Going Broke?

No, not me, The NetBank of course...No, Not kidding...

ING Direct steps in as US bank collapses

ING Direct, a subsidiary of the Dutch financial group, is to take over the customers and insured deposits of NetBank, an online lender with $2.5bn (£1.2bn) in assets that was shut down on Friday by the US government following losses on subprime mortgages and other loans.

The closure marks the largest US bank failure since the end of the savings and loan crisis in the early 1990s.

It also underscores the ongoing impact of the US mortgage crisis, which has destabilised banks around the world, including Northern Rock in the UK.

ING said it would take on about $1.5bn in deposits insured by the Federal Deposit Insurance Corporation. It said it had paid about $15m to acquire the deposits. ING will also acquire $724m in assets from NetBank, which filed for bankruptcy protection.

Arkadi Kuhlmann, ING Direct chief executive, said in an interview that ING stepped in partly to insure continued consumer confidence in companies such as his and NetBank that conduct all their banking business online and do not operate branches....

    The complete story can be seen HERE...

Credit crisis strikes UBS, Citi, Credit Suisse
Mon Oct 1, 2007 10:09 AM ET

By Andrew Hurst and Christian Plumb

ZURICH/NEW YORK (Reuters) - The credit crisis struck at the heart of the global financial industry on Monday as Swiss bank UBS AG said it faced a shock loss in the third quarter and Citigroup warned its profits had collapsed.

UBS's chief domestic rival Credit Suisse Group also said its third quarter results would be "adversely impacted" by the credit market turmoil but said it would remain profitable in the third quarter.

The announcements are the latest from a lengthening queue of banks who have taken hits from a meltdown in U.S. subprime mortgages, which has set off a global liquidity crisis.

UBS said it would write down a net 4 billion Swiss francs ($3.4 billion) in its fixed-income portfolio and elsewhere, resulting in a third-quarter loss of 600 million to 800 million francs, its first quarterly loss in nine years.

UBS also said it would shed 1,500 jobs in its investment bank -- a sharp reversal of its recent buildup.

Citigroup, the world's largest bank by market value, said it was expecting a fall of about 60 percent in third-quarter net income.

Among the main culprits for the profit warning were $1.4 billion in pretax writedowns on funded and unfunded leveraged loan commitments.

Citi also said it was taking $1.3 billion in pretax losses on the value of subprime mortgage-backed securities it had "warehoused" -- held temporarily on its books - to repackage into bonds called collateralized debt obligations (CDOs).

Investors are now bracing for more bad news from other banks. "I don't think we are out of the woods. I don't think it's over," said an analyst with a major British bank.

Persistent worries about the health of the banking system have weighed on financial markets around the world.

Financial markets appeared to greet the announcements with relief after weeks of uncertainty among many investors who have been trying to work out exactly what the exposures of the world's largest banks are to subprime.

UBS shares were trading 0.6 percent higher and Credit Suisse stock was 0.3 percent higher at 1300 GMT as investors overlooked the scale of the impact and welcomed the banks' efforts to be transparent about their exposure.

In contrast, shares in Deutsche Bank, which has warned it will suffer a hit from the market turmoil in the third quarter but has not yet quantified the scale of the likely damage, were 1.3 percent down.

INTERBANK LENDING FREEZE

Lending among banks worldwide has seized up as financial institutions try to work out the extent of their exposure to subprime mortgages, which were packaged into asset-backed securities and parceled out to investors around the globe.

The world's main central banks have been keeping the financial system afloat by pumping in huge amounts of liquidity....

    And you can read more on that one HERE...