American Fortune Life

Beverly Hills Little Versailles.

The classic conference room is already full of people, Andy sitting in the main seat, looking down quickly at the details given to the think tank by the U.S. Federal Savings Insurance Corporation at the Federal Bank of Mac, India.

The number of think-tank members who arrived from New York reached 50, most notably 33 branches of the Indian Mac Federal Bank, even though 3,800 employees had been laid off before takeover, which was half the size of the Indian Mac Bank. He needs enough of himself to complete the acquisition in a short time.

After touching a high of $50.11 per share on 8 May 2006, the Bank of India dropped 87 per cent in 2007 and again by 95 per cent this year. On the last trading day before the collapse, its stock closing price was $0.28.

The U.S. federal government expects to lose up to $8 billion from Mac Bank of India, which makes FDIC anxious to find "Patchman” to take over the bank, and time is running out due to another wave of bank failures.

Of the Bank of India's major assets, $23.5 billion were commercial loans, mortgage loans and subprime loans. Whoever takes over the bank will face enormous risks.

“I have convinced FDIC to sell Mac Bank of India for about $1.5 billion and the sale agreement includes Mac Bank of India branches, deposits and assets.

FDIC also agreed to sign a loss sharing agreement... “

Hearing Al's tone, Andy couldn't help but look at the data slightly. Some stared at Al and said uncertainly: "Loss sharing agreement?! ”

Alvitelli laughed confidently and said, “Actually, this is what I was temporarily thinking when I negotiated with the FDIC, and this group of guys didn't want to be idle during the time they took over the Bank of India, not only selling a lot of subprime housing loans to reduce their deficit, but also offering a lot of similar housing loans to Fangli Mei and Fangli Mei, which issued securitized mortgage loans that were falling in a straight line, and I warned them that if they did, we would refuse to buy them.

Based on the details they provided, we assessed the total assets of Mac Bank of India at $32 billion and the actual assets (loans less deposits) at $13.9 billion.

Our advantage is cash payments, and I told them that if they wanted us to pay more cash, we wouldn't accept some serious assets.

Ultimately, FDIC agreed to hold some of the more problematic assets and to sign a risk-sharing agreement under which FDIC would cover 95 per cent of the losses once the Bank of India's loan portfolio had lost more than 30 per cent. “

Andy's eyes glinted and he couldn't help but laugh: “That means I can complete the acquisition of 33 branches, deposits and assets of Mac Bank of India for only $1.5 billion! ”

“We also need about $1.3 billion in capital to pay in advance for the loss risk of our 5% loan portfolio! ”

“How dare they! Aren't they worried that we'll just get rid of the baggage on the high-risk loans?” Andy couldn't help but admire the courage of these guys at FDIC.

Knowing that under normal procedures, banks typically try to avoid losses even if the borrower violates the terms of the loan. For example, repossession of property, auctioning of collateral such as automobiles, etc., while a loss sharing agreement implies that future loss portions will be borne by the Government.

“Well, it's not that they're bold, it's that there's no way, they've paid 1.3 billion in savings insurance compensation over the past two weeks, there's no fixed price to measure the value of those loan portfolios, the financial markets have stopped, people don't want to buy anything, and FDIC has to sign risk-sharing agreements, but that doesn't change the fact that we're equally exposed to significant risks. ”

“Oh, it's all right, isn't it 1.3 billion... Oh, that's really funny, it's 1.3 billion again, it's not my money anyway, it's all the Fed's, so I lost it, so good, haha, so good, I used 1.5 billion to buy Indian Mac Bank with 33 branches and 9.6 billion deposits, it's already made a lot of money, just let them pay for it. ”

Andy patted the table, haha laughed, everyone else in the room unnaturally smoked the corner of their mouth, Nima, the boss' festivities are really silent, no sense of responsibility? It was decided from the start to get rid of the FDIC!

Well, it looks like this pit FDIC is gonna have to jump if it doesn't jump.

“Oh, that's what I thought!” With a harmless smile on Alvitelli's face, he handed Andy a paper saying, "This is my strategic layout for taking over the Bank of India, Mike, in three steps. ”

Andy is in a really good mood right now, and the smile on his face is getting brighter and brighter, and his big white teeth can't be hidden at all, and he takes over the documents Al handed over and starts to look.

“Actually, to achieve the goal of a quick turnover, we just need to deal quickly with bad loans and other assets from Mac Bank of India, and anyway the FDIC signed a loss-sharing agreement, which will make our work a lot easier.

In fact, we're already starting to do the first two steps, like completing the acquisition as soon as possible, and the second step is to build the bank's asset base by taking over other failed banks, such as Miami Valley Bank, Douglas National Bank of Missouri, Hume Bank of Missouri, and we can continue to acquire small, closed banks in the future to expand the branch and lay the groundwork for building market share for the third step.

And finally, repackage these assets into a new institution, a new bank! The new bank's return to a single model avoids the non-traditional mortgage lending business that led to the bankruptcy of Mac Bank of India, making it a major provider of high-quality mortgage loans and equivalent priority loans.

The last step I didn't write down, whether you want to turn it into a private bank or relist it, will strengthen your boss's ability to fund it and make it a stable source of savings! ”

Andy looked at the plan, sighed, closed it and pressed his right hand against it, looked at his think tank chief advisor with incredible satisfaction and praise, and said, "If it weren't for you, I'd really like to make you CEO of the new bank. ”

“Boss, honestly, I'm not in the right position to run a new bank to deal with future non-performing loans and other assets, what we need is an expert who can sell to destroy the economy! ”

When he heard Al's words, Andy's face changed slightly and his expression grew condensed, while the other think-tank members looked at his think tank boss in a condensed way, a little stunned, and wondered why his boss had proposed such a choice of direction.

“Yes, we need a candidate who can blatantly block road robbery to tap the profits from risk-sharing agreements and encourage foreclosure to trigger loss-sharing agreements... ”

Al was like saying it was irrelevant, and the smile on his face had never dissipated, even though everyone, including Andy, had changed their face because of his ruthlessness.

To be honest, Andy didn't think about using his own bank to trigger a loss-sharing agreement, because foreclosure would mean evicting people from their homes, and banks getting real estate, which would make his new bank notorious, and perhaps occupying Wall Street in the future, and Andy Smith would be one of the main targets of protest.

Andy may not feel much like watching someone else make the homeless, but his bank is making these things himself, and to be honest, he's a little hesitant.

Al flickered in a deep pair of eyes and saw a young and big BOSS with a heavy face down his chin. It was very clear that the heart of Big BOSS was not cold enough. Profit was the philosophy of life that a successful big capitalist needed to implement. Unbeknownst softness and compassion would only miss the opportunity. His pupils narrowed slightly, Al said faintly: "The bank only has to realize 50 percent of the foreclosures. FDIC expects to lose $10 billion in total to Mike Bank of India. If we want to, this money can fall into the boss's pocket. ”