Banks

ECB bank snub is good for Orcel, bad for M&A bulls

26 Mar 2025

The supervisor has queried Banco BPM’s use of the ‘Danish Compromise’ in its swoop on fund group Anima. That’s bad for the acquirer. But it’s good for UniCredit CEO Andrea Orcel, who wants to buy BPM – and for those who want M&A to be based on logic, not capital arbitrage.

Citi bonuses provide helpful how-not-to guide

20 Mar 2025

The US mega-bank is doling out the last portion of three-year, $5 mln awards aimed at helping improve persistent risk and control lapses. The top brass fell short, slashing the final payout ratio to 68%. Even that is too much in a sign of how badly the plan was designed.

US banks set to capitalize on rare globalist pact

13 Mar 2025

Michelle Bowman should be a welcome pick as the Fed’s new sheriff to JPMorgan and its peers. She has advocated for aligning rules with Europe and beyond. It probably means a planned 9% capital hike on big lenders will vanish without upending the broader Basel Endgame framework.

Bank investors bet on car loan scandal airbags

13 Mar 2025

A court verdict on mis-sold motor loans could pave the way for large fines for lenders like Lloyds. Yet that would undermine chancellor Rachel Reeves’ growth agenda, and the regulator has ways to limit the damage. Current stock prices imply a dent rather than a pile-up.

Wall Street’s deal pipeline talk springs a leak

12 Mar 2025

After a so-so 2024, banking bosses have boasted that they see a boom of corporate matchmaking incoming, despite a 17% drop in M&A volume to kick off the year. Unusual layoffs at Bank of America, Goldman Sachs and others betray a distinctly more reserved outlook.

India’s banks face a new credibility test

12 Mar 2025

Shares in IndusInd, the country's fifth-largest private lender, fell 27% after it reported a derivatives lapse that will hit earnings. Cascading issues from management churn to bad loans seem to set it apart. But the latest mess will inspire heightened scrutiny of its peers too.

Italy’s great Generali game enters fateful round

10 Mar 2025

Rival investors are battling for control of the $52 bln insurer. A hostile takeover of Mediobanca and a new law could shift the power balance. Rival lender UniCredit might also play a role. The risk is that Generali’s governance becomes even more complex, echoing its past.

China’s bank recap exposes lenders’ dilemma

5 Mar 2025

The weakest Big Five lender, $70 bln BoCom, may be the first to get a capital injection from the state. Beijing will want it to spur lending to help drive economic growth. But with more earnings-sapping rate cuts likely, BoCom would be better off keeping any new powder dry.

EU banks’ M&A secret weapon nears sell-by date

3 Mar 2025

The ‘Danish Compromise’ lets Europe’s lenders buy insurers while shielding the capital hit. Yet Italy’s battle over $15 bln Banco BPM suggests the tool can also be hard to deploy. If financial groups fear regulators could withdraw the wheeze, maybe it’s no longer much use.

A Chinese Morgan Stanley is worth an M&A shot

3 Mar 2025

CICC may merge with Galaxy, per Reuters. They denied it, but a tie-up would combine a retail broker and an investment bank, as CICC’s Wall Street co-founder did with Dean Witter. It has more logic than earlier state-led deals, though being a global player would remain a stretch.

Fracturing world muddies Bill Winters’ options

21 Feb 2025

The CEO of $35 bln Standard Chartered has had a mostly underwhelming decade at the bank. Recent departures at the top make it hard to bow out. And a global trade war may benefit the emerging markets lender, enticing him to stay. But the fallout could upend his progress, too.

New HSBC CEO leaves growth question on backburner

19 Feb 2025

Georges Elhedery announced $1.5 bln of cost cuts that should help keep the $200 bln bank fairly lean. The bigger problem is HSBC’s revenue, which risks stagnating as rivals expand. The implication is that growth is out of the new CEO’s hands, making a valuation boost unlikely.

India’s banks will struggle to keep equities crown

19 Feb 2025

Kotak joined the ranks of the top 10 stock underwriters globally in 2024, a first for the country's financiers. Compatriots are doing well too. A record $71 bln of fundraising activity in rich local equities helped. It'll be hard to repeat as markets elsewhere come back to life.

New Commerz plan may help UniCredit’s Andrea Orcel

13 Feb 2025

The $24 bln German bank is targeting a 15% return on tangible equity in 2028, up from 9.2% in 2024. Yet the goals are underpinned by optimistic revenue assumptions and seem light on safer cost cuts. The minute CEO Bettina Orlopp puts a foot wrong, her Italian suitor can swoop.

Andrea Orcel’s M&A hunt homes in on Italy

11 Feb 2025

The UniCredit boss pledged bold returns, even as lower rates squeeze banks’ lending margins. Solid performance, and a whirl of rival deals, make his bid for $14 bln Banco BPM increasingly realistic. That’s just as well, since his pursuit of Commerzbank looks ever more distant.

New Italy bank M&A may yet be more than a sideshow

7 Feb 2025

On the face of it, BPER’s $4.5 bln all-share bid for Banca Popolare di Sondrio is just another tie-up in a domestic merger trail blazed by UniCredit and others. But while those deals remain live, they may not all happen. If so, bulking up now might allow BPER to play a role.

French banks can shake off pariah status

6 Feb 2025

BNP Paribas and Société Générale trade at lower valuations than peers, despite improving returns. Narrow margins on domestic loans mean they didn’t benefit much from higher rates, but they could as the ECB cuts. And low sovereign exposure can buffer any political ructions.

Nomura is on the cusp of its promised re-invention

6 Feb 2025

A strong performance by its investment bank helped the $20 bln Japanese firm deliver an 11.8% return on equity last quarter. Profit is more diversified than when Kentaro Okuda took the reins five years ago. His next job is to convince investors that the results are sustainable.

Ana Botín’s final target looks the hardest to bag

5 Feb 2025

After strong results, the Santander chair has hit her multi-year goals. But the $85 bln bank’s robust 16% return on tangible equity isn’t reflected in its valuation. Trying to fix this – via big US deals, or further focus in line with local rival BBVA – itself carries risks.

Answer to UBS’s chronic US problem may be M&A

4 Feb 2025

CEO Sergio Ermotti’s key Americas wealth unit manages $2.1 trln but has a tiny 9% pre-tax margin. He wants to get that figure to 15%, which is still miles below Morgan Stanley’s equivalent number. Buying a US money manager, or even an investment bank, could help close the gap.