Banks

ECB’s bank loan-loss worries look overdone

7 Dec 2022

Chief supervisor Andrea Enria fears that BNP, ING and others are flying blind into a 2023 default storm. But rate hikes will give the 10 largest lenders a 120 bln euro profit buffer before their capital gets hit. The big banks can afford to keep going with dividends and buybacks.

UniCredit CEO Orcel has leverage in pay debate

6 Dec 2022

The veteran dealmaker has hit his bank’s targets this year and narrowed a valuation gap to peers. Andrea Orcel may therefore deserve his maximum annual bonus. A pay hike beyond that is less obviously required, but legitimate fears he may jump ship may tip the board to offer one.

Mukesh Ambani will take credit where it’s due

6 Dec 2022

The Reliance boss is pushing into consumer lending and might trim his stake in the $220 bln conglomerate to fund the move. A star-banker hire, and huge customer base are pluses. Still, there’s good reason for the tycoon to play down his ambition in this booming corner of finance.

Circle’s SPAC flop does the public market a favor

5 Dec 2022

The stablecoin that CEO Jeremy Allaire runs is meant to have a predictable, steady price. But the company, which scrapped a merger with a blank-check firm, defies valuation. That could change, but only if the crypto storm calms and Circle can remain profitable until then.

Aussie energy woes put miners in windfall hole

5 Dec 2022

Canberra may cap the soaring price of coal or tax profits to reduce electricity costs. That’s a potentially explosive new risk for producers like Whitehaven, which is buying back up to a third of its stock at near record highs. Such short-term largesse could come back to burn.

Credit Suisse banks needn’t break too big a sweat

1 Dec 2022

The lender’s battered shares are now trading just 7% above the price of its $2.4 bln rights issue. A further slump could leave Deutsche, Morgan Stanley and 18 other underwriters with unwanted stock. But they have a margin of safety, and Credit Suisse may have backup options.

EU makes partial retreat in clearing crusade

30 Nov 2022

Brussels may make banks clear some euro swaps on the continent, rather than stop them using venues like London altogether. The move avoids the disruption of a blanket ban, but would still push up costs. Clearing risks are best tackled through closer regulatory cooperation.

UK banks’ Big Bang thankfully looks like big flop

30 Nov 2022

Prime Minister Rishi Sunak wants to use Brexit freedoms to boost the City’s appeal. Yet supervisors plan to introduce tougher bank capital rules than in Europe, and so-called ringfencing will remain for big lenders. That’s good: strong regulation can be a competitive advantage.

HSBC’s $10 bln Canada sale is ad for bank breakups

29 Nov 2022

The British lender is selling its Vancouver-based unit to Royal Bank of Canada for an eye-watering 3 times tangible book value. The buyer is paying up because it hopes to slash 55% of costs. If that’s plausible, investors should ask what else global retail banks should sell.

FTX collapse consigns crypto to fringes of finance

24 Nov 2022

Sam Bankman-Fried’s failed crypto exchange is a huge blow to the ailing sector. In this Viewsroom podcast, Breakingviews columnists discuss how firewalls helped protect banks, how the saga will embolden regulators, and what the future looks like for digital currencies.

Credit Suisse rot infects wealth-management core

23 Nov 2022

The prized division lost 10% of its assets in six weeks, though the outflows have slowed. That undermines CEO Ulrich Körner’s narrative that the group’s problems are all in investment banking. Clients don’t make that distinction, and it’s easier to lose money than win it back.

SocGen’s BNP envy carries a cost

22 Nov 2022

Future CEO Slawomir Krupa is merging his stock research and trading unit with U.S. peer AllianceBernstein, aping his French rival’s capital markets drive. But the $20 bln bank will lack the scale of U.S. rivals, and growing in low-return businesses won’t help a lagging valuation.

India watchdog ire cools foreign banks’ ambitions

16 Nov 2022

It’s bristling at the idea of Europe’s regulators inspecting its clearing houses. The fallout could lump SocGen, BNP Paribas and others with costs making them uncompetitive. Throw in uncertainties in China, and India is giving bankers a new reason to consider an Asian retreat.

Capital Calls: Jeff Bezos

15 Nov 2022

Concise views on global finance: The Amazon founder is telling consumers to batten down the hatches. Yet the e-commerce giant has plenty of room to capture more online market share.

Piyush Gupta might be banking’s boldest boss

15 Nov 2022

Buying banking assets is complex at the best of times. Singapore’s $65 bln DBS added a geopolitical twist when it agreed to acquire Citi’s Taiwan consumer bank. As tensions rise, Gupta is holding his nerve on the deal due to close next year. Then again, he has little choice.

How Credit Suisse’s turnaround could work

10 Nov 2022

CEO Ulrich Körner is raising $4 bln of fresh equity and shrinking the Zurich-based group’s trading business to put it on a steadier footing. In this Viewsroom podcast, Breakingviews columnists debate the merits of the plan and what’s at stake if it fails.

The music at India’s credit party is strained

9 Nov 2022

State Bank of India and its peers are lending at their strongest pace since a bad debt crisis. Some others are going to unusual measures to attract deposits. Far from being a sign the country will emerge as a global bright spot, banks may soon start pulling back.

Guest view: Climate finance club hands over baton

8 Nov 2022

It’s a year since banks, investors and insurers with a collective $130 trln convened in the Glasgow Financial Alliance for Net Zero. Despite some setbacks, the group has made progress, writes Huw van Steenis. Now it’s up to governments to help unlock more green investments.

Credit Suisse puts “first” back into First Boston

3 Nov 2022

There’s no historical precedent for a global bank carving out and listing its underwriting and M&A unit. The spinoff’s revenue-sharing joint ventures will only partly smooth an awkward relationship with its Swiss parent. Future boss Michael Klein gets credit for novelty, though.

Monte Paschi cash gambit leaves bitter aftertaste

3 Nov 2022

The bailed-out lender secured 93% backing for its 2.5 bln euro cash call. Financially, that's a success. But investors will include bank foundations, a past source of political meddling. A conversion of junior bonds would have saved taxpayers high fees and interest payments.