IPIP Blog

Small London-area businesses stand to benefit from a pledge by the Bank of Montreal to boost business borrowing by $10 billion over the next three years.

That represents a 30% jump over the current $38 billion portfolio for commercial lending.

Hydra Dyne Technology, an Ingersoll hydraulic parts manufacturer, is one of BMOs area clients taking advantage of the favorable lending climate to fund an expansion while their market is hot.

The firm has started construction of an 18,000-sq.-ft. addition that will double the plants size.

Hydra Dynes main customers are in the construction, forestry, mining and agricultural sectors.

In our market we have been booming since 2010. The Chinese market is really opening up. Theres a lot of digging going on there and they need equipment, said Hydra Dyne Technology president Stephen Bohner.

The 20-year-old company has 68 employees and plans to add more when the expansion is completed. Companies now have a good chance to grow while capital is available, Bohner said.

Funding is reasonably easy to get at a good rate as long as you have a good balance sheet. We have to be globally competitive. . . If you dont grow, you die, said Bohner.

James Gardiner, BMOs area manager for commercial banking, said the bank didnt cut back on lending in the London area during the economic downturn and city businesses will benefit from the $10-billion boost in the banks commercial portfolio.

We will get our fair share of that and put it out in the streets of London . . For companies with strong balance sheets, this is the time to invest, he said.

Gardiner said local BMO managers will also get more power to approve loans.

Weve always had a decentralized credit structure . . . but theres been increased discretion put into the local market to make sure our offers are competitive, he said.

Londons high unemployment and the lockout at the Electro-Motive Diesel plant have grabbed headlines recently, but Gardiner said clients such as Hydra Dyne are quietly expanding and adding jobs.

Economists have noted that businesses have been wary about borrowing money and expanding since the recession in 2008.

Douglas Porter, BMOs deputy chief economist, said more business investment is needed to improve productivity and boost the economy.

While small- and medium-sized enterprises have shown some understandable caution in recent months, relatively strong finances and supportive financial conditions should spur capital spending further in the coming year, said Porter.

E-mail hank.daniszewski@sunmedia.ca, or follow HankatLFPress on Twitter.

Good report! Additional notations below: Karim writes: US GDP growth in Q4 a bit weaker than expected at 2.8% Perhaps the FOMC had word of this, explaining the unexpected dovishness? 1.9% of that growth accounted for by inventories. Other contributions: (consumer spending 2%, fixed investment 0.4%, government spending -0.9%, net exports -0.1%). Rebuilding post earthquake supply lines probably now complete. Govt [...]

In their investigation into Corus failure, the Treasurys Office of Inspector General said that the banks key regulator, the US Office of the Comptroller of the Currency, told how the quality of Corus managements lending decisions declined in 2007 and 2008. The bank was seized by regulators on Sept. 11, 2009.

For example, Corus originated a loan for a development that was 5 to 10 miles off the Las Vegas strip, the report said. Similarly, an OCC official stated that the banks projects in later years were not as high quality, citing Florida developments surrounded by car dealerships instead of water.

Another OCC official also said the locations of the banks Florida projects didnt always make sense; one was in the Everglades.

Unlike the recent autopsy into the failure of Rockford-based Amcore Bank, the report into Corus wasnt as critical to regulators.

With regard to supervision, OCC examiners generally followed existing guidance with respect to Corus, the report said. However, we

believe that guidance is not adequate for effectively dealing with high concentrations, which, in Corus case, was an overwhelming dependence on commercial real estate, particularly condominium projects, in volatile real estate markets.

byerak@tribune.com

Twitter: @beckyyerak

The lack of new construction is cutting economic growth and payrolls. Falling home prices are reducing household wealth, a drag on consumer confidence and spending.

The ideas coming out of Washington aren’t new but mainly extensions or continuations of previous efforts to help homeowners, especially those with underwater mortgages, and to keep mortgage rates low to attract new buyers.

Those past moves have helped homebuilding find a bottom, but that bottom is well below boom levels. Housing starts are less than a third of their record highs of 2006, and home prices are almost 18% below their peaks of 2007, according to Federal Housing Finance Agency data released Wednesday.

Those deep holes in activity and prices are why policymakers want to help housing even more. Any expanded policy actions, however, will run up against a formidable obstacle: the New Normal in the mortgage process.

Lax lending practices fueled the housing boom and created the wave of subprime mortgages that then imploded and pulled down the global financial system and triggered the worst recession since The Great Depression.

After that experience and the heightened oversight by regulators, it is not surprising that the mortgage industry raised the bar on lending standards. Indeed, more prudent lending will prevent mortgages from triggering another financial meltdown.

The question is whether overly cautious lenders will undercut policymakers who hope to boost housing demand.

According to Fed data, the banking sector is keeping in place the high mortgage-lending standards set during the crisis. In comparison, more banks report reversing some of their past stricter requirements for business loans and commercial real estate.

The higher hoops are keeping some potential home buyers on the sidelines and derailing deals.

The National Association of Realtors says pending home saleswhich tracks contracts signed but not yet closedhave been rising when compared to year-ago levels.

But many of those deals will go awry. In December, one-third of NAR members reported contract cancellations largely because of declined mortgage applications and appraised values coming in below the negotiated price.

The New Normal in lending means the housing turnaround will remain graduallyno matter what Washington wants. The good news is that absent a financial shock, the sector won’t subtract from the economy in 2012.

By CARL SELPH

PANAMA CITY
Unfortunately, banks, Fannie Mae and Freddie Mac are still contributing significantly to the continued decline of housing prices through the ongoing deterioration of our neighborhoods and homeowners association communities. Anyone can drive down a street in a neighborhood of single-family homes and observe overgrown lawns, unkempt landscaping, houses in need of paint and repair.

With few exceptions, most of these unkempt properties are lender-owned and an aesthetic disgrace to the surrounding occupied homes. Too often, the foreclosed properties owned by banks, Fannie Mae or Freddie Mac become a haven for vagrants, drug addicts or homeless persons.

The shame of it all is that these properties have been owned by the lending institution for a year or more. With each passing day the properties become more unkempt, more in need of restorative or preventive maintenance, more of an eyesore to the neighbors and the neighborhood, and exacerbate the continuing decline of property values.

The owners of these properties banks, Fannie Mae and Freddie Mac are not behaving as good corporate citizens or community neighbors, and such behavior has both tangible and intangible injurious effects on the neighborhoods and homeowners.

However, as abhorrent as this situation is for traditional neighborhoods and communities, it is even more devastating and injurious to owners who are bound by the regulatory effects of community associations (homeowners or condominium).

In community associations, the expenses of maintaining the common elements (roads, grounds, buildings, security, etc.) are borne by the owners in proportion to their respective ownership interests. Generally, when a mortgagee like a bank, Freddie Mac or Fannie Mae start foreclosure proceedings on a property, the borrower will quit making payments to the association and will also vacate the property. However, in most situations the lending institution chooses not to move forward expeditiously with the foreclosure proceedings. In fact, more typical is for the lending institutions to become very dilatory in their actions in order to delay the foreclosure proceeding and their taking title to the property.

The reason for the lending or servicing institutions dilatory behavior is clearly explained by the metaphor follow the money. Given the slowdown of the real estate market, the time that a mortgagee will have to hold title to a foreclosed property prior to sale is unusually long maybe a year or more. Once the lending institution takes title to the property, it becomes responsible, like other owners, for paying the community associations assessments. Additionally, it is responsible for the past-due assessments, subject to a statutory maximum amount (known as safe harbor provisions) equal to one years worth of assessments or 1 percent of the original mortgage amount, whichever is less.

In the short term, the lending institution seems to be saving money or conserving its cash position using the foregoing foreclosure strategy. However, such a strategy is bad for the community and, in the long term, costs the lending institution money or resources. It is bad for the community for several reasons:

1. It requires the responsible owners in the community to foot the bill for the dilatory lending institution. It is not uncommon for homeowner associations or condominium associations to file for bankruptcy because the few owners paying assessments are not able to fund the entire association.

2. While the properties are occupied by owners not paying their mortgage or remain vacant awaiting action by the lending institution, they generally are not maintained and lose significant value, causing a commensurate loss in value of the surrounding properties.
To limit the adverse effects, community associations should take a proactive role using the limited legal strategies that are available to force the lending institutions and servicing agents to fulfill their responsibilities to the communities where they hold mortgages.

Unfortunately, all too often association boards and managers do not understand fully the foreclosure process and the tools available to them. They should ensure that their legal counsel is experienced in such matters and apprises them of all of the options available and the costs of inaction.

Additionally, the 2012 Florida Legislature should take action to amend the homeowners and condominium statutes to further increase the mortgagees liability for past-due assessments or eliminate the mortgagees safe harbor provisions completely.

Also, the judicial system should take a close look at a mortgagees action in foreclosure cases and impose sanctions on those who deliberately delay the process to avoid or postpone their responsibilities. Lending institutions and their servicers need to do more to alleviate the situation they created.

Carl Selph is a former CPA and Florida legislator. He is a Florida Supreme Court-certified circuit and appellate mediator, court-approved foreclosure mediator, arbitrator, and licensed community association manager.

SHORT HILLS, NJ, Jan. 26, 2012 —

SHORT HILLS, NJ, Jan. 26, 2012 /PRNewswire/ — Investors Bancorp, Inc. (NASDAQ: ISBC) (Company), the holding company for Investors Bank (Bank), reported net income of $21.1 million for the three months ended December 31, 2011 compared to net income of $16.9 million for the three months ended December 31, 2010. Net income for the year ended December 31, 2011 was $78.9 million compared to net income of $62.0 million for the year ended December 31, 2010. Basic and diluted earnings per share were $0.20 for the three months ended December 31, 2011 compared to $0.16 for the three months ended December 31, 2010. Basic and diluted earnings per share were $0.73 for the year ended December 31, 2011 compared to $0.57 for the year ended December 31, 2010.

Kevin Cummings, President and CEO discussed the Companys results, We are pleased with our operating results for 2011 as our earnings increased 27% over prior year. Our ratio of allowance for loan loss to total loans increased to 1.32% at December 31, 2011 compared to 1.14% last year while our non-accrual loans to total loans ratio decreased to 1.60% this quarter from 1.82% last quarter.

Regarding the acquisition of Brooklyn Federal Bancorp completed in January, Mr. Cummings commented, We are excited about our continued expansion into the New York marketplace. This acquisition enhances our franchise by adding five branches and approximately $390 million in deposits.

The following represents performance highlights and significant events that occurred during the period:

• Net interest margin for the three months ended December 31, 2011 was 3.36%. This represents an increase of 17 basis points compared to prior year.

• The return on average tangible equity improved to 9.19% for the three months ended December 31, 2011, compared to 8.81% for the linked quarter and 7.66% for the three months ended December 31, 2010 and improved to 8.80% for the year ended December 31, 2011 compared to 7.21% for the year ended December 31, 2010.

• Net loans increased $876.5 million, or 11.0%, to $8.79 billion at December 31, 2011 from $7.92 billion at December 31, 2010. During the year ended December 31, 2011, we originated $846.7 million in multi-family loans and $308.2 million in commercial real estate loans.

• Deposits increased by $587.1 million, or 8.7% to $7.36 billion at December 31, 2011 from $6.77 billion at December 31, 2010.

• Efficiency ratio was 42.44% for the three months ended December 31, 2011 and 43.68% for the year ended December 31, 2011.

• Common stock repurchased totaled 536,854 shares during the quarter and 2,413,455 shares during the year ended December 31, 2011. #xA0;

• The Company maintains a strong tangible capital ratio of 8.71% and is considered well capitalized under regulatory guidelines.

Comparison of Operating Results

Interest and Dividend Income

Total interest and dividend income increased by $10.3 million, or 9.4%, to $120.7 million for the three months ended December 31, 2011 from $110.3 million for the three months ended December 31, 2010. #xA0;This increase is attributed to the average balance of interest-earning assets increasing $1.1 billion, or 11.9%, to $10.09 billion for the three months ended December 31, 2011 from $9.02 billion for the three months ended December 31, 2010. #xA0;This was partially offset by the weighted average yield on interest-earning assets decreasing 11 basis points to 4.78% for the three months ended December 31, 2011 compared to 4.89% for the three months ended December 31, 2010. #xA0;

Interest income on loans increased by $11.6 million, or 11.7%, to $111.1 million for the three months ended December 31, 2011 from $99.5 million for the three months ended December 31, 2010, reflecting a $1.03 billion, or 13.3%, increase in the average balance of net loans to $8.79 billion for the three months ended December 31, 2011 from $7.76 billion for the three months ended December 31, 2010. #xA0;The increase is primarily attributed to the average balance of multi-family loans and commercial real estate loans increasing $702.4 million and $326.8 million, respectively. This activity is consistent with our strategy to diversify our loan portfolio by adding more multi-family loans and commercial real estate loans. #xA0;In addition, we recorded $923,000 in loan prepayment penalties as interest income for the three months ended December 31, 2011 compared to $118,000 for the three months ended December 31, 2010. This was partially offset by an 8 basis point decrease in the average yield on loans to 5.05% for the three months ended December 31, 2011 from 5.13% for the three months ended December 31, 2010, as lower rates on new and refinanced loans reflect the current interest rate environment.

Interest income on all other interest-earning assets, excluding loans, decreased by $1.3 million, or 12.2%, to $9.5 million for the three months ended December 31, 2011 from $10.9#xA0;million for the three months ended December 31, 2010. #xA0;This decrease reflected the weighted average yield on interest-earning assets, excluding loans, decreasing by 51 basis points to 2.95% for the three months ended December 31, 2011 compared to 3.46% for the three months ended December 31, 2010 reflecting the lower interest rate environment. This was partially offset by a $37.5 million increase in the average balance of all other interest-earning assets, excluding loans, to $1.29 billion for the three months ended December 31, 2011 from $1.26 billion for the three months ended December 31, 2010. #xA0;

Total interest and dividend income increased by $44.9 million, or 10.5%, to $473.6 million for the year ended December 31, 2011 from $428.7 million for the year ended December 31, 2010. #xA0;This increase is attributed to the average balance of interest-earning assets increasing $1.19 billion, or 14.0%, to $9.70 billion for the year ended December 31, 2011 from $8.51 billion for the year ended December 31, 2010. #xA0;This was partially offset by the weighted average yield on interest-earning assets decreasing 16 basis points to 4.88% for the year ended December 31, 2011 compared to 5.04% for the year ended December 31, 2010. #xA0;

Interest income on loans increased by $50.8 million, or 13.3%, to $434.4 million for the year ended December 31, 2011 from $383.5 million for the year ended December 31, 2010, reflecting a $1.26 billion, or 17.6%, increase in the average balance of net loans to $8.46 billion for the year ended December 31, 2011 from $7.20 billion for the year ended December 31, 2010. #xA0;The increase is primarily attributed to the average balance of multi-family loans and commercial real estate loans increasing $675.1 million and $426.7 million, respectively. This activity is consistent with our strategy to diversify our loan portfolio by adding more multi-family loans and commercial real estate loans. In addition, we recorded $2.6 million in loan prepayment penalties as interest income for the year ended December 31, 2011 compared to $1.2 million for the year ended December 31, 2010. #xA0;The growth in the loan portfolio was partially offset by a 20 basis point decrease in the average yield on loans to 5.13% for the year ended December 31, 2011 from 5.33% for the year ended December 31, 2010.

Interest income on all other interest-earning assets, excluding loans, decreased by $6.0 million, or 13.2%, to $39.2 million for the year ended December 31, 2011 from $45.2 million for the year ended December 31, 2010. #xA0;This decrease reflected a $76.0 million decrease in the average balance of all other interest-earning assets, excluding loans, to $1.23 billion for the year ended December 31, 2011 from $1.31 billion for the year ended December 31, 2010. #xA0;In addition, the weighted average yield on interest-earning assets, excluding loans, decreased by 27 basis points to 3.18% for the year ended December 31, 2011 compared to 3.45% for the year ended December 31, 2010 reflecting the lower interest rate environment.

Interest Expense

Total interest expense decreased by $2.5 million, or 6.6%, to $35.9 million for the three months ended December 31, 2011 from $38.5#xA0;million for the three months ended December 31, 2010. #xA0;This increase is attributed to the weighted average cost of total interest-bearing liabilities decreasing 32 basis points to 1.59% for the three months ended December 31, 2011 compared to 1.91% for the three months ended December 31, 2010. #xA0;This was partially offset by the average balance of total interest-bearing liabilities increasing by $989.6 million, or 12.3%, to $9.05 billion for the three months ended December 31, 2011 from $8.06 billion for the three months ended December 31, 2010. #xA0;

Interest expense on interest-bearing deposits decreased $2.3 million, or 10.4% to $20.0 million for the three months ended December 31, 2011 from $22.3 million for the three months ended December 31, 2010. #xA0;This decrease is attributed to a 25 basis point decrease in the average cost of interest-bearing deposits to 1.15% for the three months ended December 31, 2011 from 1.40% for the three months ended December 31, 2010 as deposit rates reflect this lower interest rate environment. #xA0;This was partially offset by the average balance of total interest-bearing deposits increasing $601.5 million, or 9.5% to $6.96 billion for the three months ended December 31, 2011 from $6.36 billion for the three months ended December 31, 2010. #xA0;Core deposit accounts- savings, checking and money market, outpaced average total interest-bearing deposit growth as average core deposits increased $659.7 million.

Interest expense on borrowed funds decreased by $235,000, or 1.5%, to $15.9 million for the three months ended December 31, 2011 from $16.2 million for the three months ended December 31, 2010. #xA0;This decrease is attributed to the average cost of borrowed funds decreasing 75 basis points to 3.06% for the three months ended December 31, 2011 from 3.81% for the three months ended December 31, 2010 as maturing borrowings repriced at lower interest rates. #xA0;This was partially offset by the average balance of borrowed funds increasing by $388.1 million or 22.9%, to $2.08 billion for the three months ended December 31, 2011 from $1.70 billion for the three months ended December 31, 2010.

Total interest expense decreased by $14.8 million, or 9.3%, to $144.5 million for the year ended December 31, 2011 from $159.3#xA0;million for the year ended December 31, 2010. #xA0;This decrease is attributed to the weighted average cost of total interest-bearing liabilities decreasing 41 basis points to 1.66% for the year ended December 31, 2011 compared to 2.07% for the year ended December 31, 2010. #xA0;This was partially offset by the average balance of total interest-bearing liabilities increasing by $999.7 million, or 13.0%, to $8.70 billion for the year ended December 31, 2011 from $7.70 billion for the year ended December 31, 2010. #xA0;

Interest expense on interest-bearing deposits decreased $10.9 million, or 12.0% to $79.9 million for the year ended December 31, 2011 from $90.8 million for the year ended December 31, 2010. #xA0;This decrease is attributed to a 32 basis point decrease in the average cost of interest-bearing deposits to 1.21% for the year ended December 31, 2011 from 1.53% for the year ended December 31, 2010 as deposit rates reflect this lower interest rate environment. #xA0;This was partially offset by the average balance of total interest-bearing deposits increasing $704.3 million, or 11.9% to $6.63 billion for the year ended December 31, 2011 from $5.92 billion for the year ended December 31, 2010. #xA0;The growth of core deposit accounts- savings, checking and money market, represented 89.9%, or $632.9 million of the increase in the average balance of total interest-bearing deposits.

Interest expense on borrowed funds decreased by $3.9 million, or 5.7%, to $64.6 million for the year ended December 31, 2011 from $68.5 million for the year ended December 31, 2010. #xA0;This decrease is attributed to the average cost of borrowed funds decreasing 41 basis points to 1.66% for the year ended December 31, 2011 from 2.07% for the year ended December 31, 2010 as maturing borrowings repriced at lower interest rates. This was partially offset by the average balance of borrowed funds increasing by $295.4 million or 16.6%, to $2.08 billion for the year ended December 31, 2011 from $1.78 billion for the year ended December 31, 2010.

Net Interest Income

Net interest income increased by $12.9 million, or 17.9%, to $84.8 million for the three months ended December 31, 2011 from $71.9#xA0;million for the three months ended December 31, 2010. #xA0;The increase was primarily due to the average balance of interest earning assets increasing $1.07 billion to $10.09 billion at December 31, 2011 compared to $9.02 billion at December 31, 2010, as well as a 32 basis point decrease in our cost of interest-bearing liabilities to 1.59% for the three months ended December 31, 2011 from 1.91% for the three months ended December 31, 2010. These were partially offset by the average balance of our interest earning liabilities increasing $989.6 million to $9.05 billion at December 31, 2011 compared to $8.06 billion at December 31, 2010, as well as the yield on our interest-earning assets decreasing 11 basis points to 4.78% for the three months ended December 31, 2011 from 4.89% for the three months ended December 31, 2010. While the yield on our interest earning assets declined due to the lower interest rate environment, our cost of funds also continues to fall. This reduction in our cost of funds has had a positive impact on our net interest margin which improved by 17 basis points from 3.19% for the three months ended December 31, 2010 to 3.36% for the three months ended December 31, 2011.

Net interest income increased by $59.7 million, or 22.1%, to $329.1 million for the year ended December 31, 2011 from $269.4#xA0;million for the year ended December 31, 2010. #xA0;The increase was primarily due to the average balance of interest earning assets increasing $1.19 billion to $9.70 billion at December 31, 2011 compared to $8.51 billion at December 31, 2010, as well as a 41 basis point decrease in our cost of interest-bearing liabilities to 1.66% for the year ended December 31, 2011 from 2.07% for the year ended December 31, 2010. These were partially offset by, the average balance of our interest earning liabilities increasing $999.7 million to $8.70 billion at December 31, 2011 compared to $7.70 billion at December 31, 2010, as well as the yield on our interest-earning assets decreasing 16 basis points to 4.88% for the year ended December 31, 2011 from 5.04% for the year ended December 31, 2010. While the yield on our interest earning assets declined due to the lower interest rate environment, our cost of funds also continues to fall. This reduction in our cost of funds has had a positive impact on our net interest margin which improved by 22 basis points from 3.17% for the year ended December 31, 2010 to 3.39% for the year ended December 31, 2011.

Provision for Loan Losses

Our provision for loan losses was $20.0 million for the three months ended December 31, 2011 compared to $19.0 million for the three months ended December 31, 2010. For the three months ended December 31, 2011, net charge-offs were $19.2 million compared to $12.7 million for the three months ended December 31, 2010. For the year ended December 31, 2011, our provision for loan losses was $75.5 million compared to $66.5 million for the year ended December 31, 2010. For the year ended December 31, 2011, net charge-offs were $49.2 million compared to $30.6 million for the year ended December 31, 2010. The increase in our provision is due to continued growth in the loan portfolio, specifically the multi-family and commercial real estate portfolios; the increased inherent credit risk in our overall portfolio, particularly the credit risk associated with commercial real estate lending; and the level of non-performing loans and delinquent loans caused by the adverse economic conditions in our lending area.

The following table sets forth non-accrual loans and accruing past due loans on the dates indicated as well as certain asset quality ratios:

SAN ANTONIO, Jan. 27, 2012 — Proactive Commercial Lending Group of San Antonio, TX, has been honored with a recognition by San Antonio Business Journal in its selection of Largest SA Commercial Mortgage Lenders.

SAN ANTONIO, Jan. 27, 2012 /PRNewswire-USNewswire/ — Announcing a special recognition appearing in the September, 2011 issue of San Antonio Business Journal published by American City Business Journals, Proactive Commercial Lending Group was selected for the following honor:Largest SA Commercial Mortgage Lenders

(Photo: http://photos.prnewswire.com/prnh/20120127/DC43153)

A spokesperson from Proactive Commercial Lending Group commented on the recognition: This is quite an honor for us. The fact that San Antonio Business Journal included Proactive Commercial Lending Group in its selection of Largest SA Commercial Mortgage Lenders, signals that our constant efforts towards business excellence are paying off.#xA0;We are proud to be included in this recognition.

About Proactive Commercial Lending Group: a short profile by and about the honoree:Proactive is still here and closing loans!! We have many new programs and investors ready to close. So call us now to Get Started!!

Following the publication of Proactive Commercial Lending Groups selection for San Antonio Business Journals Largest SA Commercial Mortgage Lenders list, American Registry seconded the honor and added Proactive Commercial Lending Group to the Registry of Business Excellence#x2122;. An exclusive recognition plaque, shown here, has been designed to commemorate this honor.

For more information on Proactive Commercial Lending Group, located in San Antonio, TX, please call 210-568-3803, or visit www.proactivelendinggroup.com.

This press release was written by American Registry, LLC with contributions from Proactive Commercial Lending Group on behalf of Proactive Commercial Lending Group and was distributed by PR Newswire, a subsidiary of UBM plc.

American Registry, LLC is an independent company that serves businesses and professionals such as Proactive Commercial Lending Group who have been recognized for excellence. American Registry offers news releases, plaques and#xA0;The Registry#x2122;, an online listing of over 2 million#xA0;significant business and professional recognitions.#xA0;Search The Registry#x2122; at#xA0;http://www.americanregistry.com.

Contact Info: Proactive Commercial Lending Group Phone: 210-568-3803Email Address: bmyles@proactivelendinggroup.com

SOURCE Proactive Commercial Lending Group

FRANKFURT Jan 27 (Reuters) – Loans to the private
sector in Portugal fell the most in one month since the European
Central Bank began logging the data in October 1997,
underscoring the trouble the country is in as it faces being
sucked further into the sovereign debt crisis.

Portuguese government bond yields hit new euro-era highs on
Friday on growing investor belief that the country may follow in
Greeces footsteps and require a second EU/IMF bailout.

The 10-year Portuguese bond yield rose by
around 25 basis points on the day to 15.36 percent, while the
five-year yield was up 24 bps at 20.48 percent.

Banks gave the countrys private sector, excluding
bank-to-bank lending, 4.898 billion euros less in loans in
December than in the previous month, the biggest monthly drop
since the beginning of the statistics in October 1997, ECB data
showed.

In particular, corporates took less in loans. The flow of
loans to non-financial companies was 2.983 billion euros in the
minus column, also a new record drop. The total amount of
outstanding loans to the private sector in the country was
270.198 billion euros at the end of last year, ECB data showed.

Private-sector deposits in Portugal and other countries in
the middle of the debt crisis fared much better, however. In
Portugal, they fell 0.5 percent to 232.9 billion.

Deposits in Greek banks grew for the first time in five
months, to 180.1 billion in December from 179.6 billion in the
previous month, but are still about 26 percent below their peak
in December 2009.

Deposits also inched up in Italy, while they fell marginally
in Spain and Ireland.

Monthly fluctuations in the figures are common, though such
sharp consecutive drops in countries with stable banking systems
are unusual.

The data, which are for all currencies combined, are not
seasonally adjusted and differ slightly from national central
bank figures. The measure excludes deposits from central
government and financial institutions.

(Reporting by Sakari Suoninen)

CaixaBank Quarterly Profit Advances 5.1% on Lending Income, Fees
January 30, 2012, 2:06 AM EST

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More From Businessweek

• Popular Quarterly Profit Rises on Lower Bad-Debt Charges
• Santander Profit Slumps After Spanish Real-Estate Cleanup
• Santander to Complete Real Estate Cleanup in 2012, Botin Says
• Santander Wholesale Deposits Drop 7.1% From September
• Santander May Say Profit Fell on Cleanup of Real Estate, Spain

By Charles Penty

Jan. 27 (Bloomberg) — CaixaBank SA, Spain’s fourth-biggest lender, said fourth-quarter profit rose 5.1 percent as revenue from lending and fees increased, offsetting higher provisions for bad loans.

Net income advanced to 208 million euros ($273 million) from 198 million euros a year earlier, the Barcelona-based bank said in a filing to regulators today. That beat the 189.4 million-euro average estimate of seven analysts surveyed by Bloomberg.

Spanish banks such as CaixaBank are bracing for a drive by the government to make lenders recognize greater losses on real estate piled up on their books during the country’s property crash. CaixaBank, which said it made extraordinary provisions of 706 million euros last year, increased its yield on loans in the quarter and paid less for deposits to strengthen net interest income, while growing pension and mutual funds added to revenue from commissions.

Net interest income climbed 8.1 percent from a year ago to 850 million euros as revenue from fees and commissions rose 21 percent to 425 million euros, the lender said.

Bad loans as a proportion of total lending rose to 4.90 percent from 3.65 percent a year earlier, CaixaBank said. Charges for asset impairments jumped to 361 million euros from 232 million euros a year earlier.

–Editors: Stephen Taylor

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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READER DISCUSSION

Banks Reduce French, Italian Lending, Pile Into Bunds, BIS Says
January 27, 2012, 2:59 AM EST

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• Greek Talks Risk Derailing EU Summit’s Crisis-Fighting Plan
• EU Moves Toward Greek Confrontation as Leaders Seal Fiscal Pact
• Euro-Area Debt Sales Top $43 Billion This Week as Fitch Cuts
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• Banks Reduce French, Italian Lending, Pile Into Bunds, BIS Says

By Boris Groendahl

Jan. 27 (Bloomberg) — International banks cut their loans to fellow lenders and governments in Italy, France and Spain in the third quarter, hoarding German, Japanese and U.S. bonds instead, data from the Bank for International Settlements show.

Cross-border claims on the Italian state, mainly bonds and loans, declined by 23 percent, or $67.7 billion, in the quarter ended Sept. 30 at banks in the 24 countries for which the Basel, Switzerland-based BIS reports those data. The same measure dropped 21 percent for France and 10 percent for Spain. It also fell for emerging economies including Brazil, Mexico and Poland, while $65.3 billion went into German government debt and $77.2 billion into U.S. Treasuries, the BIS said in a statement.

“Contrasting with the reduction in claims on the public sector in emerging countries, the exposure of international banks to the developed countries’ public sector increased by 4.3 percent in the third quarter,” the BIS said. “This increase was driven by claims on the public sectors of the United States, Germany and Japan.”

The data cover the quarter in which investors started to dump all but the safest of assets to cushion against losses amid signs of a worsening of the euro-area debt crisis. The European Central Bank restarted its bond purchases in August to prop up government securities in the region, allowing holders of those bonds to exit their assets. Emerging-market assets slid as commodity prices tumbled on concerns Europe’s woes may hurt the global economy.

Bunds Rose

The euro declined by 7.7 percent in the quarter against the dollar, the currency in which the BIS keeps the data. German government bonds returned 7.9 percent in the same period, according to indexes compiled by the European Federation of Financial Analysts Societies and Bloomberg.

Treasuries gained 6.5 percent and Japanese bonds rose 1 percent, the indexes showed. French debt gained 6.2 percent, with Italian bonds losing 4.2 percent and Spanish securities increasing 2.5 percent.

The Polish zloty and Brazilian real slid 17 percent against the dollar in the period, the most out of 25 emerging-market currencies tracked by Bloomberg. The Mexican peso fell 16 percent and the ruble 13 percent. Government bonds of all three countries dropped in the quarter, and benchmark stock indexes in each country declined at least 8 percent.

French Retreat

French banks shed the most Italian government debt, reducing their claims by 23 percent, the BIS said. They also retreated from other European assets including German bunds and German and Italian bank debt, which they cut by 28 percent. Instead, they shoveled $41.3 billion into Treasuries, increasing their U.S. government claims by 39 percent.

U.S. and U.K. banks were shifting assets at the fastest pace. U.S. lenders’ claims on French banks dropped by $29.1 billion, or about a quarter, while U.K. banks cut their lending to Italian banks in half. Both piled into bunds, with British banks increasing the German government claims by almost two- thirds, or $40.3 billion, and U.S. lenders raising them by 72 percent, or $42.6 billion.

German banks proved to be the most stable investors among the BIS sample in the quarter. They reduced their lending to French, Italian and Spanish borrowers by less than the average, and increased the U.S. government claims by $2.8 billion.

The BIS data record the cross-border business of banks in the countries reporting to it. Data for banks’ consolidated cross-border claims — which include bonds, loans, funds deposited at banks — are reported by 30 countries, 24 of which break down borrowers by nationality and by public, bank and non- bank private sector. Those countries include most developed and some emerging economies.

China Excluded

The data cover only part of the market. China, the world’s biggest holder of Treasuries, doesn’t report its banks’ holdings to the BIS. Claims by institutions other than banks, such as mutual funds, insurers or central banks, are also not reflected. The records are reported in U.S. dollars at the rate of the period’s end and not adjusted for currency movements.

Declining exchange rates versus the dollar contributed to the drop in claims on emerging markets in the quarter, the BIS said. Lending to Brazil’s government dropped 17 percent in dollar terms, to claims on the Mexican state by 18 percent and on Poland by 17 percent, it said. All those countries have debt denominated in other than their local currencies.

–With assistance from Keith Jenkins and Jason Webb in London. Editors: Stephen Taylor, Jon Menon

To contact the reporter on this story: Boris Groendahl in Vienna at bgroendahl@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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