Results of Stress tests - who sailed through and who needs more capital

The results of the SCAP were out on 7th May 2009 and the 19 Bank Holding Companies will require an additional 74.6 billion dollars to make the financial system sail through without collapse if the economic situation worsens.
Here's the summary of results:

Bank	Additional capital needed (billion dollars)
AmEx	0
BofA	33.9
BB&T	0
BNYM	0
CapOne	0
Citi	5.5
FifthThird	1.1
GMAC	11.5
Goldman Sachs	0
JPMC	0
KeyCorp	1.8
MetLife	0
Morgan Stanley	1.8
PNC	0.6
Regions	2.5
State Street	0
SunTrust	2.2
US Bancorp	0
Wells Fargo	13.7
Total	74.6

Top 10 Hedge fund management firms by assets under management

Bridgewater Associates	1
JPMorgan	2
Paulson & Co.	3
D. E. Shaw	4
Brevan Howard	5
Och-Ziff Capital Management	6
Man AHL	7
Soros Fund Management	8
Goldman Sachs	9
Renaissance Technologies	10

Hedge Fund Industry size falls sharply in last one year

From a peak of 1.93 trillion dollars in mid of 2008, the hedge fund industry size is reduced to merely 1.33 trillion dollars owing to the credit crunch and macro-economic situation.

The 'Funds of funds' industry has also come down sharply from 825 billion dollars in mid 2008 to 525 billion dollars at the end of first quarter of 2009.

The fall in assets size is partly due to trading losses and partly due to investors pulling out money from these funds.

These are the data from Hedge Fund Research (HFR) as available on in the publicly available news articles across the internet. Due to the ambiguity of the breadth of the hedge fund and the voluntary nature of data disclosure these may be different from those published by other research firms.

Top 10 global financial centres

As of March 2009, the following is the ranking of the top financial centres of the world as published by GFCI (Global Financial Centres Index):

The GFCI is published by City of London Corporation every March. The full report by GFCI can be found at ZYEN.

	Rank	GFCI rating
London	1	781
New York	2	768
Singapore	3	687
Hong Kong	4	684
Zurich	5	659
Geneva	6	638
Chicago	7	638
Frankfurt	8	633
Boston	9	618
Dublin	10	618

London, the financial hub of the world, has been at the helm since long time. London, also the banking centre of the world, has headquarters of more than 100 of European's 500 biggest companies.

The rise and fall and rise of oil prices

The oil prices have been very volatile lately. According to the data published by Energy Information Administration, U.S., the Europe Brent spot price has touched a daily average high of $143.95 per barrel on July 3, 2007 during the bull phase and then fallen to a low of $33.73 per barrel on Dec 26, 2008. The fall from the peak has been quite steep and was triggered with the slowdown in the demand of oil owing to the economic recession and credit crunch.

The chart below summarizes the journey of the oil prices.




























Source of Data: EIA

India's most reputable companies - 2009 Forbes ranking

Forbes has published the list of top 200 most reputable companies in world. The list is available at Forbes website.

In the list there were following 17 Indian companies with Tata group at the helm:

Company	Global Rank	Industry
Tata	11	Conglomerate
State Bank of India	29	Banking
Infosys Technologies	39	Computer
Larsen & Toubro	47	Construction/Engineering
Maruti Udyog	49	Automotive
Hindustan Unilever	69	Consumer Products
ITC Limited	95	Conglomerate
Canara Bank	102	Banking
Hindustan Petroleum	111	Energy
Indian Oil	112	Energy
Wipro	116	Computer
Reliance Group	132	Conglomerate
Mahindra & Mahindra	137	Automotive
Bharti Airtel .	163	Telecommunications
Bank of Baroda	174	Banking
Bharat Petroleum	175	Energy
Punjab National Bank	177	Banking

Source: Forbes

Bank of America needs 34 billion USD to pass Fed's stress test

America's largest bank, Bank of America, is reported to require additional 33.9 billion USD to meet the capital target set by Federal Reserve during the stress test. The stress test also known as Supervisory Capital Assessment Program (SCAP) was conducted by Fed on 19 biggest financial institutions to find out the capital that will be required if the recession becomes deeper. The results of the test are expected to start coming from this week onwards. Speculation is rife that most of the banks will need additional capital to pass the test.

BofA had about 240 billion dollars of shareholder's equity capital as on 31st March 2009. This was about 10.3% of its total assets (2.3 trillion dollars). Since 2007 BofA has increased its shareholder's capital significantly to deal with the financial crisis and economic recession. However, if the macro-economic situation worsens in near term BofA would require still more capital as the results of SCAP of Fed would show.

According to a ews article by UK's 'The Guardian', BofA could sell a part of its stake in Chinese bank 'China Construction Bank' (CCB). The stake sale could fetch BofA about 8 billion USD. Even with this sale, BofA will have to garner the remaining 26 billion USD from other sources. In case of no other option left, it may have to convert some of the government's prefferred shares to common shares, thereby diluting the existing shareholder's stake.

Small banks continue to fail in US

Three banks have been reported to fail in the first day of May taking the total number of bank failure in this year 2009 to 32 in just 4 months and 5 days. The banks to fail this month were:
1. America West Bank, Layton

2. Citizens Community Bank, Ridgewood
3. Silverton Bank, N.A., Atlanta

The news was updated on FDIC's website on 5th May. The biggest of the three is Silverton with about 4 billion assets. The bank, on its website, has put up the following notice:

"Silverton Bank, N.A. is participating in the FDIC's Transaction Account Guarantee Program. Under that program, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account through December 31, 2009. Coverage under the Transaction Account Guarantee Program is in addition to and separate from the coverage available under the FDIC's general deposit insurance rules. Accounts that sweep into overnight Fed Funds are not considered non-interest bearing; therefore, they will not be covered under the FDIC’s Transaction Account Guarantee Program."

FDIC has created a bridge bank, Silverton Bridge Bank, to take over the operations of Silverton Bank. The bank will start its regular business from July 29, 2009.
The depositors will have the first priority followed by creditors and shareholders.

Details on the deposit insurance and other bank failure related information can be assessed from FDIC's website.

Top Bank holding companies in US by total domestic deposits

The biggest domestic deposit banks on June 30, 2008 as per the data published by FDIC were:

Bank Name	Deposits (Jun 2008) billion $
BoA Corp	701.5
JP Morgan Chase	497.2
Wachovia	422.0
Wells Fargo	293.4
Citigroup	271.3
US Bancorp	127.8
Suntrust Bank	115.6
National City Corp	97.8
RBS	95.3
Toronto-Dominion Bank	89.8

Of these the last two were foreign banks. In all there were 12 foreign banks in the top 50 list.

	Bank Name	Deposits (Jun 2008) billion $
1	RBS Group	95.3
2	Toronto-Dominion Bank	89.8
3	HSBC Holdings	83.0
4	Banco Santander	53.8
5	BNP Paribas	43.9
6	Mitsubishi UFJ	42.0
7	BBVA	39.4
8	Allied Irish Bank	36.5
9	Bank of Montreal	29.1
10	UBS	24.4
11	Royal Bank of Canada	17.8
12 Source:	Deutsche Bank FDIC	15.2

47 Indian companies in Forbes 2000 List

The following 47 companies have figured into the Forbes 2000 list:

Company	Sector
Reliance Industries	Oil & Gas Operations
SBI	Banking
ONGC	Oil & Gas Operations
IOCL	Oil & Gas Operations
NTPC	Utilities
ICICI Bank	Banking
Tata Steel	Materials
Bharti Airtel	Telecommunications
SAIL	Materials
Reliance Communications	Telecommunications Services
L&T	Capital Goods
BPCL	Oil & Gas Operations
BHEL	Capital Goods
HDFC	Banking
TCS	Software & Services
Hindalco Industries	Materials
HDFC Bank	Banking
DLF	Diversified Financials
Infosys Technologies	Software & Services
Punjab National Bank	Banking
ITC	Food, Drink & Tobacco
Wipro	Software & Services
Bank of India	Banking
HPCL	Oil & Gas Operations
GAIL (India)	Utilities
NMDC	Materials
Canara Bank	Banking
Power Grid of India	Utilities
Tata Motors	Capital Goods
Bank of Baroda	Banking
Power Finance	Finance
Axis Bank	Banking
Union Bank of India	Banking
Grasim Industries	Construction
Indian Overseas Bank	Banking
Sun Pharma Industries	Drugs & Biotechnology
Mahindra & Mahindra	Consumer Durables
Allahabad Bank	Banking
Indian Bank	Banking
Syndicate Bank	Banking
IDBI Bank	Banking
Central Bank of India	Banking
Jindal Steel & Power	Materials
National Aluminium	Materials
Oriental Bank of Commerce	Banking
UCO Bank	Banking
Hero Honda Motors	Consumer Durables

Rank	Companies	Sales (b $)
121	Reliance Industries	34.03
150	State Bank of India Group	22.63
152	Oil & Natural Gas Corp	24.04
207	Indian Oil Corp Ltd	51.66
317	NTPC	9.63
329	ICICI Bank	15.06
463	Tata Steel	32.77
508	Bharti Airtel	6.73
582	Steel Authority of India	9.82
689	Reliance Communications	4.26

Forbes global 2000 list is published every year and takes into consideration the assets, sales, profits, and market capitalization of the corporations.

Source: Forbes

Financial institutions with highest revenues in world

Once again from the Forbes 2000 list(published on 8th April 2009), the biggest turnover companies in the Financial services domain are as follows:

	Company	Industry	Sales ($bil)
1	ING Group	Insurance	213.99
2	Fortis	Diversified Fin.	164.37
3	AXA Group	Insurance	156.95
4	HSBC Holdings	Banking	142.05
5	Allianz	Insurance	127.24
6	Deutsche Bank	Diversified Fin.	124.78
7	Generali Group	Insurance	118.39
8	Bank of America	Banking	113.11
9	BNP Paribas	Banking	107.96
10	Berkshire Hathaway	Diversified Fin.	107.79
11	Crédit Agricole	Banking	107.75
12	Citigroup	Banking	106.66
13	JPMorgan Chase	Banking	101.49
14	Société Générale	Banking	99.25

While the world's top three companies Royal Dutch Shell, ExxonMobil, and Wal-Mart have annual sales more than 400 billion dollars, the biggest financial institution, insurance major - ING Group generates about half the revenues. In the banking sector this is even lower with the biggest being HSBC holdings at 142 billion dollars.
For the complete list of 2000 companies, please visit Forbes.

Top 10 banks by assets (2009)

About two months back when I had tried compiling a list of world's top banks by asssets, the task was not easy. The main reasons being that full year results of all companies were not out. Also, all the firms don't report their numbers in dollars using a point-in-time exchange rates was debatable. However, recently Forbes had published the list of world's top 2000 companies. Great!, so now I know who stands where without much efforts :). If we go by the Forbes numbers (which I beleive should be correct), the top 10 companies in the whole world when put in the order of their balance sheet size are as follows:

Rank	Company	Country	Assets ($bil)
1	Royal Bank of Scotland	United Kingdom	3491
2	Barclays	United Kingdom	2948
3	Deutsche Bank	Germany	2947
4	BNP Paribas	France	2889
5	HSBC Holdings	United Kingdom	2520
6	JPMorgan Chase	United States	2175
7	Crédit Agricole	France	2064
8	Citigroup	United States	1939
9	Mitsubishi UFJ Financial	Japan	1931
10	UBS	Switzerland	1899

No surprise these are all banks or financial institutions. Banks have a slightly different way of accounting and the public deposits form a significant part of their assets. As a matter of fact in the top 50 companies only two companies, GE(ranked 28th) and Deutsche Post (ranked 49th), are outside the financial domain. While GE's presence in top 50 was expected, Deutsche Post at 49th position was a bit of surprise for me.

For the complete list of 2000 companies, please visit Forbes.
Source: Forbes, Google Finance, Reuters.

Top 10 banks of the world by market capitalization (April 2009)

Bank	Country	Mkt Cap on Apr 30, 2009
Indl & Coml Bank of China	China	197
China Construction Bank	China	133
JP Morgan Chase	US	124
HSBC	UK	123
Bank of China	China	120
Wells Fargo	US	85
Banco Santander	Spain	73
Mitsubishi UFJ Financial	Japan	63
Goldman Sachs	US	59
Bank of America	US	57