An examination of GCC banks recently published by AT Kearney, a financial consulting firm, concluded that the region’s banking industry will likely undergo consolidation via M&A in the face of changing conditions in the global and regional financial markets.  The study foresees first the rise of “national champions”, as well as a plethora mergers between regional investment banks and retail banks.  “In the long run, true regional players will emerge,” it states.

Middle East banks have been a boon for much of the decade–from 2002 to 2007, for example, banks in the UAE experienced a 39% increase in net profits and a 34% increase in total banking assets.  Moreover, their assets/GDP ratio is still comparatively low in most GCC countries, which leaves room for growth.  And banks are relatively tiny compared to their bigger, international-mined brethren and will ultimately need to expand externally.  AT Kearney’s study notes that the

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One of the few investment writers whose books I revisit frequently is Nassim Taleb, and I recommend ‘Fooled by Randomness’ as an accessible and amusing explanation of the misunderstood role of probability and randomness in markets and life in general. I first heard of him when he was profiled in a magazine as this oddball trader who was happy to continuously lose small amounts of money by placing out of the money puts on the markets, in expectation of periodic huge gains that would deliver profits by the dumper truck load. I immediately admired his tenacity and sheer self-confidence. When his first book, ‘Black Swans’ came out, I rushed to buy it. His strategy is one I have followed for much of this year and indeed last, very profitably. Taleb’s crucial insight was that the market systematically underestimated the probabilities of large negative price movements (so called ’six …

One of the few investment writers whose books I revisit frequently is Nassim Taleb, and I recommend ‘Fooled by Randomness’ as an accessible and amusing explanation of the misunderstood role of probability and randomness in markets and life in general. I first heard of him when he was profiled in a magazine as this oddball trader who was happy to continuously lose small amounts of money by placing out of the money puts on the markets, in expectation of periodic huge gains that would deliver profits by the dumper truck load. I immediately admired his tenacity and sheer self-confidence. When his first book, ‘Black Swans’ came out, I rushed to buy it. His strategy is one I have followed for much of this year and indeed last, very profitably. Taleb’s crucial insight was that the market systematically underestimated the probabilities of large negative price movements (so called ’six …

Poll: Hedge Funds Doomed?Poll: Is the Hedge Fund Industry Doomed?I recently began a poll within a Linkedin.com discussion group on the hedge fund industry and whether it was doomed or will be well positioned for great growth after this crisis passes. Below are the numerous comments from investment professionals on this topic - please feel free to add yours below within the comments sections:___________Hedge funds are the new Investment Banks. Say goodbye to 2 and 20, but I for one believe that they are positioned to evade the coming regulatory maelstrom and over the next four years will outperform the market. Thats just my two cents though.________Falling markets and tighter regs will show if there is actually any alpha at all.If there is then hedge funds will surely recover. If there isn't then they don't really ...

A chronology of the recent global market chaos:

September 14/15 - Investment bank Lehman Brothers Holdings files for bankruptcy protection; Merrill Lynch to be taken over by Bank of America Corp.

September 16 - U.S. Federal Reserve announces plan for $85 billion (49 billion pound) loan to American International Group in return for an 80 percent stake in the insurer; Barclays buys parts of Lehman’s North American assets for $1.75 billion.

September 17 - British bank Lloyds TSB Group agrees to rescue rival HBOS, scooping up Britain’s biggest home loan lender in an all-share deal.

September 19 - U.S. Treasury Secretary Henry Paulson calls for the government to spend billions of dollars to take toxic mortgage assets off financial companies. Stock markets soar.

September 20 - Details emerge of the $700 billion U.S. plan.

September 21 - Goldman Sachs Group and Morgan Stanley become bank holding companies regulated by the Fed.

September 22 - Nomura Holdings says

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As the WSJ reported today, the collapse of Lehman Brothers and the sale of Merrill Lynch to Bank of America is just the latest chapter in a stunning redesign of the financial world.  Stand-alone investment banks are dying rapid deaths, with three down in 2008 already (who can forget the spectacular demise of Bear Stearns?).  In their place, a new king is rising - commercial banks.

The key difference between an investment bank and a commercial bank is the source of their cash flow.  A commercial bank like Bank of America or Wachovia takes consumer deposits, which are insured by the federal government to prevent depositors from pulling out all at once (a major catalyst of the Great Depression in the 1930s that is now prevented by tighter regulation and insurance).  Investment banks take no such deposits, and as a result benefit from lighter government

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We are continuing our Hold on Banco Bradesco S.A. (or Bradesco) (BBD), but cutting our target price to $19. In its second quarter report, Bradesco posted net earnings before nonrecurring items of R$2,002 million, up 11% year-over-year, but below our estimate due to a higher-than-expected effective tax rate.

Despite this, we are maintaining our 2008 EPADS estimate at $1.60 and raising our 2009 estimate to $1.90 from $1.88, due to a change in our FX assumptions from depreciation of the US$ against the Brazilian real. Revenues should benefit from growth in the lending portfolio, though net interest margins are declining and loss provisions should rise. We believe the $0.61 indicated dividend, which provides a 3.3% yield, is safe.

As a result of better economic conditions, the Brazilian credit business has been growing, and Bradesco has been able to take advantage of this improved economic environment. Due to Bradesco’s successful segmentation

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Even as stocks continue to rally on the back of financial stocks, we keep getting more and more evidence that shows that we are still in the midst of a serious and worsening housing crisis that hasn’t finished playing out yet.

In a report issued yesterday 08/14/08, Realtytrac, a company that tracks foreclosures, said that foreclosures rose fifty-five percent in July 2008, compared to July 2007. The foreclosure activity in July also represented an eight percent sequential growth from June 2008.

In July 2008, more than 272,000 homes received at least one foreclosure notice. In July of last year, the number was 175,000.

As more and more houses go into foreclosures, retail banks will be hit with more losses. As it stands, Wall Street firms have already lost a very lucrative business, that of packaging mortgages and reselling them as securities. We also know that banks are making less loans, so their

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The Independent Tuesday, 1 July 2008 Bankers were thought to be facing tough times after the credit crunch. But in Moscow, where business is booming, Brits are being attracted by soaring salaries. By Jason Corcoran and Nick ClarkIt has been a very good year to be Russian. The national football team sparkled at Euro 2008, it secured the unrivalled musical accolade of winning the Eurovision Song Contest, and while the markets around the world disintegrate, its own economy has continued to boom.Soaring consumer spending, oil past $140 a barrel, record numbers of mergers and acquisitions (M&A) and a high growth rate means the financial focus is firmly on Russia in 2008.Investment bankers in the West are charging to Moscow to cash in on the rise of lucrative takeover deals, as London and New York have increasingly become graveyards for the ...