Financial Biz Review: Morgan Stanley UNDER PRESSURE, German Bank DOWNGRADES
And now Germany… Six German banks have been downgraded by Moody’s, including the country’s second largest, Commerzbank (CRZBY.BK). The largest, Deutsche Bank (NYSE:DB), remains under review. Some analysts view the action as a “bit harsh”, but it should be remembered that Germany is very much exposed to the ongoing debt crisis, especially in its often-called role as the ‘paymaster’ of Europe.
Yes they are – no, they are not. Morgan Stanley (NYSE:MS) is under pressure from Dodd-Frank rules that restrict trading, and now there is a question as to whether the firm wants to divest a minority investment in its commodities division, or perhaps the entire unit. One story on Wednesday attributed to sources has it that MS is in discussions for the purpose of selling the business, but MarketWatch reports that the company has no interest whatsoever in such a move, although it has been contacted by private equity entities. The division is said to bring a range of $2 billion to $3 billion per year in revenues, so its value would be considerably upwards from that.
Lloyds (NYSE:LYG) is in the midst of divesting non-core assets, and the latest such move involves the sale of £809 million ($1.25 billion) of non-performing Australian real-estate loans to a Morgan Stanley and Blackstone (NYSE:BX) joint venture for £388 million. Lloyds lost some £183 million on the loans last year, and will use the sale proceeds to repay its own debt.
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