The bank's 2007 annual report, released on February 26, also revealed that it had written down a total of $133 million due to investments held in Whistlejacket Capital, a structured investment vehicle sponsored by the group that went into receivership this month. Losses totalling $122 million were attributed to writedowns and impairment charges on asset-backed securities (ABSs).
Commenting on the results, Peter Sands, the group's chief executive, said: “We have faced challenges and taken some writedowns as a result of the financial turmoil.” The bank said it had had to make “difficult decisions”, particularly referencing Whistlejacket, for which it said it had not been able to find a viable solution, mainly due to “the pace of continuing deterioration in the market for certain asset classes".
On February 11, Whistlejacket advised that it had breached its capital note net asset value trigger of 50%, which was an enforcement event, requiring the security trustee, BNY Corporate Trustee Service, to appoint a receiver to manage it.
The bank also stated that it had no direct exposure and very limited indirect exposure to US subprime assets, with its entire exposure to ABSs, including collateralised debt obligations, being under $6 billion.
The week on Risk.net, August 19-25, 2016Receive this by email