.C., office of Skadden, Arps, Slate, Meagher & Flom LLP.

UNICREDIT GROUP

UniCredit Group said it has appointed Patrik Olsson as Global Head of Rates with immediate effect. Olsson joins from ABN Amro/Royal Bank of Scotland, where he was Global Head of Local Markets.

(Compiled by Abhishek Takle in Bangalore)

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UK's budget deficit threatens recovery - opposition - Forbes

Posted: 04 Sep 2009 08:40 AM PDT

By Avril Ormsby

LONDON, Sept 4 (Reuters) - Britain risks losing the confidence of the international markets unless it started tackling its record budget deficit, opposition Conservative finance spokesman George Osborne said on Friday.

Speaking ahead of a G20 finance ministers' meeting in London this weekend, he said Britain's huge debt and continued public spending threatened to stall its recovery.

'If we don't start dealing with this debt problem, if we don't start addressing the problem, coming forward with the answers, gaining the confidence of international markets that we are aware there's a problem and we've got a plan to deal with it, then I think that will threaten the recovery,' Osborne told BBC radio.

'I think the fact that Britain is not dealing with its debt crisis will actually threaten international confidence in the UK.'

Faced with lower income from financial services and rising welfare payments during the worst recession since World War Two, Britain's budget deficit is forecast to reach 175 billion pounds this year, more than 12 percent of GDP.

The national debt is expected to double to 1.4 trillion pounds in the next five years.

Last month, Conservative leader David Cameron, tipped to become prime minister in a general election due by next June, said the country ran the risk of becoming less attractive to overseas investors, or unable to meet its obligations, if it continued borrowing.

In May, Standard & Poor's cut Britain's sovereign rating outlook to negative from stable, retaining its triple-A rating but warning there was a one in three chance of a downgrade.

Unlike France and Germany, which emerged from recession in the second quarter, Britain's economy continued to languish, because of its huge deficit, Osborne said.

He said the government's public spending fiscal stimulus was failing, saying instead the focus should be on the policy of low interest rates and quantitative easing, which was working.

'If you mean monetary stimulus, low interest rates and if the (Bank of England) governor judges it necessary, quantitative easing, yes, of course you need to keep that going until you are sure that your recovery is under way and you are sure you are anchoring your inflation expectations.'

(Reporting by Avril Ormsby; Editing by Mike Peacock) Keywords: BRITAIN DEBT/OSBORNE

(avril.ormsby@reuters.com ; +44 207 542 1816; Reuters Messaging: avril.ormsby.reuters.com@reuters.net )

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Highlights From HRB's Q1 Conference Call: Reaffirms FY10 EPS Outlook - StreetInsider.com

Posted: 04 Sep 2009 08:18 AM PDT

September 4, 2009 11:19 AM EDT

H&R Block, Inc. (NYSE: HRB) reports a Q1 loss of $0.39 per share, below the consensus of a $0.37 loss. Revenues grew 1.3% to $275.5 million, versus the consensus of $280.1 million.

Highlights From HRB's Q1 Conference Call:

H&R Block continues to expect its fiscal 2010 earnings from continuing operations will be in the range of $1.60 to $1.80 per share. The consensus is $1.65.
(CEO) Based on IRS projections and unemployment data, we believe that the total number of tax returns filed will likely be down 1 to 2% this coming season.
In addition, we expect that do-it-yourself category will continue to gain a small amount of market share from assisted tax preparation, primarily driven by growth in the digital online space.
Turning to the regulatory environment, we don't believe that the new tax law provisions resulting from the American Recovery and Reinvestment Act passed earlier this year, will significantly increase the number of filers as the Economic Stimulus Act did in 2008. However, various provisions such as the Make Work Pay credit will increase the complexity of tax returns.
We do not expect these changes to materially impact the economics for our clients or for us as a company, given our historical pricing and our long-term relationship with one of the world's largest banks.
There are also important market dynamics impacting RSM McGladrey. The audit market remains soft due to the current economic climate and billable rates and hours are under pressure. However, it's important to note that RSM McGladrey's tax and consulting businesses have not been impacted as our core revenue was up nearly 6% over the prior year.
(CFO) While our tax rate for the quarter was 38.1%, we still expect that our effective rate for the full year to be higher and closer to our original guidance of 40%.
Tax Services revenues rose nearly 8%, primarily due to improved results from our Australian operations.
RSM McGladrey's core revenues including tax and consulting grew nearly 6%, but those gains were partially offset by a decline in capital markets revenues due to a decrease in the number of transactions closed.
On the expense side in the tax services segment, we incurred the expected incremental pre-season cost of $9 million from the Southwest franchise operation we acquired last November. The net impact of the acquisition including revenues was $7 million.
We ended the first quarter with over $1 billion in non-restricted cash and no borrowings outstanding under our $2 billion committed lines of credit.
The cash decline of approximately $650 million versus April 30th was primarily due to normal off-season expenses, income tax payments, quarterly dividends and seasonal fluctuations at H&R Block Bank.
Net receivables declined to $379 million from more than 512 million at year end 2009, reflecting the normal pattern of collections primarily at RSM McGladrey. Total debt was essentially unchanged at 1.1 billion.
As expected, the net mortgage loans held for investment decreased further to $708 million, down more than 37 million from year end, and more than 160 million year-over-year.
We remain on track to achieve earnings for the full year within our previously established range of $1.60 to $1.80 per share from continuing operations. We continue to expect an improvement in tax services margin totaling 100 basis points over two years.
(Q&A) I wanted to ask you about your comment about the tax business. You said that the IRS anticipates tax returns to be down about 1 to 2%. And then you also indicated that you thought the software business would take some market share and obviously an H&R Block, specific issue is maybe the loss of some clients because of Wal-Mart. If you put all that, and look at the numbers, it sounds like for H&R Block you're kind of starting at negative 3, possibly negative 4. I'm wondering from your perspective, would you anticipate this year to be a negative client growth year, because of all the headwinds or are there other things that you think you'll be able to do to have a positive client growth year for the upcoming tax season. (A)As you know, when we gave our guidance on last quarter's call, we mentioned our guidance was based on low single digit revenue growth. And we specifically don't want to repeat what we've done in the past, which is say how much of that is coming from net average charge and complexity. How much of it is coming from our tax form pricing or how much of it is coming from client growth. In the economic environment that we're dealing with and with the headwinds that you mentioned, we need the flexibility to be able to manage and balance all those three factors, during the course of tax season. And so for that specific reason, we think there's a number of different ways that we can get to low single digit revenue growth, and we will manage it in a way that gives us the best result for 2010, consistent with our guidance, but even more importantly, also positions us strongly for growth beyond 2010 as well. So, I'm not trying to avoid the client growth question. There are headwinds, but we think we've got a lot of good operational things like the walk-outs that we talked about earlier that should help us gain market share and hopefully potentially offset a lot of the headwinds that we face.
And just switching gears a little bit, ask you about McGladrey Pullen. You talked about having a possible, if things don't work out with McGladrey Pullen may be going and align yourself with another test firm. If that happens any thoughts or any comments you can provide in terms of the revenue you would be able to keep as a result of having a newer test firm and losing McGladrey Pullen, any thoughts on what the impact could be to the business? (A)At this point, until we really get closer to understanding who those potential test partners might be, and it doesn't necessarily need to be one and probably likely would not be just one, to be able to replace as many of the clients that we currently have with MNP, I can't tell you. What I can say is that our hope would be, if we do end up aligning with different attest firms, that we'll be able to keep as many of our M&P attest partners with RSM McGladrey and our new affiliated attest firm and as we possibly can. So our plan would not be to try to give up our existing M&P audit partners, or their clients. But be able to realign them with our new attest firm partner.
You mentioned potential new geographies. Is it possible that we could see something as big as the Southwest acquisition that you did last year? Ask are looking to do something a little bit smaller. (A) Well I talked about new geographies not in terms of acquiring franchisees, because as we mentioned when we did the Southwest acquisition last year, that's really the last large independent franchise network in the system. And clearly our focus is really on going the opposite way and re-franchising offices as opposed to focus on purchasing locations from franchisees. My reference to geographic opportunity is we have a couple very large urban markets where we have significant market share opportunities, where they are running at about half of our national market share averages. Houston is one of those and that was part of our strategic purpose in acquiring the Southwest franchise. But the other two are New York and Los Angeles, where we think we have tremendous opportunities to grow our clients in those two large urban centers.

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Exonerated Prisoners Find Prosperity - AOL

Posted: 04 Sep 2009 08:11 AM PDT

Afghans feed pigeons at the Shrine of Hazrat Ali in Mazar-i-Sharif, Afghanistan, on Sept. 3.

Farzana Wahidy, AP

Thai soldiers carry a woman injured from the explosion of a motorcycle bomb in Pattani, Thailand, on Sept. 3

Sumeth pranphet, AP

California Governor Arnold Schwarzenegger picks up a dumbbell in a burned home while touring a neighborhood destroyed by wildfires in Tujunga, Calif., Sept. 3.

LM Otero, AP

Members of the U.S. forces 1st platoon, A Company 25 Infantry Division are illuminated by a red night light as they prepare for their night patrol in Khowst province, Afghanistan, on Sept. 3.

Dima Gavrysh, AP

Iranian lawmakers count votes for the cabinet list proposed by Iranian President Mahmoud Ahmadinejad, in Tehran, Iran, on Sept. 3.

Vahid Salemi, AP

Soldiers and policemen try to dig out the body of a victim buried from a landslide in the village of Cikangkareng, Indonesia on Sept. 3.

Adek Berry, AFP / Getty Images

Rescuers search for victims on Sept. 3 after an earthquake-triggered landslide buried a village in Cianjur, Indonesia. Dozens of people were killed and many more were missing after the quake rocked southern Indonesia.

Irwin Fedriansyah, AP

A Taiwanese woman burns paper money in a offering for the dead in Taipei, Taiwan, Sept. 3. Chinese cultures around the world offer tributes and respect to the deceased during the lunar Ghost Month.

Wally Santana, AP

Malaysia's first submarine, made in France, reaches its Naval base in Port Klang on the outskirts of Kuala Lumpur on Sept. 3.

Saeed Khan,AFP / Getty Images

Kashmiris cross Dal Lake on a Shikara, a traditional boat, in Srinagar, India, Sept. 3.

Dar Yasin, AP