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New banks probe, but ABN to sell stake

Friday, May 22, 2015 - 02:05

With the bill globally for banks' misconduct now topping $235 billion, the UK financial markets watchdog is launching a new probe into bank fees for mergers and bond and share sales. But in a sign of recovery for the sector, the Netherlands is to sell a stake in ABN Amro. Ivor Bennett reports.

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Regulators, it seems, have a taste for blood. The UK's financial markets watchdog now setting its sights on bank competition. Poised for the first time to scrutinise the billions in fees banks charge for arranging mergers, and selling bonds and shares. Bad for the banks, but not everyone, says Charles Stanley's Jeremy Batstone-Carr. (SOUNDBITE) (ENGLISH) CHIEF ECONOMIST AND DIRECTOR AT CHARLES STANLEY, JEREMY BATSTONE-CARR, SAYING: ''There are still major issues besetting the banking sector, not just in the UK, but also in Europe. Which is probably why the sector looks so cheap on valuation grounds. There are a lot of strategists saying 'My goodness me, banks stack up so well on valuation metrics, isn't this the time to get involved?'' Bankers though will be more nervous. The business accounted for a third of the 90 billion dollars earned globally in fees last year. The new regulation could change that. Banks are already struggling to rebuild capital after a series of record-breaking fines. This week's near-6-billion-dollar penalty for six banks for rigging forex markets just a drop in the ocean compared to total payouts over the last 7 years. 20 of the world's biggest banks paying more than 235 billion dollars between them. An amount equivalent to Portugal's annual economy. But still not enough for some, says Reuters banking correspondent Steve Slater. (SOUNDBITE) (ENGLISH) REUTERS BANKING CORRESPONDENT, STEVE SLATER, SAYING: "They say there's not enough personal responsibility among senior managers, and also there's no real deterrent for the wrongdoing. No-one's really gone to jail in many countries, so a lot of the traders don't really see it as a major deterrent." But in one milestone on the road to recovery for Europe's banking industry, the Netherlands says it's to sell a stake in ABN Amro. The giant Dutch bank was nationalised after the financial crisis. A 30 percent share worth around four and half billion euros is to go on sale as early as the fourth quarter of this year. The decision paves the way for one of the largest bank flotations in years - the government valuing the bank at about 15 billion euros

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New banks probe, but ABN to sell stake

Friday, May 22, 2015 - 02:05