Banks

UK mistakes City liberalisation for a growth plan

15 Nov 2024

Finance minister Rachel Reeves wants to unleash the 153-bln-pound financial sector to boost the economy. It’s not clear that her reforms so far, like a share-trading venue for private companies, will do that. Meatier deregulation, meanwhile, would raise the risk of future crises.

China developers’ survival fight gets litmus test

15 Nov 2024

Sunac has given investors four options for restructuring $2 bln of onshore bonds, including an 82% haircut and a debt-for-equity swap. How they vote will reveal their views on both the $3.1 bln firm’s chances of survival and Beijing’s attempts to end the property slump.

Shein margin wobble takes bite out of IPO value

14 Nov 2024

The e-commerce giant’s revenue growth slumped in the first half of 2024, and the net margin fell to 2% per The Information. Even if the business recovers, it creates uncertainty that’s compounded by a protectionist US government. Investors may struggle to see the upside.

Singapore’s banking giant DBS is coming of age

12 Nov 2024

The $90 bln Singapore lender will start returning capital to shareholders through share buybacks. Incoming CEO Tan Su Shan will retain sufficient firepower to pursue bold M&A, though changing US policy in its Asian backyard may merit a cautious turn.

HSBC can stand strong in a fragmenting world

7 Nov 2024

The $170 bln bank is uniquely dependent on East-West linkages at a time when global tensions are rising. Yet it weathered the last US-China tit-for-tat fairly well. And supply-chain shifts could even boost the lender, if CEO Georges Elhedery can help it adapt to new trade flows.

Macquarie’s lumpy earnings are a luxury problem

1 Nov 2024

The $55 bln investment bank's stock fell 4% as results were hit in part by fewer private equity-like asset sales. But it's still sporting a high valuation despite low returns. CEO Shemara Wikramanayake's impressive track record means the lender can withstand a few blows.

French banks’ ups and downs obscure value problem

31 Oct 2024

Société Générale shares rose 7% after its results showed faster growth, while BNP Paribas fell 6% after sluggish earnings. The bigger issue is that both lenders now trade at a discount to euro zone peers. A tough Gallic market and volatile trading units make that hard to change.

Global banks are nearing peak regulation

31 Oct 2024

Sixteen years after the financial crisis that triggered bailouts and new rules, CEOs like JPMorgan’s Jamie Dimon are pushing back. Sympathetic politicians and competition from shadow banks help their case. The best hope for watchdogs is to stop the system from fragmenting.

Robust banks impair pleas for lighter regulation

31 Oct 2024

Lenders on both sides of the Atlantic are doing relatively well, despite concerns over the effect of shifting rates. In this Viewsroom podcast, Breakingviews columnists debate what is driving growth, and why CEOs are simultaneously bemoaning increased scrutiny from watchdogs.

UBS can share more M&A savings with investors

30 Oct 2024

CEO Sergio Ermotti keeps upping the pace of cost cuts from buying Credit Suisse, with his 2024 target now $7.5 bln. Yet expenses elsewhere in the bank seem to be offsetting those gains. To please shareholders, UBS may have to let more of the bounty drop down to the bottom line.

India’s microfinance trouble goes mainstream

28 Oct 2024

IndusInd Bank shares dropped 19%, wiping out $2 bln or over half the value of its loans to the poor. Investors are pricing in an asset quality meltdown far worse than the lender’s rising delinquencies imply, and a possible throwback to the 2010 crisis that blew up the industry.

Barclays’ investment bank slog gets welcome push

24 Oct 2024

The $46 bln UK lender’s dealmaking unit beat expectations in the third quarter, helped by booming debt underwriting. A depressed share price shows CEO C.S. Venkatakrishnan’s turnaround has a long way to go. But cutting costs is easier when the business is growing.

Fintechs’ IPO valuations can look beyond Nubank

24 Oct 2024

The $70 bln Brazilian lender is seen as a benchmark for unlisted rivals. But Nubank’s focus on interest income, and the idiosyncrasies of its home market, make it look rather different to the likes of Revolut. Bankers prepping neobank IPOs may gain from looking at other peers.

Deutsche hits bad-debt snag on road to growth

23 Oct 2024

The German lender returned to profit in the third quarter but also said its full-year loan-loss provision would jump to 1.8 bln euros. It’s the second quarter in which CEO Christian Sewing has surprised investors on bad debt. The shock distracts from investment-banking growth.

New CEO clicks HSBC Rubik’s cube into right place

22 Oct 2024

The $160 bln lender’s new boss is tackling the bank’s unwieldy structure. Separating the top performing UK and Hong Kong units from everything else globally looks smart. But it may one day invite questions about why these retail units are inside HSBC in the first place.

India’s lenders face the end of lazy banking

22 Oct 2024

Gold, real estate and a booming stock market are sapping deposit growth. That's hurting earnings at banks like SBI and HDFC that rely heavily on interest income. But it can also be a spur for the industry to follow Western peers and bulk up in businesses that charge fees.

Swiss finish would take shine off UBS’s M&A gift

21 Oct 2024

The bank’s $3.8 bln takeover of Credit Suisse was described as the 'deal of the century'. But $19 bln of extra capital charges so far, and another looming hit from local regulators, will lower the returns. The next time a bank rescues a rival, it may push for even sweeter terms.

Wall Street nemeses revitalize clash of titans

16 Oct 2024

A 56% surge in deal fees helped propel Morgan Stanley shares to a record high and intensify an investment banking arch-rivalry. Goldman, in turn, is battling back in wealth management. Closing the valuation gap depends on its strategy faring better than chasing everyday savers.

Banks look for new normal, find they don’t need it

15 Oct 2024

High rates and busy markets turbocharged revenue at $325 bln Bank of America, Goldman Sachs, Citi and others. The question is how long it can last. Strong third-quarter results raise the tantalizing prospect that solid results are here to stay, especially if M&A and IPOs pick up.

Jamie Dimon verges on overprotecting his fortress

11 Oct 2024

JPMorgan’s boss is hoarding the mega-bank’s capital, warning of 'treacherous' geopolitical risks. A 19% return on tangible equity and premium valuation attest to the laudable prudence. Before long, however, the stockpile may become excessive, and give rise to a special dividend.