| As of
the end of Q3, estimations are for a total of nearly $20 billion in
write-downs by major banks and securities firms. This amount is less
than the actual losses because they are tallied by deducting fees,
offsetting hedges, and gains earned. |
|
Deutsche Bank's profit may be reduced by up to 1.7 billion euros
($2.4 billion). This is because loans have dwindled in value during
the credit market crisis. Chief Executive Josef Ackermann said the
bank had a rocky Q3. He noted an upcoming revaluation of 29 billion
euros of credit it had promised to clients. |
| These
loans would usually be parceled out to other banks. However it has
become harder to sell debt in the midst of the credit squeeze. The
bank will be required to write down the value of these loans. |
| Reportedly
the bank is estimating that the credit is now worth 4% to 6% less
than its face value. |
| This write
down will decrease profit by up to 1.7 billion euros booked during
Q3. The third quarter of 2006, Deutsche Bank earned a net profit of
1.2 billion. |
| One of the
world's biggest M&A banks, Deutsche is working to have clients
renegotiate credit terms or terminate deals. |
|
| Chairman
and chief executive officer of Merrill Lynch Stan O’Neal
reported, "Despite solid underlying performances in most of our
businesses in the third quarter, the impact of this difficult market
was much more severe in certain of our FICC businesses than we
expected earlier in the quarter... While market conditions were
extremely difficult and the degree of sustained dislocation
unprecedented, we are disappointed in our performance in structured
finance and mortgages. We can do a better job in managing this risk,
as we have done with other asset classes, including leveraged
finance, interest rate and foreign exchange trading, equity trading,
principal investments and commodities". |
|
Merrill Lynch reports that,
"Write-downs of an estimated $4.5 billion, net of hedges, related to
incremental third quarter market impact on the value of CDOs and
sub-prime mortgages. These valuation adjustments reflect in part
significant dislocations in the highest-rated tranches of these
securities which were affected by an unprecedented move in credit
spreads and a lack of market liquidity in these securities, which
intensified during the third quarter. During the quarter, the
company significantly reduced its overall exposure to these asset
classes." |
|
Merrill Lynch further stated
that, "Write-downs of an estimated $967 million on a gross basis,
and $463 million net of related underwriting fees, related to all
corporate and financial sponsor, non-investment grade lending
commitments, regardless of the expected timing of funding or
closing. These commitments totaled $31 billion at the end of the
third quarter of 2007, a net reduction of 42% from $53 billion at
the end of the second quarter. The net losses related to these
commitments were limited through aggressive and effective risk
management, including disciplined and selective underwriting and
exposure reductions through syndication, sales and transaction
restructurings. |
|
Merrill Lynch owns approximately
half of BlackRock which has over $1 trillion in assets under
management. |
|
|
Washington Mutual, Inc. announced
that weakening housing markets as well as disruptions in secondary
markets will cause a decline in net income of approximately 75% from
Q2 2007. This projection is subject to finalization of Q3 results. |
|
Washington Mutual provided
preliminary information about its Q3 results before its scheduled
earnings announcement. This was done, it said, in view of impacts
from a very challenging market environment. No further details will
be made available regarding company Q3 results before its regularly
scheduled earnings release on October 17, 2007. |
|
|