Banks

HSBC cost cuts expose new CEO’s bigger problem

10 Oct 2024

Georges Elhedery may slash $300 mln of expenses in a plan to combine investment and commercial banking, the FT says. Yet the savings are modest and a new super-division may have downsides. Investors will be more interested in how Elhedery keeps the top line growing as rates fall.

Hey team: Weaker hiring means back to the office

8 Oct 2024

About 100 mln people in North America and Europe now work remotely at least some days. More CEOs, like Amazon’s Andy Jassy, want to end the practice altogether. The tension is upsetting staff and spurring defections, but a rise in joblessness would shift power back to employers.

Greece is unlikely victor in bank selldown race

3 Oct 2024

Athens sold 10% of National Bank, effectively ending the privatisation of the major lenders it rescued. Germany, the Netherlands, the UK and Ireland still own bank stakes. Greeks can thank continued government support and a strong economy, fuelled by rising investment.

Commerzbank fight is stress test for EU bank union

27 Sep 2024

Regulators spent years trying to level the playing field for euro zone banks. That should clear the way for UniCredit CEO Andrea Orcel’s mooted bid for the $20 bln German lender. If Chancellor Olaf Scholz thwarts the Italian group, new barriers may soon spring up elsewhere.

China’s march to strong yuan is long and perilous

26 Sep 2024

President Xi Jinping wants a more powerful currency. This means increased usage of the renminbi in global payments and central bank reserves, rather than replacing the dollar. But Beijing’s desires for bigger forex heft clash with its need to keep a tight grip on the economy.

Commerz ills make M&A a question of when not if

25 Sep 2024

The German government backed the $20 bln bank’s quest to stay independent amid UniCredit’s approach. But lower rates and a lack of scale mean new CEO Bettina Orlopp will struggle to earn a good return, and so need a merger partner. Patience may reward would-be buyer Andrea Orcel.

Beijing’s $114 bln stock market bet rings hollow

25 Sep 2024

The central bank is hoping to jump-start a lasting stock market recovery by funding investments and share buybacks. But without a way to deal with underlying lacklustre growth, such schemes are likely to provide a short-term boost that soon fizzles out.

Germany’s fiscal obsession leads to bad deals

24 Sep 2024

Finance Minister Christian Lindner is rushing to plug short-term budget holes with a privatisation spree. But he is leaving money on the table. UniCredit only paid a 4.7% premium to buy a stake in Commerzbank. To feed its debt-reduction addiction, Berlin needs better M&A advice.

Beijing partially shuts door to big bang stimulus

24 Sep 2024

The central bank surprised markets with sweeping rate cuts and hinted at more easing. It's a sign that planners are leaving the heavy-lifting to monetary policy. Piecemeal fiscal measures may come later this year, but the window for Beijing to hit its GDP target is closing.

Andrea Orcel has scope to soften his Commerz raid

23 Sep 2024

The UniCredit CEO upped his stake in the German bank to 21%, after his approach met a cool reception. The brassy move, and use of derivatives, may anger Berlin further. Luckily, the high returns on offer mean Orcel can make job pledges to soothe M&A-wary unions and politicians.

Bank mega-M&A gets tantalisingly close in Europe

19 Sep 2024

UniCredit, the $68 bln Italian lender, grabbed a 9% stake in Germany’s $16 bln Commerzbank. In this Viewsroom podcast, Breakingviews columnists argue that a full merger makes financial sense, but potentially not for unions or the under-fire government in Berlin.

Commerzbank’s UniCredit defences are built on sand

17 Sep 2024

German politicians fret that a key domestic lender may end up under foreign control, now its Italian rival holds 9%. Berlin’s 12% stake complicates that. But it has no legal mechanism to block a deal the ECB may support, and Deutsche Bank makes for a problematic white knight.

India’s mortgage IPO builds on many riches

16 Sep 2024

Shares of Bajaj Housing surged 125% on their debut. That reflects faith in its $56 bln investor darling parent and robust demand for expensive homes. It also hints at deep scepticism among sellers about the sustainability of rich valuations in the country's equities market.

The UK’s finance-business chasm is as wide as ever

13 Sep 2024

British investors and regulators are fretting that capital markets do not adequately serve local companies. The long-running issue is rooted in the country’s outsized financial sector, which brings in 12% of GDP. Recent reforms will struggle to address the underlying problem.

Orcel uses hammer to unpick UniCredit-Commerz lock

11 Sep 2024

The Italian bank’s CEO is eyeing a full takeover of the $16 bln German lender. Andrea Orcel is taking a blunter route than past M&A talks between the two banks, which used structures like a Frankfurt-listed subsidiary to appease Berlin. His way is more rewarding, but riskier.

UK bank tax would fall on shrinking shoulders

11 Sep 2024

Lenders fear that finance minister Rachel Reeves will tap them to help plug a fiscal ‘black hole’. Reversing a tax cut from the last government would be the simplest option. The high returns of NatWest, HSBC and Lloyds suggest they can afford it, but rate cuts may change that.

China’s banks have a nasty case of indigestion

11 Sep 2024

For decades, Beijing leaned on lenders to fuel growth in the $17 trln economy. But it will take years for them to digest problem IOUs from firms and local governments. Officials will have to find new ways to boost GDP, or the financial dyspepsia could turn into something worse.

Fed’s Basel climbdown leaves foot on rules ladder

10 Sep 2024

Facing intense industry opposition, top US regulator Michael Barr proposed softer new capital rules for lenders like JPMorgan. There’s good reason to revisit many pain points. But despite shaving maybe $100 bln off the burden on the biggest banks, a philosophical shift remains.

Germany gets timing wrong with Commerzbank sale

4 Sep 2024

At first glance, the decision to offload shares in the 16 bln euro lender seems smart given a 130% share-price jump in three years. But the valuation is still low. And if long-rumoured M&A materialises, Berlin will forego its special influence and miss out on a takeover premium.

Deutsche’s UK broking adventure takes early detour

3 Sep 2024

The German bank’s $500 mln acquisition of Numis brought relationships with London-listed firms like Rightmove. Now it’s suspended work with the property portal after opting to advise Rupert Murdoch’s REA on a possible bid. Other UK clients may discount future claims of loyalty.