New criteria set out by the Bank of Spain will have a binding nature for supervised financial entities

Introduction

On 30 April 2013 the supervisory body of the Bank of Spain sent a formal communication to the financial entities subject to its supervision containing the criteria to be used with regard to the definition, documentation, follow-up and review of credit refinancing and restructuring transactions (the Communication).

These criteria set forth by the Bank of Spain are a step further to Circular 4/2004 and Circular 6/2012 regarding financial information and models on financial statements applicable to banks and other credit entities (please see Client Alert 1043 of 10 June 2010, ‘The Spanish Central Bank Proposes to Toughen Risk Management Principles and Provision Requirements to Financial Entities’).

The Communication

The Bank of Spain has produced the criteria as a reaction to the heterogeneity observed among financial entities with regard to the accounting treatment of such refinancing and restructuring transactions. The Bank of Spain has been able to gather such evidence as a result of the obligation it introduced in its Circular 6/2012, of 28 September, in which it requested financial entities to provide information on refinancing transactions in the notes to their financial statements.

The objective of the Communication is two-fold: (i) to reinforce debt restructuring policies by introducing criteria ensuring a rigorous treatment of risk by financial entities; and (ii) to make sure that the differences existing among financial entities regarding refinancing operations respond to genuine differences of their business models rather than to different interpretations of Circular 4/2004 and other applicable regulations.

The Communication has a binding nature upon the supervised financial entities. Such entities shall moreover subject their current accounting treatment of restructuring and refinancing transactions to an individual review under the criteria set out in the Communication and shall submit a report to the Bank of Spain’s Inspection Services presenting their conclusions before 30 September 2013.

Debt refinancing and restructuring policies

In the Communication, the Bank of Spain acknowledges that debt refinancing and restructuring constitute adequate credit risk management instruments, which shall be deployed by financial entities according to the following criteria:

• The decision to grant refinancing or restructuring shall be based on an individual analysis of the current income sources of the debtor, which is meant to enable financial entities to determine the debtor’s real repayment capacity on the basis of its recurring, sufficient and verifiable income. Such income shall be sufficient to cover both the refinanced or restructured debt, as well as any other debt previously assumed by the debtor. In addition to the criteria set out in Circular 4/2004, financial entities shall take into account the debtor’s payment records as well as any previous experiences with the debtor, particularly those relating to past debt refinancing or restructuring.
• The terms and conditions of any debt refinancing or restructuring transaction shall be based on a realistic repayment scheme agreed in accordance to the debtor’s payment capacity and the general economic situation. In this sense, such transactions shall be preferably structured by means of periodic

  Article source: http://www.lexology.com/library/detail.aspx?g=8f7976dc-d931-4d0d-b23d-687660217452

(The following statement was released by the rating agency)
FRANKFURT/LONDON, May 24 (Fitch) Fitch Ratings has affirmed
Germany-based
Wuestenrot Bausparkasse AG’s (BSW) and its sister bank
Wuestenrot Bank AG
Pfandbriefbank’s (WBP) (collectively Wuestenrot Bausparbank)
Long-term Issuer
Default Ratings (IDRs) at ‘BBB+’. The Outlooks on the Long-term
IDRs have been
revised to Stable from Negative. At the same time, the agency
downgraded the
banks’ Viability Ratings (VRs) to ‘bbb’ from ‘bbb+’. Fitch
upgraded BSW’s and
WBP’s Support Ratings to ’2′ from ’3′ based on a change in
approach from
sovereign support to institutional support. The banks’ Support
Rating Floors
(SRFs) have been affirmed at ‘BB+’ and simultaneously withdrawn.
The Short-term
IDRs have been affirmed at ‘F2′. A full list of rating actions
is at the end of
this release.
BSW and WBP are closely linked and operate to a large extent as
a single
economic entity, the ‘Wuestenrot Bausparbank’. This is in
particular underpinned
by a common management team and the sharing of essential
functions such as
treasury and risk management, which contributes to an alignment
of IDRs and VRs.
Standalone, Fitch notes, WBP would probably not receive an
investment grade VR
due to its small size in competitive residential mortgage
lending and retail
funding markets and its dependence on BSW, as it is a net
receiver of internal
group services. However, BSW and WBP have to be kept as legally
separate
entities because BSW’s protective building society
(Bausparkasse) status
prevents it from taking over WBP’s covered bond (Pfandbrief)
licence and
business.
The affirmation of both banks’ Long-term IDRs, the revision of
the Outlooks to
Stable from Negative and the upgrade of the banks’ Support
Ratings to ’2′ from
’3′ are a result of Fitch’s assessment that the ability of
Wuestenrot
Wuerttembergische AG (WW AG; ‘BBB+’/Stable), the 100% owner of
both banks, to
provide support to its bank subsidiaries has improved. The
improved ability is
the result of both continued strength of the group’s insurance
businesses and
the reduced risk (and therefore potential size of any support
that may be
needed) at the banks. Fitch continues to assess WW AG’s
willingness to provide
support to its core bank subsidiaries as very strong.
Fitch’s SRFs are reserved for those financial institutions whose
support rating
is based on sovereign support. BSW’s and WBP’s SRFs have been
withdrawn because
they are no longer considered to be relevant to the agency’s
coverage given that
the banks’ Support Ratings are now based on institutional
support rather than
sovereign support. Prior to withdrawal, Fitch affirmed BSW’s and
WBP’s SRFs at
‘BB+’ based on our assumption of a moderate likelihood that
sovereign support
for the banks would be forthcoming in case of need. This
assumption is unchanged
and reflects both banks’ significant retail deposit base, their
role as
residential mortgage lenders and WBP’s status as a Pfandbrief
issuer.
The downgrade of BSW’s and WBP’s VRs to ‘bbb’ from ‘bbb+’ are
driven by the
continued, and in Fitch’s view likely prolonged, low interest
rate environment,
which has a

Article source: http://www.reuters.com/article/2013/05/24/fitch-affirms-wuestenrot-banking-entitie-idUSFit65876920130524

Capital Stage AG …

Hamburg, 24 May 2013 – Capital Stage AG, Hamburg (ISIN: DE0006095003 // WKN: 609 500), generated revenues of 8.5 million euros in the first quarter of 2013 (2012: 6.3 million euros) and according to IFRS achieved, including other income, group earnings before interests, taxes and depreciations (EBITDA) of 11.0 million euros (2012: 2.9 million euros).

EBIT amounts to 6.1 million euros (2012: 0.5 million euros). Earnings before taxes (EBT) reached 3.2 million euros (2012: -1.5 million euros). The income tax liability was 0.9 million euros (2012: 0.3 million euros). The resultant period surplus for the group according to IFRS amounts to 2.3 million euros (2012: -1.8 million euros). Earnings per share are 0.05 euros (2012: -0.05 euros). 

About Capital Stage AG:

Since 2009, Capital Stage has acquired solar power plants and wind farms in Germany and Northern Italy with a capacity totalling 193 MW, making it Germany’s biggest operator of solar farms. Its solar and wind farms generate attractive returns and recurring income, while offering a moderate level of investment risk.

Capital Stage AG is listed in the Prime Standard segment at the Frankfurt Stock Exchange (ISIN: DE0006095003 / WKN: 609500).

Article source: http://www.4-traders.com/CAPITAL-STAGE-AG-436208/news/Capital-Stage-AG-significantly-improves-results-in-first-quarter-16907623/

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May 23, 2013

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The biggest growth was seen in the company’s wealth investment business, which recorded an increase in adjusted operating profit of 31%, up to 50.7 million pounds. Specialist banking was close behind, with a rise of 30%, at 224 million pounds, but asset management only managed 4.8%, up to 140 million pounds.

The company reported that its overall results have been adversely affected by a 13% depreciation of the Rand against Sterling over the course of the year. But the company said that a significant drop in impairments enabled its Australian business to return to profitability, and that results from its UK business were “slightly ahead” of the prior year.

Adjusted earnings per share was up just over 28%, at 37 pence, and the board is recommending a final dividend of 10 pence, bringing the full-year dividend to 18 pence, an increase of almost 6%.

Commenting on the results Stephen Koseff, Investec’s chief executive officer, said:

I am encouraged by the progress we have made over the past few years in realigning our business model. Our capital light businesses now account for 49% of the group’s operating profit, providing a sustainable base for our recurring income. We have continued improving our efficiencies, streamlining our processes, eliminating duplication and building scale, notably in our Specialist Banking businesses. 

Maintaining a sound balance sheet while driving growth in our return ratios remains a key focus. Our priority is to ensure each division and geography achieves an appropriate return. The recent improvement in equity markets bodes well for our business and we are well positioned to take advantage of a sustained market upturn.

Shareholders in Investec have enjoyed an increase in share price of just over 60% since this time last year. Better still, they’re also getting a dividend yield of around 3.7%, which is forecast to rise to just over 4% in 2014.

If you’re looking for some high-quality investment opportunities, you should definitely check out the latest free Motley Fool report – “5 Shares to Retire On.” This report contains five top long-term share selections from our team of expert analysts here at the Motley Fool.

Get hold of your FREE copy today.

Article source: http://www.fool.com/investing/general/2013/05/23/investec-reports-a-21-rise-in-operating-profit.aspx

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IGB Corp Bhd’s managing director Robert Tan Chung Meng is mulling several “big projects” with the cash raised from its retail mall real estate investment trust (REIT) — possibly including another sizeable project in Johor and one in London — but is keeping his cards close to his chest.

“I can tell you a juicy story now if I’m not bound by the law. So I’ll need to tell the Securities Commission first before telling the world. That’s why I do not usually grant interviews nowadays,” says Tan with a laugh, sitting up as he chooses his next words like a man guarding a treasure.

Unlike most developers, IGB Corp, the builder

Article source: http://www.theedgemalaysia.com/highlights/239875-highlight-all-in-good-time.html

… and the improvement in equity markets bodes well for Investec plc (LON:INVP).

Investec (LSE: INVP) — the South Africa based international specialist bank and asset manager — is currently down over 4%, despite revealing a 21% increase in its adjusted operating profit in its final results for the year to 31 March 2013.

The biggest growth was seen in the company’s wealth investment business, which recorded an increase in adjusted operating profit of 31%, up to £50.7m. Specialist banking was close behind, with a rise of 30%, at £224m, but asset management only managed 4.8%, up to £140m.

The company reported that its overall results have been adversely affected by a 13% depreciation of the Rand against Sterling over the course of the year. But the company said that a significant drop in impairments enabled its Australian business to return to profitability, and that results from its UK business were “slightly ahead” of the prior year.

Adjusted earnings per share was up just over 28%, at 37 pence, and the board is recommending a final dividend of 10 pence, bringing the full-year dividend to 18 pence, an increase of almost 6%.

Commenting on the results Stephen Koseff, Investec’s chief executive officer, said:

“I am encouraged by the progress we have made over the past few years in realigning our business model. Our capital light businesses now account for 49% of the group’s operating profit, providing a sustainable base for our recurring income. We have continued improving our efficiencies, streamlining our processes, eliminating duplication and building scale, notably in our Specialist Banking businesses. 

“Maintaining a sound balance sheet whilst driving growth in our return ratios remains a key focus. Our priority is to ensure each division and geography achieves an appropriate return. The recent improvement in equity markets bodes well for our business and we are well positioned to take advantage of a sustained market upturn.“

Shareholders in Investec have enjoyed an increase in share price of just over 60% since this time last year. Better still, they’re also getting a dividend yield of around 3.7%, which is forecast to rise to just over 4% in 2014.

If you’re looking for some high-quality investment opportunities, you should definitely check out the latest free Motley Fool report — “5 Shares To Retire On”. This report contains five top long-term share selections from our team of expert analysts here at the Motley Fool.

Get hold of your FREE copy today.

Jon doesn’t own shares in Investec.

Article source: http://www.fool.co.uk/news/investing/company-comment/2013/05/23/investec-plc-reports-a-21-rise-in-operating-profit.aspx

International specialist bank and asset manager Investec has announced its results for the year ended 31 March 2013.

Highlights

• Operating profit before goodwill, acquired intangibles, non-operating items and taxation and after non-controlling interests (adjusted operating profit) increased 20.8% to GBP(£)433.2 million (2012:£358.6 million).
• The Asset Management and Wealth Investment businesses benfitted from higher levels of average funds under management and net inflows in excess of £4.9 billion.
• The Specialist Banking business incurred lower impairments than the prior year, whilst operating profit before impairments declined marginally.
• The South African business reported an increase in operating profit of 13.4% in rand terms benefiting from growth in revenue and fixed cost containment.
• The Australian business returned to profitability as a result of a significant decline in impairments.
• The UK business reported results slightly ahead of the prior year.
• Overall group results have been negatively impacted by the depreciation of the average rand: pounds sterling exchange rate of approximately 13% over the year.
• Recurring income as a percentage of total operating income amounts to 68.6% (2012: 67.7%).
• Impairments have decreased by 22.8%, with the credit loss charge as a percentage of average gross core loans and advances improving from 1.12% at 31 March 2012 to 0.84%.
• The group had Tier one ratios of 11.0% for Investec plc (per Basel II) and 10.8% for Investec Limited (per Basel III). Liquidity remains strong with cash and near cash balances amounting to £9.8bn.

Business highlights – adjusted operating profit

• Asset Management: increase of 4.8% to £140.2mn (2012: £133.7mn)
• Wealth and Investment: increase of 30.9% to £50.7mn (2012: £38.7mn)
• Specialist Banking: increase of 30.1% to £242.3mn (2012: £186.2mn)
  

Investec CEO Stephen Koseff said: “I am encouraged by the progress we have made over the past few years in realigning our business model. Our capital light businesses now account for 49% of the group’s operating profit, providing a sustainable base for our recurring income. We have continued improving our efficiencies, streamlining our processes, eliminating duplication and building scale, notably in our Specialist Banking businesses.

“Maintaining a sound balance sheet whilst driving growth in our return ratios remains a key focus. Our priority is to ensure each division and geography achieves an appropriate return. The recent improvement in equity markets bodes well for our business and we are well positioned to take advantage of a sustained market upturn.”

Bernard Kantor, Managing Director of Investec said: ““Global markets remained volatile and challenging throughout most of our reporting period. The Rand depreciated 13% which impacted our results in Sterling terms. On a neutral currency basis our earnings increased 28% supported by net inflows of GBP4.9 billion in our asset management and wealth and investment businesses and a significant decline in
impairments in our banking businesses. We have a strong franchise which is recognised in all our markets and we continue to build business depth in our core areas of focus.”

Outlook

Investec states: “The broader economic environment continues to be volatile with a strong rally in global equity markets partially negated by weak conditions on the groundin Europe and the UK. The South African economy also has its challenges as

Article source: http://www.moneyweb.co.za/moneyweb-financial/investecs-sa-business-boosts-operating-profit-by-1?sn=2009%20Detail

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Yong (inset) says the company is in talks with potential tenants to take up the podium space in Tierra Crest at Kelana Jaya.

PETALING JAYA: Employing the “sell some and keep some” strategy in the properties Crest Builder Holdings Bhd construct, it sees itself venturing into retail space management with its latest investment property Tierra Crest and possibly the upcoming Dang Wangi light rail transit (LRT) redevelopment project, or aptly known as The Bank.

In an interview with StarBiz, executive director Eric Yong said: “We look at property investment as a whole package. We sell some and keep some.”

The second and latest addition to its investment property portfolio is Tierra Crest at Kelana Jaya.

The RM140mil project, which is going to house Unitar’s new main campus, the three-storey retail podium would be leased to food and beverage tenants and other peripheral businesses that would serve its immediate community, he said.

The 16-storey Tierra Crest has a floor plan of 280,000 sq ft which is inclusive of 9,900 sq ft retail space.

Education group Unitar has signed a nine-year tenancy with the company to occupy about 85% of Tierra Crest’s total lettable area from June onwards.

As for the podium, Yong said the company was in talks with potential tenants to take up the space and hoped to allocate 40% to 50% of the retail space for food and beverage businesses.

In the pipeline, it might retain and manage the retail space at The Bank, a joint-venture project with Detik Utuh Sdn Bhd.

Yong said: “It is likely that we will keep a big chunk of the retail space while the land owner (Syarikat Prasarana Negara Bhd) will have the offices and the residences will be sold.”

The single-block mixed development atop the Dang Wangi LRT station has a gross development value of RM1.04bil.

He said the project was situated in a prime location but the size was not substantial enough to create a full-fledge shopping mall so it would position itself as a lifestyle podium in the neighbourhood and a stopover for commuters.

Slated for completion in 2018, The Bank would host a retail mall podium, commercial office spaces, small office home office (Sohos) suites and a 207-room boutique hotel.

He said the Soho suites would be fully-furnished to “ease the headache” of buyers who are busy or always on the move.

When asked if it was confident of retail management as it had not been its main business, Yong said, “We are not managing it as a full-fledge shopping mall but we focus on creating a niche lifestyle mall to serve the people in the neighbourhood.”

He added that the direction was effective because there was a demand from people who prefer to eat and drink in a no frills neighbourhood mall rather then getting stuck in the traffic jam and spend a great amount of time to look for parking in bigger malls.

From

Article source: http://biz.thestar.com.my/news/story.asp?file=/2013/5/20/business/13133257&sec=business

Posted on May 22, 2013, Wednesday

KUCHING: Huge revenue is expected to be reaped by MyEG Services Bhd (MyEG) from its potentially lucrative markets such as the online foreign worker permit renewal and customs service tax monitoring.

According to the research firm at Kenanga Investment Bank Bhd (Kenanga Research, MyEG’s top line could see another robust growth should these two newly-launched services gain traction.

“For the online foreign workers permit renewal, assuming a conservative number of circa two million legal foreign workers with an average RM50 per renewal, the potential market size of circa RM100 million alone is already more than the group’s financial year 2012 (FY12) revenue,” it said in its research report on the group yesterday.

“Meanwhile, we understand that the customs service tax monitoring project is targeting to link about 100,000 point of sales terminals at the country’s 20,000 restaurants and entertainment outlets to monitor the government have mandated service tax transactions electronically.”

To note, MyEG, through its consortium, will receive a 20 per cent of the additional service tax collected at restaurants and entertainment outlet annually after the tax base has been established, Kenanga Research highlighted.

This was on the back of the firm’s belief that MyEG was an under-researched growth stock with a good earnings track record backed by recurring income streams.

“The group’s net profit has shown a five-year cumulative annual growth rate (CAGR) of 31 per cent (FY07 to FY12), underpinned by the increasing online renewal of road tax, automobile insurance, driving license with the Road Transport Department of Malaysia as well as the rising take-up of new online maid permit renewal services with the Immigration Department of Malaysia,” it said.

“We view all these businesses to be defensive in nature.” MyEG’s strong balance sheet and net cash position should also support its minimum 30 per cent dividend payout policy, Kenanga Research added, noting that the group was in a net cash position of RM3 million as at end of 2012.

“We understand that MyEG intends to maintain a minimum dividend payout ratio (DPR) of 30 per cent.

If we were to take the FY14 consensus EPS estimate of 7.6sen, a 30 per cent DPR will come up to a 2.3 sen DPS, translating into a 1.7 per cent dividend yield,” it explained.

Based on the facts, Kenanga Research pegged MyEG at a potential fair value of RM1.54 per share, believing that the potential robust revenue growth from its new services as well as its recurring income profile deserved a premium valuation.

– Next Entry

Article source: http://www.theborneopost.com/2013/05/22/great-potential-for-myeg-in-newly-launched-services/