Banks

Resolving Credit Suisse: an alternative history

27 Apr 2023

Swiss authorities merged the bank with UBS, rather than risk a financial panic by bailing in bondholders. Yet Credit Suisse was arguably unique and small enough to be wound down. Breakingviews imagines that scenario, which may serve as a template if the enlarged group ever fails.

Capital Calls: US GDP, Eli Lilly, EU budget

27 Apr 2023

Concise views on global finance: Consumer spending provided fragile support for the US economy in the first quarter. Meanwhile pharma group Eli Lilly is racing against rising obesity expectations, and the European Commission faces German hurdles to replacing its budget rules.

Capital Calls: Plan C for Teck Resources

26 Apr 2023

Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.

StanChart shareholders look too blinded by history

26 Apr 2023

The $22 bln bank’s near-12% equity return last quarter breezed through boss Bill Winters’ 2024 target. His mostly unimpressive track record is a concern, as is slowing economic growth. But investors value the lender at just half its book value. That’s overly pessimistic.

New UBS investor pitch fits better than old one

25 Apr 2023

Rescuing Credit Suisse is a risky move. But first-quarter results show that the buyer’s existing business is struggling to grow. The merger offers large savings and creates a wealth giant with $3.5 trln of assets. The return of proven cost-cutter Sergio Ermotti as CEO helps.

Asia’s richest banker will loom over his successor

25 Apr 2023

Uday Kotak plans to stay on the board of the $46 bln bank bearing his name after he steps down as chief this year. Shareholders are supportive but it could end up being messy and it is at odds with the Indian regulator’s own aim to shore up governance by making CEO terms shorter.

China distrusts its retail recovery

25 Apr 2023

Officials are pushing banks to cut deposit rates after citizens stuffed $1.4 trln into accounts last quarter. Cash hoarding could sabotage a nascent shopping revival, but punishing savers with low returns is a clumsy way to boost consumption. It could backfire too.

US ‘systemically important’ tag lacks fine print

24 Apr 2023

Financial regulators are once again making it easier to pick non-bank institutions, from hedge funds to private equity giants, for stricter supervision. Identifying firms that might threaten the system is the easy part. Writing effective rules for such diverse targets is harder.

Credit Suisse mess leaves scattered Swiss debris

24 Apr 2023

A $3 bln state-sponsored UBS takeover prevented the failure of Bern’s other big bank. Yet small, export-oriented Swiss firms now only have one large lender for their needs, and additional bank regulation is likely. Meanwhile, historic US tax issues may come home to roost.

UBS investors’ M&A fears are easing

24 Apr 2023

One question hanging over Chair Colm Kelleher’s Credit Suisse deal was whether there’d be many assets left by the time it closed. But the target’s outflows were smaller than they could have been, and the valuable local unit held up well. That buttresses shareholders’ confidence.

Guest view: Why bank investors have it the hardest

21 Apr 2023

Lenders were supposed to be boring after 2008. Recent collapses exposed that vision as a fantasy. Shareholders grapple with high leverage, opacity, erratic regulators and intangibles like trust. Seemingly low valuations may not be low enough, argues former analyst Rupak Ghose.

Japanese online lender is curious beast

21 Apr 2023

Rakuten Bank shares jumped 33% in Tokyo’s largest IPO since 2018. Loans only account for a third of its balance sheet, the government is its biggest borrower and it buys lots of assets from its parent. The pop reflects a thin supply of tech-savvy finance listings.

Wall Street aces its real-life stress test

20 Apr 2023

Disaster simulations the Fed imposed on JPMorgan, Morgan Stanley and others hadn’t gamed out a sharp rise in interest rates. Nonetheless, the mega-banks have emerged intact, and in many cases better off, from a near-existential shock. It bodes well for the crises yet to come.

Chinese financiers’ pay cut could cut too deep

20 Apr 2023

Salaries are being slashed and executives arrested as campaigns attacking bad debt and excessive wealth converge. Few sympathise with flashy capitalists, but the private sector could take collateral damage if President Xi Jinping’s rectification push goes too far.

Bank chiefs move fluttering interest-rate needle

19 Apr 2023

Morgan Stanley’s James Gorman and JPMorgan’s Jamie Dimon both warned that sticky inflation may prompt the Fed to hike rates to 6%. While not a prediction, the figure exceeds what investors and the central bank itself expect. When CEOs sitting ringside weigh in, it pays to listen.

Capital Calls: Allianz’s fintech sale

19 Apr 2023

Concise views on global finance: The $100 bln insurer may offload its 5% stake in German digital banking startup N26, a decision that would make all kinds of sense.

EU bank crisis plan makes best of bad landscape

18 Apr 2023

The European Union’s proposal to extend its bank-failure system to smaller lenders is an attempt to work around political constraints. Broader use of deposit guarantee schemes should limit bailouts and help troubled banks find buyers. But even sensible tweaks may not be possible.

Goldman has its fingers in the wrong pies

18 Apr 2023

The Wall Street giant missed out on the interest-income avalanche that boosted peers, and its trading revenue sagged after last year’s bonanza. Meanwhile, CEO David Solomon’s consumer push is still losing money. Where rising rates are a gift to rivals, Goldman needs the opposite.

Singapore’s safe-haven success stirs its own drama

18 Apr 2023

It is booming as a wealth management centre and has a runway for growth: the hub books a fraction of the funds that Switzerland does. But winning the confidence of ultra-rich Asians comes with a unique set of problems. The Lion City can manage some of those better than others.

Rivals can feast on Credit Suisse client spoils

17 Apr 2023

UBS’s wealth assets may soar to $3.4 trln after buying its main competitor. Yet, smaller challengers are looking to poach private bankers, and clients will diversify away from the new mega-bank. And rival financial hubs have a golden opportunity to dent the Swiss wealth crown.