Category Archives: Business

Satyam posted 42% increase in Q2 profits

Satyam Computer Services Ltd.

Satyam Computer reported a 42 per cent jump in quarterly net profit, beating expectations, but cut its full-year revenue guidance in dollar terms. Satyam’s consolidated net profit for the quarter ended Sep 30 rose to Rs 581 crore from Rs 409 crore a year ago.

Commenting on the outlook, Satyam Chairman B. Ramalinga Raju said, “the near-term environment remains challenging because of the global slowdown and continued instability, notably in the US banking and financial services sector. Consolidation among financial services companies is also contributing to uncertainty, although it is also creating transformational opportunities.”

Satyam shares were trading 0.31 per cent higher at Rs 273.90 after touching a high of Rs 285.

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US bank Wachovia in talks for buyout


US economy is going with its worst era. After Washington Mutual (WaMu) seized by the US government and put in the pocket of JP Morgan Chase, it wrote a new chapter of biggest bank failure in US history.

it seems next in the line is Wachovia Corp., USA’s 6th largest bank, by assets, was hunting for a merger partner as reported by Reuters. The Wall Street Journal reported that Wachovia had entered preliminary merger talks with Citigroup, Banco Santander SA and Wells Fargo & Co, citing a person familiar with the situation. Bank executives are expected to be in New York this weekend for talks, it said.

Wachovia was estimated about $21.6 billion after the Friday’s market close, Reuters data show. It’s stock price dropped to $8.90 from the regular trading close of $10. Currently, New York-based CitiGroup, Banco Santander of Spain and San Francisco-based Wells Fargo are in line up to bid for Wachovia. Market value estimated for Citigroup’s was $109.7 billion, Santander’s was $99.8 billion and Wells Fargo’s was $123.4 billion, the data show.

These talks are early, however, and no deal may emerge from them. But it appears that Wachovia is seeking out potential alternatives should the financial rescue package being debated in Washington is not quickly passed, or fails to provide enough help.

Takeovers can wipe out bank stakeholders if they occur after regulators seize the company. Similar had happened to Seattle-based Washington Mutual Inc., the nation’s biggest thrift and now the largest bank failure in history. JPMorgan Chase & Co. paid $1.9 billion for deposits and branches of WaMu, leaving the company with about $28 billion in debt according to Bloomberg data and little means to pay it off.

WaMu was taken over by regulators yesterday after customers of the Seattle-based lender withdrew $16.7 billion from accounts since September 15.

According to the latest reports, Wachovia Corp. suitors may wait to let regulator seize the bank, resulting best assets in their pocket and leave rest with government to sort out.

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Another US banking ship sinked

A Washington Mutual in Naperville, Illinois
Image via Wikipedia

After Lehman Brothers and Merrill Lynch, next is Washington Mutual (WaMu). Where is US economy going? Once the most strong, fastest growing and stable economy of the world is now collapsing in top speed.

Wall Street Journal wrote

“In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co. Federal regulators said WaMu has suffered an exodus of $16.7 billion in deposits since Sept. 15, leaving the Seattle thrift “with insufficient liquidity to meet its obligations.” As a result, WaMu was in “an unsafe and unsound condition to transact business,” according to the Office of Thrift Supervision.”

JP Morgan has came up as saviour for the second US banking major, earlier this year JP Morgan also aquired the investment bank Bear Sterns. This is 13th major banking failure in US this year which raises question on the US economy in the near future. As the US elections are also near, next forming government will need to look seriously in the future operations of US banks and financial institutes.