Banks

Credit Suisse CEO tries to bail out a leaky ship

9 Feb 2023

Boss Ulrich Körner is cutting the Swiss lender’s costs and starting to hive off its superfluous bits. But clients have fled the core wealth business and traders seem to have stopped trading. Unless the business stabilises, he will have to pivot to a more radical breakup.

Debt is poor fix for Italian soccer’s malaise

8 Feb 2023

Having rejected private equity suitors, Italy’s top football league may turn to Wall Street banks to borrow up to 1 bln euros. The cash may give Serie A’s ailing TV rights business extra time. But without a governance shake-up, gorging on debt would extend its losing streak.

Gautam Adani’s woes were in banks’ plain sight

8 Feb 2023

Barclays, Standard Chartered, Deutsche Bank and others helped the Indian tycoon supersize his empire. A $110 bln share rout exposes their willingness to ignore warnings and take a narrow view of risk on lucrative relationships. As Adani struggles, the questions will get louder.

BNP investors deserve bigger slice of M&A windfall

7 Feb 2023

CEO Jean-Laurent Bonnafé is sitting on a 12 bln euro jackpot after selling the French bank’s U.S. business. He’s earmarked most of that for new lending and investment. But BNP’s low valuation implies shareholders think it would be better off buying back more stock.

Credit Suisse overcooks First Boston sales pitch

6 Feb 2023

The Swiss bank wants to sell $500 mln of debt, with a twist: it will be repaid with shares in its dealmaking business when that gets spun off, Reuters reported. It’s potentially a cheap way of raising funds. But it assumes investors will want those shares when the time comes.

Rothschild buyout is right idea, but on the cheap

6 Feb 2023

The family vehicle that controls the 3 bln euro investment bank wants to take it private. That’s sensible: it gets short shrift from public markets and doesn’t need access to capital. Yet strip out a chunky dividend and the price is low, which may set up a battle with minorities.

Deutsche Bank turnaround victory is really a loss

2 Feb 2023

Technically, CEO Christian Sewing beat an 8% return target that was the centrepiece of his plan to revive the former basket case. Strip out a tax gain, though, and he came up short. It leaves Sewing with a depressingly familiar job: cut costs and hope traders keep raking in cash.

UniCredit’s share-price surge has further to run

31 Jan 2023

Boss Andrea Orcel wants to hand more than 5 bln euros to investors through dividends and buybacks, after reporting stellar 2022 earnings. Further Russia writedowns are a risk, but the bank’s bottom line looks solid. A valuation of just over half tangible book value looks too low.

UBS boss Ralph Hamers has a growth problem

31 Jan 2023

Revenue in the Swiss bank’s wealth-management core slid 2% in 2022, as markets fell. Higher interest rates and China’s re-opening will ease the pain, but not for long. Hamers is running short on credible ways to get the top line moving, undermining his hunt for a valuation boost.

Goldman cuts Solomon, and his pay, down to size

27 Jan 2023

The Wall Street bank slashed its CEO’s 2022 pay by a third, to $25 mln. It comes off as less about performance than a nod to staff facing layoffs and smaller bonuses. The risk is that while employees may see solidarity, shareholders see a boss losing the confidence of his board.

WhatsApp lesson reaches Wall Street by snail mail

26 Jan 2023

Morgan Stanley has docked pay for bankers who flouted off-channel texting rules. James Gorman’s firm had already got credit from regulators for being tough on chat-app misuse. But just as following rules shouldn’t be unusual, nor should making miscreants pay for what they broke.

Why retail bankers are beating dealmakers

26 Jan 2023

JPMorgan, Citigroup and Goldman Sachs’ earnings revealed that the basic business of lending money is thriving, while investment banking is not. In this Viewsroom podcast, Breakingviews columnists debate what this says about the U.S. economy and what to expect from the Europeans.

IPO bankers may as well hit the beach until autumn

26 Jan 2023

A handful of mid-sized European companies are working on stock market debuts. But the upcoming share offerings are too small to reopen Europe’s drowsy equity capital markets. Regional ECM bankers may as well take to their sun loungers until things pick up in the third quarter.

Euro-banks have done their time in valuation jail

26 Jan 2023

Deutsche Bank, BNP Paribas and peers are valued by investors as if they are headed for a bruising slump. Yet the region’s lenders have been treading more cautiously than they did before the 2008 crisis, and have pared back risky trades. Their rehabilitation deserves more credit.

Amazon creates bazaar for U.S. banking wannabes

24 Jan 2023

The e-commerce titan’s latest debt, an $8 bln loan, is curious, but not as much as the foreign institutions providing it. Australia’s ANZ, Spain’s BBVA, Singapore’s DBS and others rarely turn up in such deals. The likelihood of them leveraging this one into more business is slim.

Bank earnings become a post-Covid parlor game

23 Jan 2023

After three years of upheaval, JPMorgan, Bank of America, PNC and other lenders are waiting for customers and markets to revert to type. Some think bad debts, spending and trading will level out; others aren’t so sure. It leaves executives in a bind, and investors in limbo.

Davos, Inc. finds reasons to be less gloomy

20 Jan 2023

Business leaders gathering in the Swiss mountain resort have plenty to fret about. Still, with China reopening, Europe keeping the lights on and interest rate pressure easing, the overriding emotion is one of relief. Less clear is whether the mood extends beyond the alpine elite.

Goldman slams into unwelcome sort of volatility

17 Jan 2023

The investment bank’s push into consumer lending was meant to bring stable growth to balance out trading swings. Instead, it has done the opposite, losing $4 bln and counting. Belated, patchy disclosures don’t help, nor does archrival Morgan Stanley’s wealth management success.

Banks dress up for a business-casual recession

13 Jan 2023

A downturn is coming, warn lenders like JPMorgan, Bank of America and Citi, but nothing too fancy. Even as bad-debt charges mount, they keep lending, especially through credit cards. After years of enforced discipline, banks are appropriately attired even if things get much worse.

Banks’ profit picnic will attract ant invasion

12 Jan 2023

Rising rates create a feast for large lenders like JPMorgan and Bank of America, even as investment banking fees wither. But customers, employees and regulators are all vying for a slice. The risk for investors isn’t that recession bites in 2023, but that expenses gnaw.