Banks

Deutsche Bank surprise points to fragile stability

16 Jul 2018

The German lender earned 400 million euros in the second quarter, higher than analysts expected. The fact that boss Christian Sewing made deeper cost cuts without revenue collapsing suggests a nadir has been reached. But a slump in trading means there is plenty more pain to come.

Wells Fargo slump not as bad as it looks

13 Jul 2018

The embattled $264 bln lender missed estimates as loans, deposits, revenue and earnings all fell. Its boss Tim Sloan can take comfort that much of it stems from one-off hits and January’s Fed censure tied to his predecessor’s failures. But he’s yet to show he can reverse the slowdown.

Wall Street banks trade under a shadow

13 Jul 2018

JPMorgan, Citi, Wells Fargo and Bank of America should be worth over $100 bln more than they are, if analysts were right about the effect on earnings of U.S. tax changes. Instead, concerns over rates, credit quality and a lack of regulatory largesse are muting those benefits.

French finance has new fizz inside its own bubble

13 Jul 2018

Parisian bankers have a spring in their step. Jobs are coming to the capital due to Brexit, difficult reforms are underway, and President Emmanuel Macron has a vision of which they are proud. But their country has cleavages that are reminiscent of Britain and the United States.

ECB asset check puts investment banks on the spot

12 Jul 2018

The European Central Bank is probing how lenders including Deutsche Bank, BNP Paribas and Société Générale value illiquid holdings. Like bad debts, regulators want to improve comparability. For the three banks, the result could be higher capital charges on 44 bln euros of assets.

IndyMac bank collapse still resonates in Trump era

11 Jul 2018

Treasury Secretary Steven Mnuchin made a boatload from buying the defunct $32 bln mortgage lender, which failed a decade ago this week. With the White House backing deregulation for smaller banks, IndyMac’s downfall and the ensuing mess offer a stark warning against overdoing it.

UK counts cost of finance jobs which never come

9 Jul 2018

BlackRock’s choice of Paris over London as the base for its new alternative asset management business underscores the shift in investment away from the British capital. Though the focus has been on bankers relocating, the bigger cost is those new jobs which pass the City by.

Review: A fleeting snapshot of India’s Bollygarchs

6 Jul 2018

“The Billionaire Raj” offers a colourful account of many types of cronyism afflicting the country, and whether India will descend into Russian oligarchy or give way to a U.S.-style progressive era. The pace of change, though, means some conclusions have already been overtaken.

Viewsroom: Is Silicon Valley getting nervous yet?

4 Jul 2018

The tech hub is getting squeezed by new policy restrictions amid a looming trade war between the U.S. and China. How is the Valley holding up? Plus: India's state lenders are losing CEOs. Is running these banks into the ground part of the plan?

Danske cash gusher faces regulatory blockage

4 Jul 2018

The Danish lender may have helped launder 53 billion Danish crowns ($8 bln) in its Estonian business. The group’s healthy balance sheet helps, but a fine of 8 billion crowns or more could take the bank’s leverage ratio down to 4 percent, and risk generous shareholder distributions.

EU finally does right thing on taxing bank capital

4 Jul 2018

Under pressure from the European Commission, the Dutch government removed a benefit for banks that issue hybrid bonds. Other countries will follow. Tax breaks helped lenders rebuild capital after the crisis. The sector’s relative health means it no longer needs special treatment.

Take Lloyds’ PPI nonchalance with a pinch of salt

3 Jul 2018

A legal ruling implies UK banks may have to repay commission on missold loan insurance. Despite paying 18 bln pounds on wider PPI claims, Lloyds is only modestly adjusting its provisions. That would be encouraging if it didn’t have a track record of goofing its estimates.

Deutsche reboot looks incompatible with China tech

3 Jul 2018

New boss Christian Sewing is scaling back in capital-intensive businesses like bond trading and serving hedge funds. That creates a challenge: how to hold onto rainmakers in less problematic areas, like a revamped Asia tech team which is winning deals with Ant and Tencent.

Chinese mega-fund is the last thing tech needs

3 Jul 2018

A state-owned enterprise is working with one of SoftBank’s partners on a $15 bln answer to the Vision Fund. Deploying huge sums wisely is hard, even if you have SoftBank’s track record. This could further inflate valuations, and stoke fresh subsidy battles among startups.

Bank CoCos get a new reason to go pop

2 Jul 2018

Exchange-traded funds are pooling bonds that convert into equity in a crisis. It’s an odd mix: ETFs allow investors to buy or sell assets easily, while contingent convertibles can be hard to trade. The union may mean more investors for funky debt, but also bigger price moves.

Guest view: Finance can do better on development

29 Jun 2018

Big banks should be helping emerging countries meet the Sustainable Development Goals, a challenge that could open new markets worth $12 trln. Yet well-intentioned rules meant to keep the financial sector safe can get in the way, argues Christopher Lee of the Milken Institute.

Fed lets Goldman, Morgan Stanley off lightly

29 Jun 2018

Neither firm can boost buybacks or dividends after their leverage ratio fell below the stress-test minimum. A one-time hit from last year’s tax changes caused it. But Amex, JPMorgan and others handled that smoothly. The two Wall Street banks are lucky the Fed didn’t flunk them.

Caixabank wisely exits Spain property party early

29 Jun 2018

The lender has sold real estate assets worth 12.8 bln euros to Lone Star, at a better valuation than deals by Santander and BBVA. With prices recovering, Caixa could have got an even better outcome by waiting. Given the mess the sector has made, moving now makes more sense.

Failed exam suggests deeper U.S. cuts at Deutsche

28 Jun 2018

The German lender was the only bank to flunk the Fed’s annual stress test, adding to its U.S. regulatory woes. Given compliance costs, the result could force new boss Christian Sewing to shrink the bank’s American presence even further. Wall Street titans will strut higher still.

Wall St feels little of Trump’s deregulatory love

28 Jun 2018

Lobbyists for the likes of Goldman Sachs and JPMorgan want watchdogs to reduce a capital surcharge, arguing it’s superfluous. The Fed wants to give it more weight. It’s another example of how smaller banks benefit most from the president’s pledges to roll back post-crisis rules.