Daily Archives: November 21, 2008

Despite economic meltdown, Rothschild posts record profits

david_rothschild

Rothschild Investment Banking Posts Record Results: What’s Their Secret?

Seeking Alpha | Nov 20, 2008

by Ron Haruni

The inability of the current investment banking model to withstand the ongoing liquidity crisis has forced many investment bankers out of business or those few that have survived to get by on reduced or no bonuses this year. However, as lenders globally continue to write off and provision for a significant volume of soured loans, U.K.’s Rothschild group, one of the world’s leading investment banking organizations, has posted record results. The bank has been able to maintain its very strong performance again this year, despite the credit crunch, economic slowdown and the threat of a U.S. recession, with investment banking and corporate banking businesses both producing record revenues.

The bank, according to Timesonline – reported a 31%, 459 million euro, improvement in profits. In addition, record results from the organization’s advisory and private banking operations enabled the bank to pay record bonuses to its 2,700 people in June.

The bank’s chairman Davide de Rothschild, following unconventional investment banking strategies, has steered his organization clear of proprietary trading, prime broking and other activities that have devastated rivals as a result of an environment where asset prices keep falling while liabilities remain fixed. The bank however, still wrote off 96 million euro because of souring loans. At some point, considering the global financial system is galloping off a cliff – today’s difficulties in investment banking will prompt an overhaul of the system favoring those players that have shown themselves to be the most cautious during this cycle.

Alongside its pro-forma group-wide results, Rothschild also unveiled that it had entered into a co-operation agreement in the field of M&A and Equity Capital Markets advisory in the food and agriculture sectors on a global basis with Netherlands’ Rabobank, a premier global financial institution providing financing and other services to food and agri business clients around the world.

As part of the deal, notes Timesonline, Rabobank is buying a 7.5% stake in one of the key holding companies in the Rothschild empire, Rothschild Continuation Holdings, which owns the N M Rothschild business in the U.K.

Rabobank becomes the second biggest investor outside the Rothschild family after the trading group Jardine Matheson, which owns 20%. This is Rothschild’s second joint venture with a Dutch bank.

Rothschild advisory clients include Rio Tinto (RTP), which is fighting a hostile bid from BHP, Billiton (BHP), and British Energy in its deal with France’s power giant EDF, a deal that gives the French company a dominant role in the British nuclear industry.

Conrad Black asks George Bush for clemency

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Conrad Black leaves the Derksen Federal Courthouse after his sentencing hearing in Chicago December 10, 2007. A U.S. judge on Monday sentenced former media mogul Conrad Black to 6-1/2 years in prison for obstructing justice and defrauding shareholders of one-time newspaper publishing giant Hollinger International Inc.

Times Online | Nov 21, 2008

Conrad Black was sentenced to six years in prison for fraud

By Suzy Jagger in New York

Conrad Black, the peer who once owned The Daily Telegraph, has asked for a pardon from President Bush as part of a last ditch attempt to get out of jail early.

While American presidents are often swamped with appeals for clemency in their last days of office, it is unlikely Lord Black will be heard as the American economy provides ample distraction for George W Bush, especially as he is faced with the perils of bailing out white collar workers from their bad investment decisions.

Under the US Constitution, the president can grant pardons and shorten sentences. But it is highly unlikely that President Bush’s successor Barack Obama would grant clemency as a Democrat, fierce about white collar crime. Mr Obama takes office on January 20.

The Canadian-born peer has been in prison since March when he began serving a six and a half year sentence for defrauding shareholders of Hollinger International, the then owner of The Daily Telegraph newspaper. He is currently serving his sentence in a prison in Florida.
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Lord Black’s lawyers recently submitted legal bills to his former publishing company, some of which referred to work done in pursuit of a clemency plea.

The push for clemency comes after a federal appeals court unanimously upheld Black’s conviction this summer.

Black and three former colleagues were accused of swindling the company — once the world’s third largest publisher of English-language newspapers — out of $6.1 million by giving themselves illegal bonuses.

Rothschild pays out record bonuses to staff

Alongside its pro-forma group-wide results, Rothschild unveiled a joint venture with Rabobank of the Netherlands

Times Online | Nov 19, 2008

By Patrick Hosking

Not all investment bankers are having to get by on reduced or no bonuses this year. Rothschild group staff have received record bonuses, it has emerged after the bank reported a 31 per cent improvement in profits before tax to €459 million.

Record results from both its advisory and private banking operations enabled the bank to pay the bonuses to its 2,700 people in June.

david-rene-de-rothschildUnlike conventional investment banks Rothschild, whose chairman is Davide de Rothschild, has steered clear of proprietary trading, prime broking and other activities that have devastated rivals, although it still wrote off €96 million because of souring loans.

Rothschild’s year-end of March means the bonuses were paid before the most serious setbacks to banks. Most investment banks pay out bonuses between January and May. Goldman Sachs is due to tell its staff the size of their payouts in the next three weeks.

Alongside its pro-forma group-wide results, Rothschild unveiled a joint venture with Rabobank of the Netherlands, whereby the two sides will pool their staff and clients in the food and agriculture sector.

As part of the deal, Rabobank is buying a 7.5 per cent stake in one of the key holding companies in the Rothschild empire, Rothschild Continuation Holdings, which owns the N M Rothschild business in the UK.

Rabobank becomes the second biggest investor outside the family after the trading group Jardine Matheson, which owns 20 per cent. Rabobank’s vice chairman Sipko Schat joins the Rothschild board.

It is the second joint venture with a Dutch bank. Rothschild teamed up with ABN Amro for 11 years in equity capital markets before dissolving the arrangement when Royal Bank of Scotland took over ABN last year.

Rabobank’s stake was held in treasury by Rothschild after it bought it from the insurer Eagle Star. No price was put on the deal. Jardine paid $185 million for its 20 per cent in 2005.

Rothschild advisory clients include Rio Tinto, which is fighting a hostile bid from BHP, British Energy in its deal with EDF of France and Alliance & Leicester when it was sold to Banco Santander.

Thailand using royal law to suppress dissent

THAILAND

Thai King Bhumibol Adulyadej lays a kind of wood flower to be placed on the site of cremation during the Symbolic royal cremation for his late sister Princess Galyani Vadhana at the Royal Crematorium in Bangkok on November 15, 2008. Tens of thousands of Thais gathered in old Bangkok on Saturday for the cremation of Princess Galyani Vadhana, who died of cancer in January. In the central ceremony of the 6-day, $9 million funerary rites that provided a rare glimpse of the pageantry of the House of Chakri, the king lit symbolic candles in front of his sister’s sandal-wood casket at an ornate Buddhist pavilion.

AFP | Nov 19, 2008

BANGKOK (AFP) — Global media watchdog Reporters Without Borders has accused the Thai government of using strict laws protecting the monarchy from insults to suppress dissenting voices on the Internet.

Thailand’s communications minister last month said the government was considering spending millions of dollars on a firewall to block websites it deemed insulting to the deeply-revered royal family.

“As King Bhumibol Adulyadej is very popular, being over-protective of his image is one of the ways the government is using to win over those calling for its (the government’s) overthrow,” Reporters Without Borders said.

“The Thai government’s desire to control online content is indicative of the difficulties it is encountering in recovering some support,” the Paris-based group said in the statement released late Tuesday.

Thailand’s communications minister Mun Patanotai said Wednesday that his ministry had already closed down “a considerable number of websites” and vowed to boost the crackdown.

“We will intensify measures to allow any telecommunications official to shut down websites immediately if they think it’s insulting the monarchy. They don’t have to wait for official confirmation,” Mun told reporters.

He said, however, that the software needed to block the websites would cost three million baht (about 86,000 dollars), significantly less than the 14 million dollars initially slated.

The royal family’s role in politics has been a touchy subject in recent months as street protests by an anti-government group claiming loyalty to the monarchy drag on. The king has not commented on the recent turmoil.

The army chief and premier have recently accused unnamed groups of defaming the royals, a grave crime in Thailand that carries a maximum jail sentence of 15 years, but which media groups say is often used as a political tool.

Thailand made headlines around the world last year when it blocked the popular video-sharing website YouTube after clips started appearing mocking the deeply-revered King Bhumibol.

This and similar moves to implement tougher laws controlling cyberspace prompted press watchdogs to warn of increasing censorship after the coup that overthrew prime minister Thaksin Shinawatra in 2006.

Thaksin’s allies returned to government in December 2007, prompting his detractors to take to the streets in May this year.

Both pro- and anti-government sides have accused each other of slighting the royals and earlier this month Sulak Sivaraksa, a well-known academic and critic of Thaksin, was arrested on suspicion of insulting the monarchy.

Queen Elizabeth inducts Shimon Peres into the Order of St Michael and St George

shimon-peres-wears-the-honourary-knight-commanders-order-of-st-michael-and-st-george

LONDON – NOVEMBER 20: In this handout image provided by the GPO (Government Press Office), Israeli President Shimon Peres wears the honourary Knight Commander’s Order of St Michael and St George (KCMG), presented to him by Queen Elizabeth II at Buckingham Palace on November 20, 2008 in London, England.

Peres praises Britain as democratic role model after being knighted

UK protestors call Peres ‘war criminal’

President joins ranks of distinguished world leaders in receiving honorary knighthood from Britain’s Queen Elizabeth II, urges Prince Charles to aid efforts to secure Red Cross visit for Shalit

YNET | Nov 20, 2008

by Hagit Klaiman

LONDON – Her Majesty Queen Elizabeth II bestowed an honorary knighthood on Israeli President Shimon Peres on Thursday. Peres, a Nobel Peace Prize laureate, was escorted into Buckingham Palace by the Queen’s Guard and the Household Cavalry.

The Queen stepped towards Peres and shook his hand before appointing him Knight Grand Cross of the Most Distinguished Order of St. Michael and St. George (KCMG) – the United Kingdom’s sixth highest honor. As Peres is not a subject of the Commonwealth, he did not kneel upon receiving the honor and may not employ the title ‘sir.’
BRITAIN/
Britain’s Queen Elizabeth receives Israel’s President Shimon Peres, and presents him with the order of St Michael and St George, at Buckingham Palace, in central London November 20, 2008.

After the ceremony the Queen met Peres in private. The president briefed the monarch on the current security situation in Israel, with the Queen taking a particular in interest in Sderot and the Gaza-vicinity communities.

The Queen also shared details of the planned London economic conference, which is set to take place after US President-elect Barack Obama takes office.

Peres used the opportunity to praise the cooperation between Britain and Israel, saying: “You learned from the bible, and we learned from your democracy. There is in our hearts a little criticism of Britain, but a great deal of regard towards English democracy.”

‘Democracy? It’s so tiring!”

The president even earned a laugh from the Queen by quoting the words of the late PLO leader, Yasser Arafat, in saying: “Democracy, my God, who invented it? It is so difficult, so tiring!”

Peres then added: “We were not born to lord over others, or to occupy. One of the greatest triumphs of the 20th century was the liberation of women from servitude to men. To my Arab friends I say as well that the occupation of men must end so as to allow progress and development.”

The president did not go empty handed, and one of the presents he brought the Queen is a letter written by her father, King George VI, in which he recognized the newly-founded State of Israel.

“I believe that the British leadership is very amiable towards Israel,” said Peres with the culmination of the ceremony, adding that he sees the honor bestowed upon him as a testament to the friendship between the two countries.

“The knighthood was a public declaration of support. This is the first time an Israeli figure has been knighted, it was without a doubt a gesture of friendship.”

Peres urges Charles on Shalit

Later in the evening Peres met with Prince Charles. The two discussed the matter of kidnapped Israeli soldier Gilad Shalit, and Peres urged his host to help secure a visit with Shalit by Red Cross representatives.

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Britain’s Prince Charles (L) receives Israel’s President Shimon Peres with a firm Masonic grip at Clarence House in London November 20, 2008.

Since being abducted into Gaza by Palestinian gunmen in June 2006, Shalit has received no visitors and no one has verified his health of conditions of imprisonment.

“I know you have warm ties with many leaders in the Middle East,” Peres told the prince, and urged him to help the Red Cross visit take place.

The two also discussed the current situation in Israel, the ongoing peace process with the Palestinian Authority, the Iranian nuclear threat and cooperation on various environmental projects Prince Charles is promoting.