Companies in the news
... and how they were assessed
Popolare di Vicenza/veneto Banca: Italian bank job
“Italy’s long-simmering banking crisis has erupted again” and is shaping up to be a “fiasco of the first order”, said Ambrose Evans-pritchard in The Daily Telegraph. The emergency rescue of two Venetian lenders, Banca Popolare di Vicenza and Veneto Banca, has blown a hole in new EU bailout rules that were supposed to protect taxpayers: they’ve been landed with a potential s17bn bill. So much for the eurozone’s swanky “new banking regime” – it has been “violated in its first major test”. The two banks are being wound down in a deal that separates the “good” parts of their loan books from the “bad”, said Nils Pratley in The Guardian. The “healthy” portion will be shoved into Italy’s largest retail bank, Intesa Sanpaolo, along with s5.2bn from the Italian government. The remaining loans will be placed in a “bad bank” backed by s12bn of state guarantees. Whatever happened to the golden rule that “all bondholders must be obliterated before taxpayers contribute”? One can see why EU regulators were happy to play ball with the Italian government, which argued that the “national interest” would be better served by protecting the local economy from a chaotic collapse, said the FT. Still, the episode raises big questions about the credibility of the EU’S banking union.
Lloyds Banking Group: haunted by HBOS
Five months after two former HBOS bankers were jailed for rooking small business customers in a £1bn fraud, the failed bank’s rescuer, Lloyds, is still up to its ears in the repercussions, said Jonathan Ford in the FT. The latest twist in the saga, which centres on a scam run out of HBOS’S Reading office between 2002 and 2007, is the claim by a senior police officer that Lloyds’ “reluctance to cooperate fully” with the subsequent investigation amounted to “a cover-up”. Lloyds refused to accept that a fraud had taken place, despite “overwhelming evidence to the contrary”, said Thames Valley Police Commissioner Anthony Stansfeld. He added that the “huge pressure” that whistleblowers had been put under by the bank’s lawyers was “disgraceful”. Lloyds is facing an “uphill battle” to resolve the scandal, which left 64 victims “cheated, defeated and penniless”, said Jill Treanor in The Guardian. The bank is “mired in a public battle” with TV celebrity Noel Edmonds, who accuses it of creating a “sham” compensation process. Lloyds has set aside £100m for redress, but Edmonds alone is seeking £73m. It looks like CEO António Horta-osório will have to dig a good deal deeper.
Holland & Barrett: oil play
Britain’s best-known health store chain, Holland & Barrett, has been snapped up for around £1.7bn by the Russian billionaire Mikhail Fridman, said Alistair Osborne in The Times – further proof that “you can’t keep a Russian oligarch down”. Prior to his move into cod liver oil, Fridman was more interested in the black stuff: a couple of years back, he had a go at buying a chunk of North Sea assets, before the British government put a stop to it “on Ukraine sanctions grounds”. This deal is “a new direction” for Fridman’s L1 investment vehicle, said Andy Critchlow on Reuters Breakingviews. Having shown him a “frosty welcome” in the past, the Government should be “thrilled” that he is taking on the 147-year-old high-street institution. It’s a “vote of confidence for UK retail at a time when such sentiment is looking a bit thin”.