Riggs Loss Likely to Be Sizable in 2nd Quarter

[seemslikeadream]

Fines, Losing Embassy Business Hurt D.C. Bank

By Terence O'Hara
Washington Post Staff Writer
Saturday, August 7, 2004; Page E01

Riggs National Corp.'s money-laundering problems, which included a $25 million fine and the loss of its embassy banking business, cost the D.C. banking company at least $40 million in the second quarter.

As a result, Riggs is likely to report a hefty loss when it releases its results for the quarter ended June 30, which could be as soon as Monday.


In addition to the record fine assessed by bank regulators in May for failing to follow anti-money-laundering procedures, the bank's bottom line also will be eroded by other costs, which the bank has announced previously. These include a charge of between $15 million and $21 million to account for the costs of exiting its embassy and international banking divisions -- not to mention a pile of bills from lawyers and consultants hired to help Riggs with the fallout from the scandal.

"The numbers will be pretty awful," said Gerard S. Cassidy, who follows Riggs for RBC Capital Markets. "There will be a number of one-time items that will cost them a fair amount of money."

The shrinkage in the bank's deposits will also lead to a reduction in assets of at least $185 million.
more
http://www.washingtonpost.com/wp-dyn/articles/A46707-2004Aug6.html

[emad]

1. Wonder how they draw up their balance sheet?

Do they count Obiang family secret accounts of £500 million as assets or liabilities, as per:

From: Dictator sues British 'coup plotters'

"The US state department, however, has been extremely critical of the country's human rights record. Last week, Senate investigators issued a highly critical report linking the Obiang family to secret accounts valued at about £500 million at Riggs Bank in America."

Source:
http://www.sport.telegraph.co.uk/news/main.jhtml?xml=/n...

from your:
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=708335

And wonder if they've had to downsize any Bush family accounts, like Junior's blind trust portfolio? Or Poppy's offshore investments in Equitorial Guinea?

[daleo]

2. Bush's uncle will do just fine, I am sure

This bank sounds like a criminal conspiracy.

[seemslikeadream]

3. WaPo: Allbritton Loses Riggs Bank (front page, day 3)

Critics Say Allbritton Ruined Bank He Loved

By David Montgomery and Kathleen Day
Washington Post Staff Writers
Saturday, July 17, 2004; Page A01

(Mods, story has up to three headlines, posted head is the first clicker)

Joe L. Allbritton loved Riggs Bank to death.

The strong-willed Texan bought control of the beloved and storied Washington institution in 1981 at its peak of influence and prestige. The "bank of presidents" served 21 first families over the years, financed the purchase of Alaska and became the largest bank in the region.

Yesterday, Washington awoke to learn that after more than 160 years, the Riggs name will disappear, swallowed by PNC Financial Services Group Inc. Allbritton once dismissed such faceless financial conglomerates as "toothpaste banks" -- Crestar, Sovran -- and vowed never to sell out to one. But by yesterday he had no choice. His Riggs was no longer the largest or most important bank in the Washington area, and it was enveloped in a thickening cloud of scandal over failing to guard against money laundering and catering to dictators along with presidents.

Over the years, Allbritton's passionate devotion to "the Riggs" never flagged, nor did his strong personal intervention in the bank's direction or his cultivation of rarefied segments of the market -- embassies, trusts, private banking for the richest of the rich.

...

Two top bank regulators -- the Federal Reserve Board and the Treasury Department's Office of the Comptroller of the Currency -- recently began a targeted review of Joe Allbritton's activities at the bank and its holding company, Riggs National Corp., to see if he violated any laws and whether any civil fines or criminal referrals to the Department of Justice should be made, government sources familiar with the investigation said.

At issue is whether Allbritton was an active participant in the daily operations of the bank even though he has not been a director or executive of the bank for three years, the sources said. If regulators determine he was an active participant, then he could face fines or other sanctions, government sources said.

....

http://www.washingtonpost.com/wp-dyn/articles/A56372-20...

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Thurs&Fri. WaPo's in here:

http://www.democraticunderground.com/discuss/duboard.ph...

http://www.democraticunderground.com/discuss/duboard.ph...

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Some others:

http://www.democraticunderground.com/discuss/duboard.ph...

http://www.democraticunderground.com/discuss/duboard.ph...

http://www.democraticunderground.com/discuss/duboard.ph...

http://www.democraticunderground.com/discuss/duboard.ph...

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Related WaPo Sat:

Pittsburgh Bank To Buy Riggs
PNC Financial to Pay $705.2 Million For Embattled Washington Institution

By Terence O'Hara
Washington Post Staff Writer
Saturday, July 17, 2004; Page A01


Riggs National Corp., reeling from multiple probes into money laundering within its once-elite embassy banking division, yesterday agreed to sell out to a Pittsburgh banking company for a bargain price.



One of Washington's oldest commercial institutions, the 168-year-old bank will become part of PNC Financial Services Group Inc., which will pay a combination of cash and stock worth $705.2 million. The deal is not expected to be made final, however, for at least another six months, and PNC has reserved the right to cancel the purchase if regulators or prosecutors charge Riggs with any further wrongdoing.

PNC officials said the purchase will give them a low-priced entry into one of the most profitable and fastest-growing banking markets in the country. All of Riggs's 51 branches, about three-quarters of which are in the District, will be renamed PNC.

Joe L. Allbritton, the face of Riggs for more than 20 years after he bought it in 1981, and his son Robert, the current chief executive, will cash in stock options worth millions in the deal. Joe Allbritton steadfastly refused to sell Riggs during an era of bank consolidation when ordinary shareholders might have realized more of a premium and instead charted it on a course that produced a long, slow decline in earnings and prestige. At the same time the bank was cultivating high-risk relationships with foreign leaders including officials of the Saudi government, Chile's Augusto Pinochet and Equatorial Guinea's Teodoro Obiang Nguema.

There was no showy news conference with both merger partners proclaiming the deal, which valued Riggs on the low end of comparable purchases. In a written response to a list of questions, Joe Allbritton, who remains the company's biggest shareholder, expressed regret that the bank will lose its independence. But he said, "Now it is time to move along and let others manage Riggs into the future."

....

http://www.washingtonpost.com/wp-dyn/articles/A56367-20...


for all links - original thread
WaPo: Allbritton Loses Riggs Bank (front page, day 3)
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=691609