Investors remained extremely cautious about making any bets in the stock market earlier this week, with prices of bank shares hardly moving over trading the first three days of the week. Investors appeared to be testing the waters after the rally bank shares saw last Friday over positive developments at the European summit (see Bank Shares Extend Gains On European Summit Optimism). But the fact that nerves were on edge this Fourth of July week became obvious when investors led the overall market lower over trading on Thursday in anticipation of a poor job report from the government the next day. A weaker than expected U.S. consumer spending report and global implications of the rate-cut in China also contributed to the decline.
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Late last Friday, Credit Suisse announced that all its operating divisions would be reporting a profit for the second quarter of 2012. The announcement by the second largest Swiss bank followed one by the bank’s board of directors stating that the bank’s capital position remain strong and that it will not need to worry about raising fresh capital in the near future.
Investors welcomed the news which was primarily aimed at addressing the criticism Credit Suisse drew over recent quarters for sub-par revenue figures for all its divisions as compared to peers.
You can read more about this announcement in our article Credit Suisse Reassures Market On Upcoming Earnings With Statement.
The Royal Bank of Scotland Group (NYSE:RBS) has been slammed by the British government twice over the week for its alleged role in the LIBOR manipulation scandal and for the crippling technical glitch in it Ulster Bank business in Ireland which has left almost all its customers in the lurch for two weeks now.
The 82% state-owned banking group is rumored to attract fines in excess of £150 million ($230 million) from regulators investigating LIBOR fixing by major global banks.
Read more about these developments here: RBS Hit By LIBOR Fixing Investigation & Ulster Bank Glitch.
State Street has resolved to shave off at least $600 million from its IT expenses over the next two years. The asset management firm which develops and tests almost all its software in-house is looking for process- and technology-based modifications to its IT unit to reduce the effort and time taken to get new software up and running by 30-40%. Most of the savings are expected to be one-time in nature which will boost the bottom-line at regular intervals till 2014. There are also sizable savings anticipated in the bank’s $1 billion annual IT expenses.
To know more about this, read State Street Sets A $600 Million IT Savings Target.