Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Airbus buys Salzburg Muenchen Bank  Join our daily free Newsletter

MENAFN - Arab News - 15/02/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN -Arab News) PARIS: Airbus Group pressed ahead with post-Lehman plans to acquire its own banking license on Friday, saying it would buy small German lender Salzburg Muenchen Bank AG to boost its financing options

The European aerospace group, formerly known as EADS, first disclosed the plans in 2012 after becoming concerned about where to place its large cash pile during the credit crisis

Owning a banking license would allow the world's second-largest aerospace group to deposit funds with the European Central Bank, as well as potentially draw on ECB funds

The plan follows in the footsteps of engineering companies such as Siemens, whose banking licenses have allowed it to tap the ECB's low-interest loan program directly

But in announcing the deal to buy Salzburg Muenchen Bank for an undisclosed sum, Airbus Group made plain its reasons had evolved — even though the option of using the euro zone central bank's coffers as a safe haven still stands

"In principle, it does entitle the bank to liquidity from the ECB; however, Airbus Group has no need to access any liquidity of the ECB at this stage," a spokesman said.

"Also, the bank will provide Airbus Group with the possibility to deposit funds directly with the ECB.

Airbus Group identified other possible uses including carving out some flexibility in areas that it said were usually reserved for banks, such as providing liquidity to non-controlled joint ventures

The bank "may provide trade financing with suppliers, hedge book services, etc to support Airbus's production and delivery efforts," RBC Capital Markets analyst Rob Stallard commented

Both Airbus and rival Boeing, which has an aircraft financing arm called Boeing Capital Corp, are increasing production after a boom in aircraft orders. Both companies face concerns about the ability of the supply chain to keep up

The bank is, however, seen as unlikely to handle the airline customer financing carried out by Airbus and which is already well established through a Dublin subsidiary

Industrial companies have traditionally been wary of the increased regulatory scrutiny - potentially involving tens of millions of euros in extra audits and management time or processes - that such a move would bring

Airbus and Boeing both offer customer financing to support aircraft sales as a last resort - an activity that has recently rarely been used as Asian lenders step in to fill the gap left by once-dominant French banks

US and European export credit agencies have also helped to fill the gap left by capital-constrained European lenders

Now, those export credits are returning to more normal levels as commercial banks return and new money pours into the 100 billion annual market for new jets.

Airbus said it aimed to close the acquisition, subject to approvals, "as early as possible in 2014". Once that happens, the Munich-based lender will be renamed Airbus Group Bank

Airbus Group did not say whether the bank would be run as a distinct company segment with its profits reported separately, or merely facilitate activities across the rest of the group

It said there would be no immediate impact on the bank's existing activities involving small and medium companies

"In a normal environment they would not be able to do anything different. They don't want to get overly exposed to their customers or the supply chain," an aircraft finance industry executive said, asking not to be named

However, Airbus Group would gain a "backstop capability in case of market disruption," he added

The idea of getting a bank license had been floating around for at least a decade at EADS

Shortly after it was founded in 2000, top executives at the Franco-German-Spanish company debated whether it was needed to create a European titan in the vein of General Electric

The US conglomerate's massive GE Capital arm helps it finance the sale and lease of Airbus and Boeing jets as well as financing and leasing its own jet engines and other products

Later, the EADS banking project was revived and gathered pace as the company looked for a safe port for its 10 billion euro cash pile following the 2008 collapse of Lehman Bros

EADS changed its name to Airbus Group last month, subject to formal approval by its shareholders expected in May.


 


Arab News




  MENA News Headlines
 Dec 19 2014 - Int'l community responsible for protecting Palestinians: KuwaitArab Times
(MENAFN - Arab Times) GENEVA Dec 18 (KUNA): Kuwait's permanent delegate to the UN agencies in Geneva Ambassador Jamal Al-Ghunaim said Wednesday the international community needs to shoulder its legal ...

 Dec 19 2014 - Kuwait- Early diagnosis key to defeat breast cancerArab Times
(MENAFN - Arab Times) KUWAIT CITY Dec 18 (KUNA): Sheikha Hessa Saad Al- Abdullah Al-Sabah on Wednesday highlighted the importance of early detection in curbing the growth of various forms of cancer. ...

 Dec 19 2014 - Saudi- Host Maskan beats Nesma Inaya edges out Gilas 90-88Arab News
(MENAFN - Arab News) Host team Maskan Arabia Co. brought down Nesma 105-92 while Inaya Medical College edged out S. Gilas 90-88 in the seventh week action in the 2nd Maskan Arabia Invitational ...

 Dec 19 2014 - Saudi- Faisaliah Team A and Courtyard Marriott triumph in Inter-Hotels Cricket eventArab News
(MENAFN - Arab News) Al Faisaliah Team A won its match against Riyadh Marriott while Al Faisaliah-Al Khozama combined Team B went down in defeat to Courtyard Marriott during Friday's matches in the ...

 Dec 19 2014 - Mathy powers to victory in Riyadh Wheelers 60km road raceArab News
(MENAFN - Arab News) A new course used for the first time brought general approval from the 60 riders who signed on for the Riyadh Wheelers 60km road race and with no wind to bother the competitors ...

 Dec 19 2014 - SCTC ABTC-Taif ladies clash in finals Saudia Catering JRTC in ALBAIK Tennis semifinalsArab News
(MENAFN - Arab News) SCTC and ABTC-Taif will dispute the Ladies Division HMX category finals after a grueling double round-robin while in the Men's Division LMX category four teams advanced to the ...

 Dec 19 2014 - Saudi- Hyundai Castrol takes third in 4th MYN 2014 JBL-Lifestylez tourneyArab News
(MENAFN - Arab News) Hyundai Castrol of Dennis Elmenzo beat Fuddruckers 72-53 to claim the third place in the 4th MYN Division at the Ahmed Mohammed Abdul Wahab Naghi Sports Complex in Ash Shati ...

 Dec 19 2014 - Saudi- Natco Desert Warriors win in JCA Money Gram CKB-T20Arab News
(MENAFN - Arab News) The Money Gram-sponsored Cricket Ke Badshah T20 Tournament for the year 2015 under the auspices of Saudi Cricket Center (SCC) took off to a rousing start with 28 teams entered in ...

 Dec 19 2014 - UN seeks 8.4bn to help Syrian victimsArab News
(MENAFN - Arab News) BERLIN: The UN appealed Thursday for $8.4 billion to provide emergency aid and longer-term help to nearly 18 million people in Syria and across the region hit by the drawn-out ...

 Dec 19 2014 - Saudi- Nigeria sentences 54 soldiers to deathArab News
(MENAFN - Arab News) ABUJA Nigeria: Nigeria has sentenced 54 soldiers to death for mutiny assault cowardice and refusing to fight extremists.The court-martial charges all were connected to the ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help