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Kit Menkin’s Leasing News www.leasingnews.org Thursday, April 18, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines---- CIT Tyco Lives Recovery is strong, new data indicate KeyCorp Reports First Quarter 2002 Earnings Wives of Leasing Execs find power of love in berry drink from Sweden Beijing Corporate Credit Information System Enters Into Operation Baltimore, Here I Come Recruiters Are Misunderstood---Suggests a Feature Section BancPartners in the Great State of Texas Leasing News----“We Get Letters” Wells Fargo Reports Record Quarterly Earnings Per Share of $.80 Glory days long gone for venture capital, FleetBoston trims its sails Apple beats Wall Street expectations Nigerian E-mail Scam Still Dupes People ###
Denotes press release ___________________________________________________________ CIT
Tyco Lives Amazing,
CIT business is doing great, despite all the secrecy and problems with
the Tyco takeover. It shows that a company does have a personality and
a spirit. There is such a thing as “corporate identity.” Congratulations
to all the employees at CIT Tyco for working your tails off. Leasing
News salutes you. ______________________________________________________________ Recovery is strong, new data indicate Industrial output rate highest in nearly two years; prices stable By Sue Kirchhoff, Boston Globe Staff WASHINGTON - Industrial production rose at the quickest pace in nearly two years in March, while consumer inflation stayed under control despite a sharp increase in energy prices, the government said yesterday, offering fresh evidence that the economic recovery is gaining a firm foothold. There were some glimmers of potential weakness, however. The Commerce Department reported that new housing starts fell by nearly 8 percent from February to March, the steepest decline in two years. But analysts said some falloff was expected, given that February's figures were exceptionally high. The markets focused on the positive news, and a spate of better-than-expected earnings reports from companies including Texas Instruments. The Dow Jones industrial average ended the day up 207.65 at 10,301.32, while the Nasdaq climbed 63.01 to close at 1,816.79. ''Today's industrial production numbers suggest that, instead of just emptying the shelves, businesses finally are starting to place new orders,'' said Bill Cheney, chief economist at John Hancock Financial Services. ''At least in the short term, this means better times for the nation's manufacturers. ''Over the longer term, they, like the rest of the economy, need business spending to pick up, or the rebound could be anemic,'' Cheney said, adding that the economy appeared to have expanded by as much as 5 to 6 percent in the first quarter of 2002, but should slow down in coming months. Federal Reserve chairman Alan Greenspan may offer more signs about the direction of the economy - and interest rates - when he testifies before Congress today. Investors will be looking for clues about how quickly the Fed may start to raise rates, which are now at the lowest level since the 1960s. With inflation remaining within bounds despite the spike in energy prices, the Fed may now have more breathing room. The Labor Department said yesterday that consumer prices increased by a manageable 0.3 percent in March. The figure was well below forecasts and only a slight increase from February's 0.2 percent rise. Further, the ''core'' rate of inflation, which does not include energy and food prices, rose only 0.1 percent. The energy index rose 3.8 percent in March after falling 0.8 percent in February, the Labor Department said. Prices for petroleum-based energy products spiked by 8 percent. Seasonal price increases, concerns about the conflict in the Middle East and supply disruptions in Venezuela have been pushing prices higher in recent days. Analysts said current prices were a drag on the economy, but did not see a direct threat to the recovery unless escalating violence in the Middle East pushed prices still higher. In a separate report, the Federal Reserve said output at the nation's mines and factories - which bore the brunt of the manufacturing-led recession - rose 0.7 percent in March. The report marked the third consecutive monthly increase, with output now at the highest level since August 2001. The gains, which followed months of drastic inventory reductions, were widespread, from autos and home electronics to furniture, appliances and business equipment. Clothing production rose more than 11 percent in the first quarter, nearly reversing a sharp drop at the end of 2001. Aircraft was among the areas showing decline. Factories are still operating at below average rates, despite the improvement. The Fed reported that production in the high-tech sector, including computers and office equipment, communications equipment and semiconductors, increased during the month. Those sectors were still well below year-ago levels, however. In a third report, the Commerce Department said housing starts declined by about 8 percent to 1.65 million in March. While that was a big drop, housing starts were still above year-ago levels. Further, housing starts for the first quarter of the year, overall, were strong. ''Today's report shows housing production is right in line with our forecasts, and the decline is certainly no cause for alarm in the housing industry,'' said Gary Garczynski, president of the National Association of Home Builders. Housing was one of the bright spots in the economy last year, as consumers took advantage of low long-term interest rates to refinance their mortgages and buy new homes. There have been concerns that the housing market could decline or soften in coming months if long-term interest rates start rising. Bruce Steinberg, chief economist at Merrill Lynch, said he did not expect housing to soften significantly. The decline in housing starts was due partly to warmer than usual weather earlier in the year, which may have pushed forward some activity, he said. ''Today's data indicate that there is no inflation and the housing market remains healthy, although it weakened in March,'' said Steinberg. Sue Kirchhoff can be reached at kirchhoff@globe.com. _____________________________________________________________________ ##########
######################################### KeyCorp
Reports First Quarter 2002 Earnings
(courtesy
of ELAonliine.com ) ####
######################################### _____________________________________________________________________________________- Wives
of Leasing Executives find power of love in berry drink from Sweden MORAGA,
CA – Barbara
Lester, wife of Charlie, swears by the exlir. Barbara Kropschot, wife of
Bruce, says it is her daily drink. Pat Roberts drinks it daily for
breakfast. The
incoming president of the United Association of Equipment Leasing, Betty
Kerhoulas, says her husband won’t let her drink it any more.
Bob Cragin of
CIT says his wife can’t handle it. Ginny
Young adds vodka and calls it a “Leasing Wallbanger.” (
If you run into her
at the UAEL Leasing Conference in Las Vegas, ask her why? editor). Now
Debbie Levy is hoping to put her Moraga deli on the map by becoming
one of the first to sell the drink in the East Bay. The owner of Gourmet
Glazed Hams Deli Cafe and Catering last week began peddling Niagara,
the $5-a-bottle elixir that has developed a reputation for triggering
the libido. “We
heard the leasing industry was suffering and executives coming home in
poor moods, not happy with their business, “ she said. “
Women were suffering.
All we wanted to do was bring back a little romance.” The
drink has taken the leasing industry by storm. Bob Fisher of Firerock Capital
drinks two bottles a day. His wife won’t let him drink more. “He
used to come home, dragging his feet, falling to sleep while eating, but
now with Niagra, he is awake until all hours of the night, “
she explained. “That’s
why I told him no more than two bottles of Niagra a day.” Bob
Teichman’s wife says it saved their marriage. A
Food and Drug Administration spokeswoman said the agency categorizes
it as a dietary supplement, which it doesn't regulate, and would not
comment on the drink's effectiveness. None of the leasing association
executives would make a
comment, except for Joanie Dalton, who says her husband now comes
over to
Emeryville for a long noontime lunch since he started drinking Niagra. Because
its name rhymes with the name of the popular erectile dysfunction
drug, Niagara won the distinction "the female Viagra" when
it first became popular last year. Pfizer then filed a lawsuit against
Williams, and the Swedish drink manufacturer announced in August it
would change Niagara's name to Nexcite. Levy is still selling the
drink under the Niagara label. “Maybe
it might spark the leasing industry.” says Rochelle Goodman.
“ It certainly
sparked Ken.” (
Yes, this story appeared in yesterday’s Leasing News, but no
one commented, so
re-wrote it. Niagra would be a great benefit to the leasing industry.
editor ) ______________________________________________________________ Beijing Corporate Credit Information System Enters Into Operation At a press conference on March 28, the Beijing Municipal government announced that the ¡°Beijing Corporate Credit Information System ¨CWarning System of Corporate Misconducts¡± has officially entered into operation. It is reported that the system is the first corporate credit platform in China which has been established by a local government. So far, this credit warning system has collected bad credit information of 414 enterprises and 60 individuals. The Corporate Credit Information System consists of four kinds of information: 1) Corporate identification and registration information, including information about a company's registration, annual inspection, and administrative approval; 2) Information about a company’s meritorious deeds, including awards and commendation received by a company or its legal representative from governments at municipal level or above. 3) Early warnings of corporate misconducts, including information about general violation of law and regulation by a company, and corporate discredits which receive administrative punishment or circulated criticism. 4) Warnings of corporate misconducts, including information about serious corporate violation of laws and regulations, and restriction imposed by related administration department on a company’s registration, outbound investment and administrative approval. The establishment of the credit warning system is the first step in the Beijing Municipal government's effort to build a Corporate Credit Information System. The warning system will include records held by all administrative departments of the Beijing Municipal government and judicial offices at all levels about the administrative punishments and criminal sanctions against companies as a result of severe violations of law. At the same time, the Beijing Municipal government will put restrictions on a company’s registration, outbound investment and administrative approval. The system applies to all companies which register through the Beijing Administration of Industry and Commerce and run business in the Beijing administrative area. Any of these companies which have misconducts including jeopardizing transaction security, disrupting the order of the market economy, or infringing on the legitimate interests of other dealers, will be included in the warning system and will become targets of special supervision by various administrative departments of the Beijing Municipal government. Since the information of the companies included in the credit warning system will be open to the public (through an official website, according to the People's Daily), people can check the credit condition of a certain company and decide, based on its credit, whether to do business with it. Baltimore, Here I Come If you are not going to the Eastern Association of Equipment Lessors or United Association of Equipment Leasing Joint Conference in Las Vegas, Nevada, you may want to consider this event: non-members are invited and encouraged to attend. The municipal and government leasing section is expanding in this economy. Here is an e-mail from Graham Hauck: AGL&F Conference Early Bird Registration Rate Extended to April 22! Register by the close of business on Monday, April 22 and as a member of AGL&F you will save $150.00, more than enough to help pay for your transportation to Baltimore. The Conference is at the Renaissance Harborplace Hotel - May 1-3. Details are on the Events/Meetings section of www.aglf.org or call 202.742.2453 and we can fax you the registration materials. We hope you join us..... Our Keynote Speaker is the Honorable Kurt Schmoke, the former Mayor of Baltimore and partner in AGL&F Member Firm - Wilmer, Cutler & Pickering. Mr. Schmoke is a Rhodes Scholar and during his tenure as Mayor of Baltimore, the city made a transition of monumental proportions, making Baltimore a model city in numerous ways. He will be a fascinating figure to listen to and one of the many inspiring aspects to our program for this conference. This is an opportunity you will not want to miss. Also, we are having our Thursday night networking and social event at Camden Yards - Home of the Baltimore Orioles who will take on the Kansas City Royals. We look forward to seeing you in Baltimore in just a couple of weeks, so don't delay - REGISTER TODAY! Graham Hauck Executive Director Association for Governmental Leasing and Finance 1255 23rd Street, NW Washington, DC 20037 202.742.AGLF (2453) fax: 202.833.3636 email: gsh@aglf.org Recruiters Are Misunderstood---Suggests a Feature Section Jonathan Zigman Address = 9990 Old Olive Street Road City = St. Louis State = MO Zipcode = 63141 Phone = 3149977010 Email = jonathan.zigman@csileasing.com Add me to the mailing list = yes
Leasing News has always been quite kind to the recruiting industry, and recent comments lead me to make a suggestion to take that one step further. Having been an independent recruiter servicing the leasing industry in the past, and currently the Director of Recruiting for a leasing company, I have long felt that the recruiting industry remains a mystery to most candidates and hiring authorities. How do recruiters work? What do they actually do? I think it would be a welcome subject for one of your e-mail forums. You could have a panel of a few of the recruiters who are listed in the classified section.... Just a thought. Thanks for the newsletter - I read it daily. Jonathan Zigman Director of Recruiting & Development Computer Sales International, Inc. BancPartners in the Great State of Texas Word on the street here is that the BancPartners affiliation in Texas has totally falling apart. What I heard yesterday is that the rest of the office has now quit and they have now hired a new rep to reopen the operation. This came from a pretty reliable source.
“ BancPartners of Texas,Inc. has legally changed its name back to Affiliated Corporate Services, Inc. A full press release of the details should be issued soon we are in the process of unwinding the merger with the BancPartners group. It is amicable and hope to have it finished by April 30. Will keep you posted. Jim Lahti Leasing News----“We Get Letters”
From: Michael Stulmaker <michael@mwleasing.net> Thank you - I very much enjoy starting my day with your newsletter. -- from Kathy McGurk : First, let me say that I always make a point to log on to www.leasingnews.org each week to keep up-to-date on industry news. I believe you are providing a real service to the dedicated professionals within our industry. You have demonstrated a willingness to "take on" tough issues. ------------------------ IRaymond@easternfunding.com Just wanted to say how much I like those show business trivia items especially the old TV shows that your dad wrote for (and I go back to radio too). Anyway, you mentioned one of my old favorites, Hans Conried and some of his credits. My memory isn't what it used to be, but didn't Hans also play Uncle Tonoose on the Danny Thomas Show and was also a guest on Mike Stokey's Pantomime Quiz in which Hans's knowledge of Shakespeare allowed him to come up with long Shakespearian quotes with only 2 or 3 words ( you are correct. editor) __ From: PAUL E HORGEN <paulhorgen@msn.com> Keep up the good work. I have to say that our subscription to Leasing News is worth every penny (More humor?) but seriously we have upgraded several infrastructure services and gained much specific knowledge thanks to you.
Thank You...and Best Wish's to you also...you are a breath of fresh air. Paul From: stsilva@msn.com Your newsletter is such a valuable source of industry information. I look forward to each morning's edition! I currently receive your newsletter at work, but no longer at my home email address which is: ******* Would you mind adding my second email? Sharon Silva ------------------------------------------------------------------------------------------------------------ #### ####################################################### Wells Fargo Reports Record Quarterly Earnings Per Share of $.80 SAN FRANCISCO--(BUSINESS WIRE)--April 16, 2002--Wells Fargo & Company (NYSE:WFC) First Quarter Highlights: -- Record diluted earnings per share of $.80(, up 19 percent from prior year's $.67 per share -- Record net income of $1.38 billion, up 18 percent from prior year's $1.17 billion -- Return on assets of 1.78 percent -- Return on equity of 20.01 percent -- Core revenue (excludes market-sensitive revenue and acquisitions) up 18 percent from prior year -- First improvement in credit quality since second quarter 2000 -- Net credit losses declined 9 percent from fourth quarter 2001 -- Non-performing assets flat compared with fourth quarter 2001 -- Average consumer cross-sell surpasses 4 products for the first time Note A: Earnings are before the effect of change in accounting principle. Under FAS 142, Goodwill and Other Intangible Assets, the Company was required to assess goodwill for impairment and to discontinue amortization of goodwill as of January 1, 2002. In the first quarter of 2002, the Company recorded a $276 million (after tax) transitional goodwill impairment charge as a cumulative effect of a change in accounting principle. per share of $.80 in the first quarter 2002, before the effect of an accounting change related to FAS 142, Goodwill and Other Intangible Assets (see Accounting Change -- FAS 142 Transition Adjustment), up 19 percent from prior year's $.67 diluted earnings per share. On the same basis, net income was a record $1.38 billion, up 18 percent from prior year's $1.17 billion. "Our 18 percent growth from first quarter 2001 in core revenue, which excludes market-sensitive revenue and acquisitions, continues to be among the best in any industry and demonstrates the ability of our 130,000 team members to partner effectively across our more than 70 businesses to earn more of our customers' business and provide them with great service," said Chairman and CEO Dick Kovacevich. "Our team members continue to prove that our strategy for market share growth works whether the economy is growing or in a recession. It's all about convincing customers to give us business they're already giving someone else. It's all about share of wallet. During the quarter, we surpassed four products per banking household for the first time in our company's 150-year history, and we're now more than halfway toward our ambitious goal of eight products per household. Also, according to SMR Research, Wells Fargo is now the number one home equity portfolio lender in the United States, with $28 billion in loans outstanding, growing 25 percent faster than the industry as a whole since the November 1998 Norwest-Wells Fargo merger. To commemorate our 150th anniversary on March 18, 2002, and to recognize and thank our team members for our continued market share growth and improved service quality, we awarded stock option grants for 150 shares of Wells Fargo stock to virtually all full-time team members, our fifth company-wide stock option award in seven years." Financial Performance With the adoption of FAS 142, effective January 1, 2002, amortization of goodwill is no longer in the income statement. In 2001, the Company incurred $144 million in the first quarter and $610 million for the full year in pretax expense for amortization of goodwill. Eliminating this expense would have increased net income in the first quarter of 2001 by $135 million ($.08 per share) and by $571 million ($.34 per share) for the full year. Comparisons below between 2002 and comparable periods in 2001 are presented as if goodwill amortization expense was excluded from 2001 periods. "We're very pleased with our financial performance in first quarter 2002," said Chief Financial Officer Howard Atkins. "Diluted earnings per share growth from $.75 per share in first quarter 2001 to $.80 per share in first quarter 2002 reflects an increase of more than $.09 per share in earnings from businesses other than market-sensitive activities and a decline in market-sensitive earnings from $.05 a year ago to under $.01 in the first quarter of 2002. Pretax market-sensitive revenue in first quarter 2002 was $18 million and was offset by $25 million in integration expenses, largely for the acquisitions of the Marquette banks and Texas Financial Bancorporation, which closed in February. We're also very pleased with the quality of the $.80 per share earnings which reflect another quarter of solid year-over-year core revenue growth, continued improvements in expense efficiency, and encouraging signs of credit quality improvement." Revenue Revenue of $5.96 billion for first quarter 2002 increased 14 percent from first quarter 2001. Excluding the effect of market-sensitive revenue and acquisitions, revenue for first quarter 2002 increased 18 percent from first quarter 2001. "Revenue growth from the first quarter of 2001 was driven by continued strong consumer loan growth, solid increases in consumer fee businesses, a higher net interest margin and good growth in core deposits," said Atkins. "On a sequential quarterly basis, the 6 percent annualized increase in revenue was due to those same growth factors, slightly dampened by flat investment management income due to the weak equity market, flat lending and loan-related transaction revenues in our commercial business in line with the first quarter economy, and typical first quarter seasonality." Loans Loans averaged $172 billion for first quarter 2002, up 8 percent over a year ago. Adjusting for acquisitions, average loans increased 6 percent from both a year ago and fourth quarter (on an annualized basis). "Commercial loans outstanding modestly declined in the first quarter in line with slow economic growth," said Atkins. "However, we are extremely pleased with the continued strong consumer loan growth largely driven by strong sales of our industry-leading home equity and home mortgage products." Consumer loans grew 17 percent annualized from December 31, 2001 to March 31, 2002. The Marquette banks and Texas Financial Bancorporation acquisitions completed during the first quarter added $3.5 billion of consumer and wholesale loans. Deposits Average core deposits of $178 billion for first quarter 2002 grew $21 billion, or 13 percent, since last year. After adjusting for acquisitions and money market sweep deposit accounts, core deposit growth was 7 percent. Average core deposits increased $2 billion, or 4 percent annualized, from fourth quarter 2001. "We are particularly pleased with growth of almost $2 billion in core consumer checking and savings balances since these accounts typically are the first of several products purchased by new households," said Atkins. Net Interest Income Net interest income on a taxable-equivalent basis was $3.68 billion in first quarter 2002, up 30 percent from the first quarter of last year, and up 6 percent from the fourth quarter of 2001. The increase in net interest income was driven by the growth in consumer loans and mortgage loans held for sale, good core deposit growth and a higher net interest margin -- 5.67 percent in first quarter 2002, compared with 5.50 percent in fourth quarter 2001 and 5.21 percent in first quarter 2001. According to Atkins, "The margin strengthened in the first quarter due to a continued favorable loan and deposit mix and, to a lesser extent, the steep yield curve." Noninterest Income Noninterest income was $2.30 billion for first quarter 2002, down 5 percent from $2.41 billion in the first quarter of last year. Excluding market-sensitive revenue and acquisitions, first quarter 2002 noninterest income was up 2 percent from the same period a year ago, reflecting increases in fees from most products and services, including deposit service charges and loan fees. The increase in insurance income was due to the acquisition of Acordia in the second quarter of 2001. Excluding market-sensitive revenue, noninterest income decreased by $75 million from the fourth quarter of 2001. Good trends in fee-based consumer deposit products and insurance were offset by lower commercial loan fees, flat trust and investment management fees due to the weak equity market, and first quarter seasonality. While down slightly from fourth quarter 2001, mortgage origination revenue remained high in first quarter 2002 due to continued solid demand for residential mortgages. Noninterest Expense Noninterest expense was $3.33 billion in first quarter 2002, up 17 percent from the same period of last year, and up 10 percent excluding acquisitions. Expenses were basically flat compared to the fourth quarter of 2001 despite $25 million of merger and integration costs and seasonal increases in employee benefit costs for FICA and 401(k) programs. "We are continuing to invest in our team members and in revenue producing activities, while making a concerted effort to reduce expenditures on purchased goods and services," said Atkins. "In line with our effort to boost operating leverage, core expense growth of 10 percent was slightly more than half of core revenue growth of 18 percent since the first quarter of 2001." Credit Quality "The extent and pace of the economic recovery and their effect on credit quality are uncertain, but we're very encouraged by the improved credit quality in the first quarter," said Chief Credit Officer David Munio. "Net charge-offs declined by $49 million, or 9 percent, from fourth quarter levels, while non-performing assets were essentially flat." First quarter 2002 net charge-offs were $487 million, or 1.15 percent of average loans (annualized), down from $536 million, or 1.27 percent, in fourth quarter 2001. "First quarter 2002 credit losses decreased from the prior quarter due to lower losses in our asset based lending businesses as collateral values stabilized after declining throughout 2001 and stable trends in our consumer portfolios," said Munio. "We continued to benefit from a well diversified loan portfolio." The provision for loan losses was $490 million for first quarter 2002, compared with $536 million in fourth quarter 2001 and $361 million in the first quarter of 2001. Non-performing assets of $1.81 billion at March 31, 2002 were unchanged from December 31, 2001, and were 1.02 percent of total loans outstanding. The allowance for loan losses of $3.84 billion was 2.15 percent of total loans at March 31, 2002, compared with 2.18 percent at December 31, 2001 and 2.32 percent at March 31, 2001. Accounting Change -- FAS 142 Transition Adjustment During the first quarter, the Company completed its initial goodwill impairment testing. All reporting units were evaluated using discounted cash flows. The process resulted in a $276 million (after tax) transitional impairment charge reported as a cumulative effect of a change in accounting principle. The $276 million impairment is related to goodwill in certain reporting units in Wholesale Banking and Wells Fargo Financial, primarily Island Finance, a Puerto Rico based consumer finance company acquired in 1995. At December 31, 2001, the Company had $9.53 billion of goodwill, including $5.50 billion from the 1996 purchase of First Interstate Bancorp. Impairment of the remaining First Interstate goodwill is not permitted under FAS 142 since the former First Interstate operations must be combined with other similar banking operations for impairment testing. After the transitional impairment charge, remaining goodwill at March 31, 2002 was $9.7 billion, including goodwill from first quarter 2002 acquisitions. Internet Services "Wells Fargo attracted 5.2 million unique visitors to its web site in February 2002, up from 4.1 million in September 2001," said Clyde Ostler, group EVP of Internet Services. Wells Fargo's online offerings continue to receive recognition from business media and industry watchers, with Institutional Investor naming Wells Fargo the number two e-finance innovator -- above all other banks. Gomez Advisors praised Wells Fargo for offering single sign-on to all products including mortgage and brokerage, the ability to link to bill pay, transfer and trading, and our new bill payment service. "The new Gomez scorecard awarded Wells Fargo Investments the number six ranking in its quarterly review of the nation's leading full-service brokerages, and Speer & Associates selected Wells Fargo as the banking industry's number one small business web site in North America." "Revenues from middle market and large corporate customers through this channel grew nearly 20 percent over the last quarter. Wells Fargo also had 315,000 small business customers banking online, up 120 percent from a year ago. Wells Fargo's e-commerce processing was 8.5 percent of the nation's $10 billion retail e-commerce sales in fourth quarter 2001, up from 6.7 percent in fourth quarter 2000." Business Segment Performance Wells Fargo has three lines of business for management reporting: Community Banking, Wholesale Banking and Wells Fargo Financial. Net income before the effect of accounting change of the three business segments was: ### ############################################################# ________________________________________________________________________ Glory days long gone for venture capital, FleetBoston trims its sails By Beth Healy, Globe Staff It was a pledge made at the top of the market: BancBoston Capital in late 1999 said it intended to invest aggressively in start-ups rather than simply hand money to other venture firms to manage, as it had for decades. At first, the plan yielded huge wins like Allaire Corp. and Silknet Software Inc., two fledging Massachusetts companies whose stock soared during the dot-com frenzy. BancBoston started doing more deals each quarter than any other venture firm in New England. Its total venture portfolio nearly doubled to $4.4 billion in 2000, and the group contributed as never before to the profitability of its parent, FleetBoston Financial Corp. But the glory days are long over. BancBoston has been cutting staff, trimming its portfolio, and has nearly halted its direct dealmaking for the past year. The venture group's assets are now at $3.5 billion, and Fleet said yesterday it aims to slash that by another 29 percent over the next two years, to $2.5 billion. ''We will be getting back to our pre-tech and -telecom boom days in terms of size,'' Fleet spokeswoman Allison Gibbs said. The move, announced yesterday, is part of a back-to-basics restructuring of the entire company, which includes selling investment banking unit Robertson Stephens, the San Francisco-based firm that specializes in high-tech deals. BancBoston Capital has $1.4 billion invested in companies and $2.2 billion with traditional venture firms, which manage the money on the bank's behalf. The company has another $2 billion committed to outside venture funds, according to a regulatory filing, money that it has promised to deliver over the next few years. Fleet is now looking to escape some of those commitments, although it is contractually bound to invest the funds. That news took venture professionals by surprise yesterday. Habib Gorgi, a managing director at Nautic Partners, a Providence venture firm that spun out of Fleet in 2000, said, ''No one has talked to us about any cutback in commitments.'' Fleet invested $300 million with Nautic when it split from the bank. Although Fleet is unlikely to withdraw support from sought-after funds such as those run by Nautic or Thomas H. Lee Co., it will try to exit commitments with industry sector funds and less established funds, bank executives said. But Fleet will continue to offer venture-capital opportunities to its clients. Last month, the bank raised $242 million from wealthy individuals and institutions to invest in outside venture funds. In total, Fleet oversees $700 million of such client assets. On the direct investment side, BancBoston Capital aims to sell some of its portfolio companies, said Gibbs, who declines to name the firms. She said the company will continue to do direct deals ''selectively.'' Fleet wrote off as a loss $1.1 billion in venture investments in 2001, 47 percent of that related to start-up deals. Another 10 percent of the losses were on stock investments. The rest was related to write-offs in other firms' funds. The lion's share of the write-offs were in technology and telecommunications, sectors that made up 25 percent of the total portfolio. The ugly numbers came after a year in which BancBoston Capital delivered $373 million in net income to Fleet, or one-fifth of the banking company's total earnings. The 2000 venture results marked a 73 percent jump from 1999. BancBoston employees clearly saw the writing on the wall. Peter Roberts, who had led several successful deals, left last year. Several other executives were asked to leave. And just last month, health care investor Jean George and tech investor Bob Hower left the group to join Advanced Technology Ventures of Waltham. Fleet is hardly alone in pulling back from the venture business. Many pension funds, endowments, and insurance companies also are evaluating their venture exposure following the worst year in venture history. After huge returns in 1999 and 2000, last year was dismal, with double-digit losses for many investors. If the cutback was predictable, it's also a reversal of the message Fleet was touting a year ago. Back then, even amid sharp venture losses, Fleet executives were telling investors they planned to stick with the business. They called it part of the company's strategy for a ''diversified earnings stream.'' Although Fleet is not leaving the venture business, it has clearly lost its stomach for the roller-coaster effect of venture and investment banking on its earnings. Traditional venture capitalists aren't surprised. ''Doing venture as a subsidiary of a corporation rarely works well,'' said Paul Maeder, managing general partner at Highland Capital Partners in Lexington. ''If you're under quarterly earnings pressure, sooner or later, it's going to come back and bite you.'' Beth Healy can be reached at bhealy@globe.com. Apple beats Wall Street expectations By May Wong, Associated Press SAN JOSE, Calif. (AP) Thanks to brisk demand for its new iMac, Apple Computer Inc. posted a second-quarter profit that beat Wall Street estimates. For the three months ended March 30, the Cupertino-based PC maker earned $40 million, or 11 cents a share, on revenue of $1.5 billion, the company said Wednesday. In the year-ago period, Apple earned $43 million, or 12 cents a share, on revenue of $1.43 billion. Wall Street analysts surveyed by Thomson Financial/First Call had projected earnings of 10 cents a share on revenue of $1.46 billion. The company said it shipped 220,000 units of the new flat-screen iMac during the second quarter. And though the company raised the price of the computer by $100 in late March to offset the increased cost of memory and other components, demand has not waned, chief financial officer Fred Anderson said in an interview. ''We're pleased to have delivered solid results while executing a challenging product transition,'' Anderson said. Continued robust sales will help Apple show a strong performance for the current quarter, he said. The company is targeting revenues to rise sequentially to $1.6 billion in the June quarter with earnings per share to be flat or up slightly. The higher costs of components and airfreighting to speed up the new iMac shipments will continue to cut into gross profit margins in the June quarter, as the company continues to fulfill a backlog while honoring the original prices of those orders. But production is expected to catch up to demand in the current quarter and gross margins should return to normal levels in the September quarter, Anderson told analysts during a conference call. The company also said it plans to open 20 additional stores by the end of the calendar year. The 27 stores that Apple opened in 2001 generated $70 million in sales in the second quarter, up from $48 million in the December quarter, Anderson said. At the same time, operating losses from the stores were cut in half from $8 million to $4 million, he said. The company hopes the stores will become profitable by the end of the year, Anderson said. The retail stores are key to Apple's effort to pull ahead of its long-standing 5-percent market share to the Microsoft-Windows platform juggernaut in the personal computer market. ''They had to try other methods to capture new users. Putting stores in upscale malls and high-traffic areas with fancy window displays ... is a new strategy that appears to be working quite well,'' said Andrew Scott, analyst with Needham & Company Inc. Analysts say Apple is doing a good job in the tough economy. ''There's almost no other computer company that was up sequentially in the March quarter, and Apple was up 9 percent,'' said Dan Niles, a Lehman Bros. analyst. ''And they're one of the few companies where demand isn't the problem.'' For the six months ending in March, Apple said it earned $78 million on sales of $2.87 billion. That's up dramatically from the $152 million loss on sales of $2.44 billion of the year-ago period, when the company was struggling to recover from sluggish sales, increased competition and a glut of inventory. Shares of Apple finished the regular session up 37 cents to $26.11 on the Nasdaq Stock Market on Wednesday, but fell 23 cents in after-hours trading. On the Net: http://www.apple.com Nigerian E-mail Scam Still Dupes People By Ryan Naraine Sixteen Americans fell victim to the elaborate Nigerian e-mail scam that promises a cut of millions of dollars in over-invoiced contract funds in exchange for bank account numbers and other personal information. According to the 2001 Internet Fraud Report, about 2,600 people in the U.S reported to being duped by the Nigerian spam scam with 16 reporting actual losses totaling about $345,000 last year. In two unidentified cases, individuals reported being bilked of $78,000 and $74,000. The report, prepared by the Federal Bureau of Investigation (FBI) and the National White Collar Crime Center (NW3C), said the Nigerian e-mail fraud represented more than 15 percent of all complaints reported. Complaints are being referred to the U.S Secret Service, the report said. John Kane, research manager at the National White Collar Crime Center, told InternetNews.com the Nigerian e-mail scam was the "most costly, in terms of losses per incident" in 2001. Last year, the center processed 16,775 complaints of Internet-related scams. Of that number, Kane said 2,600 people in the U.S complained about receiving the Nigerian letter. "The majority of the people targeted don't participated in the scam but, unfortunately, the promises of quick riches tend to lure some people," Kane said. The NW3C said all complaints regarding this scam is being forwarded to the U.S Secret Service. "We're somewhat surprised to find individuals falling victims to this scam. It has been around in letter form since the 1980 but, unfortunately, not a lot of people have heard about it. Because of the large amounts of money being promised and the fact that for some people, the scenario can be realistic, it (the scam) continues," Kane added. The Nigerian Letter Scam, which hits millions of e-mail inboxes, is a correspondence outlining an opportunity to receive non-existent government funds from alleged dignitaries. It is designed to collect advance fees from the victims. The senders of the e-mails ask for up-front payoff money to bribe government officials in Nigeria and, in some cases, other African countries like Congo. "This scam has run since the early 1980's and is also referred to as '419 Fraud' after the relevant section of the Criminal Code of Nigeria, as well as 'Advance Fee Fraud.' Because of the scam, the country of Nigeria ranks 2nd for total complaints reported at the IFCC on businesses by country," the report said. The scam works as follows: A letter, e-mail, or fax is sent from an alleged official representing a foreign government or agency. The letter presents a business proposal to transfer millions of dollars in over- invoiced contract funds into your personal bank account. You are offered a certain percentage of the funds for your help. The letter presents a business proposal to transfer millions of dollars in over- invoiced contract funds into your personal bank account. You are offered a certain percentage of the funds for your help. The letter encourages you to travel overseas to complete the details. The letter also asks you to provide blank company letterhead forms, banking account information, and telephone numbers. Next, you receive various documents with official looking stamps, seals and logos testifying to the authenticity of the proposal. Finally, they ask for up-front or advance fees for various taxes, processing fees, license fees, registration fees, attorney fees, etc. According to Kane, most of the victims reported that monies were electronically withdrawn from the bank accounts provided. "In the case of the individuals who lost $78,000 and $74,000, money was withdrawn. Some people lost several hundred dollars by submitting upfront processing fees," he said. He said it was highly likely that more than 16 individuals got duped because of the fact that the crime might be underreported. "People tend to feel guilty and ashamed of falling victim to such crimes. With the Nigerian letter crimes, there is an element of the fast cash, get- rich-quick mentality on the part of consumers and it's not a stretch to believe that people lost money but never reported the crime." The report from the Center said that only about 10 percent of victims of any type of Internet crime actually report the case. It said approximately 10,000 Americans last year reported losing $17.8 million in online scams Leasing News has over 100 of these letters. Here are some new ones sent to us by our readers: EDERAL MINISTRY OF WORKS/HOUSING FEDERAL OFFICE COMPLEX GARKI-ABUJA. Dear Sir, REQUEST FOR URGENT BUSINESS RELATIONSHIP. I solicit your utmost confidence in this transaction. It is confidential and Top secret, I represent officials of the Nigerian federal government contract review panel (FGCRP) who are interested in investments, to buy and manage fish trawlers or go into crude oil exploration /marketing with funds, which are presently trapped in Nigeria. In order to commence this business we solicit your assistance to enable us transfer into your account the said-trapped funds. The source of this funds is as follows, During the past military regimes in Nigeria government official set up companies and awarded them selves contracts which were grossly over invoiced, The present government set up a contract Review Panel of which we are members. We have identified a lot of inflated contract funds, which presently is floating in the apex bank of Nigeria ready for payment. Unfortunately as civil servants and members of this panel, We cannot acquire this money on our names. I have been mandated by my colleague of the panel to look for a foreign partner into whose account we would transfer the sum of the USD30m (Thirty million united states Dollars) Hence I write requesting your unreserved assistance. We plan to share the money with 30% going to the account owner 65% for my partners and my self and the remaining 5% will be used in settling all expenses that we might incur during the course of this transfer.
If you accept this proposal be kind enough to send to me Your company name, address telephone and fax numbers. Your bank name address as well as your bank account number.
With this Information we are going to put in application for the release of these funds into your account for us all. So far, much has been said, and due to our sensitive position we can not afford a slip in this transaction, so email me for further information on the requirements and procedures for this transaction. Please treat with the strictest confidentiality and utmost urgency. Best regards Mr. Ben. ugonabor _________________________________ FROM:M.NKONO NETHERLANDS+0031-613-476-359 CONFIDENTIAL BUSINESS PROPOSAL You may be surprised to receive this letter from me, since you do not know me personally.” My Name is Mark Nkono "The purpose of my introduction is that" Before the death of my father, he had taken me to Johannesburg to deposit the sum of US8.5 million (Eight million, Five Hundred thousand United States dollars),in one of the private security company, as he foresaw the looming danger in Zimbabwe this money was deposited in a box as gem stones to avoid much demurrage from security company. This amount was meant for the purchase of new machines and chemicals for the Farms and establishment of new farms in Swaziland. This land problem came when Zimbabwean President Mr. Robert Mugabe introduced a new Land Act Reform wholly affecting the rich white farmers and some few black farmers, and this resulted to the killing and mob action by Zimbabwean war veterans and some lunatics in the society. In fact a lot of people were killed because of this Land reform Act for which my father "Nkono Ndlovu" was one of the victims. It is against this background that, I and my family fled Zimbabwe for fear of our lives and I currently staying in the Netherlands where my family are seeking political asylum and more so I have decided to transfer my father’s money to a more reliable foreign account. As the eldest son of my father, I am saddled with the responsibility of seeking a genuine foreign account where this money could be transferred without the knowledge of my government who are bent on taking everything we have got. The South African government seems to be playing along with them. I am faced with the dilemma of moving this amount of money out of South Africa for fear of going through the same experience in future, both countries have similar political history. As a businessman, I am seeking for a partner who I have to entrust my future and that of my family in his hands, I must let you know that this transaction is risk free. If you accept to assist me and my family, all I want you to do for me, is to make an arrangements with the security company to clear the consignment(funds) from their affiliate office here in the Netherlands as I have already given directives for the consignment to be brought to the Netherlands from South Africa. But before then all modalities will have to be put in place like change of ownership to the consignment and more importantly this money I intend to use for investment. I have two options for you. Firstly you can choose to have certain percentage of the money for nominating your account for this transaction. Or you can go into partnership with me for the proper profitable investment of the money in your country. Whichever the option you want, feel free to notify me. If you do not prefer a partnership I am willing to give you 20% of the money while the remaining 80% will be for my investment in your country. Contact me with the above telephone number and E-mail:mark17_nkono@yahoo.co.uk while I implore you to maintain the absolute secrecy required in this transaction. Thanks, GOD BLESS YOU Yours Faithfully, Mark Nkono. FROM: DR. MUSA BELLO LAGOS NIGERIA. TEL/FAX: 234-1-7596202 PRIVATE EMAIL: musaub@mail.com Attn: Sir, First, I must solicit your confidence in this transaction, this is by virtue if its nature as being utterly CONFIDENTIAL and TOP SECRET. Though I know that a transaction of this magnitude will make any one apprehensive and worried, but I am assuring you that all will be well at the end of the day.
We have decided to contact you due to the urgency of this transaction, as we have been reliably informed of your discreteness and ability in transactions of this nature. Let me start by first introducing myself properly to you. I am Dr. Musa Bello, a Branch Manager with the Union Bank of Nigeria Plc. Lagos. I came to know of you in my private search for a reliable and reputable person to handle this confidential transaction which involves the transfer of a huge sum of money to a foreign account requiring maximum confidence. THE PROPOSITION:\ A foreigner, Late Engineer Johnson Creek, an Oil Merchant/Contractor with the Federal Government of Nigeria, until his death five years ago in a ghastly air crash, banked with us here at Union Bank Plc. Lagos, and had a closing balance of US$12.5M (Twelve Million, Five Hundred Thousand United States Dollars) which the bank now unquestionably expects it to be claimed by any available foreign next-of-kin of the Late beneficiary or alternatively be donated to a discredited trust fund for arms and ammunition at a military war college here in Nigeria. Fervent valuable efforts are being made by the Union Bank to get in touch with any of the Creek family or relatives but proved to avail. It is because of the perceived possibility of not being able to locate any of Late Engr. Johnson Creek's next-of-kin (he had no known wife and children) that the management under the influence of our chairman and member of the board of directors, retired Major General Kalu Uke Kalu, that an arrangement be made for the funds to be declared "UNCLAIMABLE" and subsequently be donated to the Trust Fund for Arms and Ammunition to further enhance the course of war in Africa and the world in general. In order to avert this negative development, so of my trusted colleagues and I now seek your permission to have you stand as a next-of-kin to Late Engr. Johnson Creek so that the funds US$12.5M would be released and paid into your bank account as the beneficiary next-of-kin. All documents and proves to enable you get this fund will be carefully worked out and more so we are assuring you of a 100% risk free involvement. Your share stays while the rest would be for myself and my colleagues for investment purposes in your country. We have agreed that, the funds will be shared thus, after it has been transferred into your account 1. 30% of the money will go to you for acting as the beneficiary of the funds. 2. 10% will be set aside for reimbursement to both parties for any incidental expenses that may be incurred in the course of the transfer. 3. 60% to us the originators of the transaction. If this proposal is OK by you and you do not wish to take undue advantage of the trust, we hope to bestow on you and your company, then kindly get to me immediately via my private E-mail or fax address above for security reason. Furnishing me with your most confidential telephone, fax number and exclusive bank particulars so that I can use these information to apply for the release and subsequent transfer of the funds in your favor. Thank you in advance for your anticipated co-operation. Yours faithfully, Dr. Musa Bello Manager, (UNION BANK OF NIG. PLC.) NIGERIAN NATIONAL PETROLEUM CORPORATION 7 KOFO ABAYOMI STREET, VICTORIA ISLAND, P.M.B. 12701, LAGOS. FAX: 234-1-7590741 OR TEL: 234-1-7748173 ATTENTION: THE PRESIDENT/CEO FROM: Dr.Duncan Akhere BUSINESS PROPOSAL I am making this contact with you on behalf of my colleagues after an acceptable recommendation from an International Business Agency. My colleagues and I are members of the Contract Award Committee (CAC) of the Nigeria National Petroleum Corporation (NNPC). My colleagues have mandated me to look for a trustworthy company into whose account some funds is to be transferred. We have in our possession instrument of payment for ($12.5MUS)(TWELVE MILLION, FIVE HUNDRED THOUSAND US DOLLARS only) now in a dedicated account with the Central Bank of Nigeria (CBN), Debt Reconciliation Committee (DRC). The above funds arose from the over invoicing of some Supplies and Engineering Works contracts which have been executed and the contractors paid in full. The fund is therefore free to be transferred overseas without any risk whatsoever. Due to the nature of accrual of this funds, it has to be applied for by a foreign contractor/company and payment can only be made into a foreign account hence this contact is necessary to accomplish this deal. You (or your company) shall be compensated with 25% of the amount as the account owner, 5% shall be used for the reimbursement of all expenses that will be incurred by both parties during the course of this financial transaction. The remaining 70% is for us. We shall require of you the following urgently by fax: 1. Name, Telephone and/or fax Numbers of Beneficiary 2. Name and full address of the Company 3. Complete particulars of the bank account where you wish the funds to be transferred. This should include the account Number, Bank Address, the Telephone, Fax and Telex numbers of the bank. My colleagues and I have had some fruitful discussions with relevant top officials of both the Federal Ministry of Finance (FMF) and the Central Bank of Nigeria (CBN) and they have agreed to cooperate in the transfer. An application for funds transfer shall be made at the appropriate Ministries in favor of the beneficiary (you or your company).Thereafter, your company shall be officially regarded as having executed the contract for the Nigerian National Petroleum Corporation (NNPC) for which payment is being made. This process make the operation legal according to the laws of the Federal Republic of Nigeria. Please treat this transaction as STRICTLY CONFIDENTIAL as we are Civil Servants who would not want any exposure. Do not go through the International Telephone Operator or (AT&T) when lines are busy at any time in the course of this operation. Always dial direct. It’s very difficult to get telephone access to Nigeria. So you must persist even when the telephone says subscriber not available or the number does not exist. These answers are always given when there is no access. Thanks for your anticipated cooperation. Best Regards, DR. DUNCAN AKHERE DEAR SIR, I AM AN ATTORNEY AND I HAVE A CLIENT WHO IS INTERESTED IN INVESTING SOME GOOD MONEY IN YOUR COMPANY. MY CLIENT IS A VERY IMPORTANT AND PROMINENT PERSON WHO HAS MANDATED ME TO CONTACT YOU OR YOUR COMPANY FOR A VERY IMPORTANT BUSINESS TRANSACTION. MY CLIENT IS BY NAME MRS. MARYAM ABACHA AND SHE IS THE WIFE OF A LATE MILITARY HEAD OF STATE IN MY COUNTRY. HER HUSBAND LATE GENERAL SANNI ABACHA MADE A LOT OF MONEY THROUGH OIL PROCEEDS DURING HIS TENURE IN OFFICE. INFACT, IT WAS DISCOVERED AFTER HIS DEATH THAT HE WAS WORTH WELL OVER $4.5 BILLION UNITED STATES DOLLARS AND SOME OF THIS MONEY WAS RETRIEVED AFTER HE DIED WHILE SOME WAS RECOVERED FROM OFFICIALS THAT SERVED UNDER HIM DURING HIS REIGN AS PRESIDENT OF NIGERIA. THE TRUTH OF THIS CASE IS THAT MY CLIENT DESPITE THE PROBLEM SHE IS GOING THROUGH NOW, SHE STILL HAS A LOT OF MONEY IN HER POSSESSION. WHICH SHE INTENDS TO INVEST OUTSIDE OUR COUNTRY. WHAT MY CLIENT NEEDS FROM YOU NOW IS A RELIABLE ACCOUNT WHERE SHE CAN TRANSFER SOME MONEY BUT MIND YOU, ALL THE MONEY IN HER POSSESSION CAN NOT LEAVE AT ONCE BECAUSE SHE NEEDS TO BUILD CONFIDENCE AND TRUST IN SOMEONE WHO WOULD NOT EXPOSE HER PLAN TO REMIT AND POSSIBLY INVEST IN YOUR COMPANY. SO SHE HAS AGREED THAT I SHOULD MAKE ARRANGEMENT FOR THE TRANSFER OF $45.5 MILLION UNITED STATES DOLLARS AND YOU ARE FREE TO NEGOTIATE YOUR MODE OF COMPENSATION EVEN IF SHE INTENDS TO INVEST THE MONEY IN YOUR COUNTRY. PLEASE, DO NOT HESITATE TO INDICATE YOUR VIEW OF THIS REQUEST BY CONTACTING ME IMMEDIATELY YOU RECEIVE THIS MAIL, SO THAT THE NECESSARY ARRANGEMENTS CAN BE MADE FOR THE MONEY TO LEAVE IMMEDIATELY. DUE TO THE PRESENT SITUATION OF MY CLIENT, I WOULD BE HAPPY IF THIS REQUEST CAN BE KEPT A SECRET. I WOULD ALSO LIKE TO NOTE THAT THERE IS NO RISK INVOLVED. I HOPE MY CLIENT WOULD BE HAPPY INVESTING WITH YOU. PLEASE KINDLY SEND DOWN YOUR REPLY THROUGH MY PERSONAL E-MAIL ADDRESS DO NOT FORGET TO SEND YOUR TELEPHONE AND FAX NUMBERS WHEN REPLYING. THANKS, BARRISTER. HASSAN KHADIR www.leasingnews.org
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