April 25, 2024

You are here: Home / Archives for stress test

Advertising: GE Capital Puts on a Lending Roadshow

May 8, 2013 by Leave a Comment

GE CAPITAL this week is embarking on an elaborate advertising campaign with Slate.com featuring a six-month roadshow across the United States meant to stimulate its lending to midsize businesses.

According to research done by the National Center for the Middle Market at Ohio State University, businesses with revenue of $10 million to $1 billion account for more than 43 million jobs in the United States and one-third of the national private sector gross domestic product. GE Capital underwrites the center, founded in 2011. Steven Winoker, who follows General Electric for Sanford C. Bernstein Company, called lending to middle-market businesses a “profitable business and a core business” for GE Capital, adding that it was “probably better at originating this kind of business than its competitors because of its industrial heritage.”

According to Mr. Winoker, GE Capital generated 47 percent of total earnings for General Electric last year, up from 28 percent in 2009; he also said commercial lending and leasing — a large part of which is to midsize businesses — was responsible for about a third of GE Capital’s profit last year.

Mr. Winoker said G.E. generally had a “more advanced view of advertising and marketing and is more aggressive in its approach to marketing than most industrial companies, from its heritage of owning” NBC Universal, whose sale to Comcast was completed last year.

Nicholas P. Heymann, who follows G.E. for William Blair Company, said that one factor behind the campaign might be possible changes in banking regulations resulting from the Dodd-Frank law’s stress test for 2013 that could limit major banks’ ability to lend to smaller businesses.

“Some of GE Capital’s highest returns on investment come from its middle-market lending portfolio,” he said. “If there are changes from a regulatory standpoint, GE Capital wants to be optimally positioned to take advantage of any void that may be created from restricted money center bank lending.”

The campaign — which began Monday in Kansas City, Mo., and is considered native advertising, or content sponsored by advertisers — is the most elaborate initiative created by SlateCustom, the custom-publishing arm of Slate.com, the online magazine. Previous native advertising on Slate.com included a campaign by the Dairy Council, which looked at the impact of last year’s drought on dairy farmers, and distribution of a video promoting Coca-Cola’s anti-obesity campaign.

Ian Forrest, vice president of global marketing at GE Capital, said his company had run traditional banner advertising on Slate.com for the last two years. “The performance worked really well against our core target audience — middle-market, C-level executives,” he said.

He also said the new roadshow, a collaboration jointly developed by GE Capital and Slate.com, was aimed at providing a “holistic, 360-degree view of the middle-market opportunity,” and also to “touch customers, prospective customers, employees and policy makers, to start a dialogue and discussion.” Another goal, he added, is to motivate legislators to pass new regulations in support of middle-market business growth.

“The Roadshow for Growth” entails a bus tour through various cities across the United States. After Kansas City, it moves on to St. Louis, Indianapolis, Chicago, Detroit, Cleveland, Pittsburgh, New York, Dallas, Atlanta and Los Angeles, among others. It will end in Columbus, Ohio, in late October.

At each stop, the roadshow will host different events, like town hall discussions, conversations with the city’s mayor, and visits with middle-market businesses. In Kansas City on Monday, for example, there was a meeting with Mayor Sly James and a town hall session with GE Capital employees, while the Chicago visit on Thursday is to include a discussion moderated by Jacob Weisberg, chairman of the Slate Group, and featuring Mayor Rahm Emanuel and economist Austan Goolsbee, chairman of the Council of Economic Advisers during the first term of the Obama administration.

Daily blog posts, video and commentary on the roadshow will be published on a special Web site, roadshow.slate.com. The Web site is being promoted as a “sponsored section” on slate.com.

Lindsay Nelson, vice president of integrated programs for Slate.com, said her company had gone to “great lengths” to make it clear to readers that the roadshow’s online section was “a special section brought to you by GE Capital, SlateCustom, National Center for the Middle Market,” via a note on the site and a separate pop-up message.

This disclaimer is no doubt meant to avoid controversy like that generated in January when The Atlantic ran a story on its Web site about the Church of Scientology that resembled its regular content, though it was labeled “sponsored content.”

Mr. Forrest said GE Capital would promote the roadshow on Slate.com, various G.E. Web sites, and through digital advertising on Web sites of Yahoo Finance and Bloomberg. He said the total budget for the roadshow would be between $1.5 million and $2 million.

According to Kantar Media, GE Capital’s advertising expenditures in the last five years ranged from a low of $4.3 million in 2008 to a high of $58 million in 2010; last year’s spending was $9.3 million, almost $2 million of which was for Internet display advertising.

Loren Ghiglione, a professor at Northwestern University’s Medill School of Journalism, said the collaboration between Slate.com and GE Capital raised the question of “what it will do to the reputation of Slate.”

The program’s aim to motivate legislators to pass new regulations supporting middle-market businesses “sounds like lobbying to me. I don’t think that journalism and lobbying are the same thing,” he said.

Sharmila C. Chatterjee, a senior lecturer at the M.I.T. Sloan School of Management who studies business-to-business marketing, called the roadshow a “very nice way for GE Capital to connect with customers, establish credibility and gain their trust, three very important things in the day of information bombardment.”

She warned, though, that if the initiative was “hijacked by interest groups and gets politicized, the goal will not be fulfilled.”

Article source: http://www.nytimes.com/2013/05/08/business/media/ge-capital-puts-on-a-lending-roadshow.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Advertising: GE Capital Puts On a Lending Roadshow

May 7, 2013 by Leave a Comment

GE Capital this week is embarking on an elaborate advertising campaign with Slate.com featuring a six-month roadshow across the United States meant to stimulate its lending to midsize businesses.

According to research done by the National Center for the Middle Market at Ohio State University, businesses with revenue of $10 million to $1 billion account for more than 43 million jobs in the United States and one-third of the national private sector gross domestic product. GE Capital underwrites the center, founded in 2011. Steven Winoker, who follows General Electric for Sanford C. Bernstein Company, called lending to middle-market businesses a “profitable business and a core business” for GE Capital, adding that it is “probably better at originating this kind of business than its competitors because of its industrial heritage.”

According to Mr. Winoker, GE Capital generated 47 percent of total earnings for General Electric last year, up from 28 percent in 2009; he also said commercial lending and leasing — a large part of which is to midsize businesses — was responsible for about a third of GE Capital’s profit last year.

Mr. Winoker said G.E. generally has a “more advanced view of advertising and marketing and is more aggressive in its approach to marketing than most industrial companies, from its heritage of owning” NBC Universal, whose sale to Comcast was completed last year.

One factor behind the campaign suggested Nicholas P. Heymann, who follows G.E. for William Blair Company, are possible changes in banking regulations resulting from the Dodd-Frank law’s stress test for 2013 that could limit major banks’ ability to lend to smaller businesses.

“Some of GE Capital’s highest returns on investment come from its middle-market lending portfolio,” he said. “If there are changes from a regulatory standpoint, GE Capital wants to be optimally positioned to take advantage of any void that may be created from restricted money center bank lending.”

The campaign — which began Monday in Kansas City, Mo., and is considered native advertising, or content sponsored by advertisers — is the most elaborate initiative created by SlateCustom, the custom-publishing arm of Slate.com, the online magazine. Previous native advertising on Slate.com included a campaign by the Dairy Council, which looked at the impact of last year’s drought on dairy farmers, and distribution of a video promoting Coca-Cola’s anti-obesity campaign.

Ian Forrest, vice president of global marketing at GE Capital, said his company had run traditional banner advertising on Slate.com for the last two years. “The performance worked really well against our core target audience — middle-market, C-level executives,” he said.

He also said the new roadshow, a collaboration jointly developed by GE Capital and Slate.com, was designed to provide a “holistic, 360-degree view of the middle-market opportunity,” and also to “touch customers, prospective customers, employees and policy makers, to start a dialogue and discussion.” Another goal, he added, is to motivate legislators to pass new regulations in support of middle-market business growth.

“The Roadshow for Growth” entails a bus tour through various cities across the United States. After Kansas City, it moves on to St. Louis, Indianapolis, Chicago, Detroit, Cleveland, Pittsburgh, New York, Dallas, Atlanta and Los Angeles, among others. It will end in Columbus, Ohio, in late October.

At each stop, the roadshow will host different events, like town hall discussions, conversations with the city’s mayor, and visits with middle-market businesses. In Kansas City on Monday, for example, there was a meeting with Mayor Sly James and a town-hall session with GE Capital employees, while the Chicago visit on Thursday is scheduled to include a discussion moderated by Jacob Weisberg, chairman of the Slate Group, and featuring Mayor Rahm Emanuel and economist Austan Goolsbee, chairman of the Council of Economic Advisers during the first term of the Obama administration.

Daily blog posts, video and commentary on the roadshow will be published on a special Web site, roadshow.slate.com. The Web site is being promoted as a “sponsored section” on slate.com.

Lindsay Nelson, vice president of integrated programs for Slate.com, said her company had gone to “great lengths” to make it clear to readers that the roadshow’s online section is “a special section brought to you by GE Capital, SlateCustom, National Center for the Middle Market,” via a note on the site and a separate pop-up message.

This disclaimer is no doubt meant to avoid controversy like that generated in January when The Atlantic ran a story on its Web site about the Church of Scientology that resembled its regular content, though it was labeled “sponsored content.”

Mr. Forrest said GE Capital would promote the roadshow on Slate.com, various G.E. Web sites, and through digital advertising on Web sites of Yahoo Finance and Bloomberg. He said the total budget for the roadshow would be between $1.5 million and $2 million.

According to Kantar Media, GE Capital’s advertising expenditures in the past five years ranged from a low of $4.3 million in 2008 to a high of $58 million in 2010; last year’s spending was $9.3 million, almost $2 million of which was for Internet display advertising.

Loren Ghiglione, a professor at Northwestern University’s Medill School of Journalism, said the collaboration between Slate.com and GE Capital raises the question of “what it will do to the reputation of Slate.”

The program’s aim to motivate legislators to pass new regulations supporting middle-market businesses “sounds like lobbying to me. I don’t think that journalism and lobbying are the same thing,” he said.

Sharmila C. Chatterjee, a senior lecturer at the M.I.T. Sloan School of Management who studies business-to-business marketing, called the roadshow a “very nice way for GE Capital to connect with customers, establish credibility and gain their trust, three very important things in the day of information bombardment.”

She warned, though, that if the initiative is “hijacked by interest groups and gets politicized, the goal will not be fulfilled.”

Article source: http://www.nytimes.com/2013/05/08/business/media/ge-capital-puts-on-a-lending-roadshow.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

DealBook: Stress Test Reveals European Banks Need More Capital

December 8, 2011 by Leave a Comment

European regulators told many of the region’s biggest banks, including Deutsche Bank and Commerzbank, on Thursday to raise more capital, as signs mount that the European sovereign debt crisis may worsen.

With the region’s leaders gathering in Brussels in their latest bid to shore up the euro, the European Banking Authority announced that banks over all needed to raise 114.7 billion euros, or $152.7 billion, in the event the debt crisis is not resolved soon. That was more than estimate of 106 billion euros in October.

The banking authority’s assessment showed that banks in Germany, Italy and Spain would have to raise more capital than previously thought, while banks in France had all they needed. In all, the stress tests showed that 31 of 71 banks needed stronger reserves.

Bank shares took a hit on Thursday. Commerzbank was 9.5 percent; Deutsche Bank, off 4.3 percent; and Unicredit, down 7.2 percent.

The banking authority came under fire earlier this year for conducting tests in which it did not consider the possibility that a euro-zone country might default. Bowing to pressure, the latest test took into account potential losses on the vast amounts of bonds banks hold from troubled European governments.

American banks hold smaller amounts of European sovereign debt. But the Federal Reserve is also planning new tests to gauge the ability of banks in the United States to weather with any further deterioration in Europe, which is also on the cusp of a recession.

The crisis has become a looming concern for President Obama, who has warned it could impact the country’s economic recovery. The Treasury secretary, Timothy F. Geithner, visited several European capitals this week, urging leaders to address the debt crisis more urgently.

The banking authority’s test results came after the European Central Bank unveiled new support for Europe’s banks, which have been having trouble getting other financial institutions to lend them money amid an erosion of confidence. More European banks have had to rush to borrow from the central bank recently to help finance their operations, a process the E.C.B. said it would now make easier.

With their financing squeezed, some banks could face trouble raising new capital. Already, BNP Paribas, Société Générale, Commerzbank and other giants have said they would sell assets to raise new money. A number of banks have claimed that the capital requirements would force them to cut lending to businesses and consumers — a step that would further depress Europe’s teetering economy.

Mario Draghi, the president of the E.C.B., expressed concern Thursday that the tougher standards for banks could prompt them to stop making loans, creating a credit crunch.

While the additional capital ‘‘should improve the euro-area banking sector’s resilience over the medium term,’’ he said at a news conference, ‘‘it is essential that national supervisors ensure that the implementation of banks’ recapitalization plans does not result in developments that are detrimental to the financing of economic activity in the euro area.’’

In response to fears that banks will curtail lending, regulators expanded the definition of reserves to include so-called contingent capital, which is borrowed money that automatically converts to equity in a crisis. That concession should make it easier for banks to meet the requirements.

Banks are also restructuring their debt to bolster their reserves. Some financial firms are buying back or exchanging hybrid securities, in a complex maneuver that allows them to improve their capital levels without raising additional money.

‘‘There’s no magic bullet to this problem,’’ said Karl Goggin, a banking analyst at NCB Stockbrokers in Dublin. He said banks had three options to raise capital: tap private investors, sell assets or turn to their government.

‘‘Most will turn to the first two options, but some will have to consider state aid,’’ he said.

The test of 71 banks revealed new problems in Germany, where banks will have to raise new capital totaling 13.1 billion euros, more than twice the amount thought just a month ago. Deutsche Bank, the country’s largest lender, will need to raise 3.2 billion euros, while Commerzbank must increase its reserves by 5.3 billion euros.

The German Finance Ministry said Wednesday it planned to propose legislation to revive the government fund it used in 2008 to rescue banks to help banks increase their reserves. In a break from previous practice, the government will be able to force banks to accept aid.

Banks in Spain must raise 26.2 billion euros. The nation’s banking giants, including Grupo Santander, are looking to assets sales to supplement their capital. The banking authority has said Italian banks must raise 15.4 billion euros.

For years, banks in Europe and the United States loaded up on the bonds of euro-zone governments. Regulators encouraged banks to buy more by deeming the bonds risk free, based on the assumption that no sovereign nation in the 17-member euro monetary union would ever default.

The banking authority’s assessment on Thursday underscored how those assumptions had been shattered, especially as the sovereign crisis swirls to Italy and larger countries.

‘‘As sovereigns go, so the banks will go,’’ said Gary Jenkins, a strategist at Evolution Securities in London. ‘‘If the sovereign situation deteriorates, the entire banking sector will deteriorate with it very quickly.’’

Jack Ewing contributed reporting from Frankfurt, and Julia Werdigier and Mark Scott from London.

Article source: http://dealbook.nytimes.com/2011/12/08/stress-test-reveal-european-banks-need-more-capital/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Europe Treads Carefully on Stress Tests for Nuclear Plants

May 25, 2011 by Leave a Comment

BRUSSELS — European regulators agreed Wednesday that new safety tests for the region’s 143 operating nuclear reactors, called for in the wake of the nuclear disaster in Japan, would include some man-made disasters as well as natural ones.

But the European Commission said there would be a separate process to check whether nuclear operators could adequately thwart acts of terrorism, because of sharp differences among governments about encroaching on sensitive areas of defense and security.

The E.U. Energy Commissioner Günther Oettinger told a news conference that the tests would be robust.

“The quality and the depth of this stress test is such as to fulfill the requirements of the European citizen to live in a safe environment,” said Mr. Oettinger. “All of this will be done in as transparent way as possible.”

Greenpeace, an environmental group that opposes nuclear power, strongly disagreed.

The tests “won’t be independent, won’t cover plans for emergencies and won’t always tell us whether some of Europe’s most obvious terrorist targets are protected or not,” said Jan Haverkamp, a nuclear policy adviser at Greenpeace.

Britain, France and the Czech Republic were among countries that had fought hardest to water down the tests, said Mr. Haverkamp.

France relies on nuclear power for about 80 percent of its electricity and is a major exporter of nuclear technology. Britain generates around 18 percent of its electricity from nuclear but faces the prospect of a worsening energy shortfall if forced to shut its reactors. The Czech Republic still mines uranium for sale to nuclear power generators.

Still, the prospect of a nuclear meltdown in Japan has triggered public protests in Europe against atomic power, which remains a hugely sensitive matter after the nuclear disaster in Chernobyl in 1986. The German government reversed a previous decision to extend the life of its nuclear plants.

E.U. governments had called for the tests in March, in the wake of the disaster in Japan. Although they remain voluntary, the European Commission recommended that the 14 member states with reactors producing electricity begin testing for so-called man-made events by June 1.

Those tests would in some cases be more rigorous than routine safety checks.

For example power plants built to withstand earthquakes of a magnitude of six on the Richter scale would be tested for earthquakes of a higher magnitude, although it would be up to national authorities to define how much tougher to make the criteria.

The tests also would include peer-review teams composed of seven people, drawing from regulators from all 27 E.U. countries and the European Commission. Those teams would have leeway to conduct inspections inside nuclear plants.

According to the commission, the key goal of the tests is to prevent the kind of accident in Europe that struck the reactors at Fukushima, Japan, after the earthquake and tsunami knocked out the power supply that was necessary to cool the fuel rods.

The commission said nuclear operators would need to describe what would happen if their reactors lost power for “several days” and what measures were in place if primary back up systems powered by batteries also failed.

The tests would include a review of containment systems to ensure they could withstand an air crash or the explosion of a nearby oil tanker, whether as a result of an accident or a terror attack. The tests would also seek to ascertain whether there were adequate systems to put out any resulting fire from explosions occurring near nuclear power plants.

E.U. authorities still need to set a schedule for checking whether reactors could withstand a wider range of terror attacks, possibly including cyber attacks. Those tests are far more sensitive because governments want to avoid revealing any vulnerabilities of their reactors.

The commission said that reactors failing the tests should be shut down and decommissioned if safety upgrades were too difficult or too expensive. But it acknowledged that it had no authority to order such shutdowns.

The European Commission said national operators and regulators had agreed to make their findings public, despite initial concerns in Paris and London that publishing certain information might encourage attacks. Governments would present a final report on the tests at the end of year.

Article source: http://feeds.nytimes.com/click.phdo?i=acac9d0658bcbcd9ef3366514abd9bba

Filed Under: Business News Tagged With: , ,