Banks

BNP defies French banks’ interest-rate malaise

3 Nov 2022

The 60 bln euro lender’s top line is rising handily. That’s partly because CEO Jean-Laurent Bonnafé has tilted BNP Paribas away from Gallic retail banking, where regulations restrict its ability to earn more as rates rise. A valuation premium to local rival SocGen looks assured.

Wealth darling DBS channels Singapore’s success

3 Nov 2022

It wasn’t just rising interest rates that helped the $63 bln bank led by Piyush Gupta post record quarterly earnings. DBS also benefitted from the city-state’s borders reopening and boosting lending as high earners move to the finance hub. That augurs even more growth to come.

Saudi Credit Suisse deal is fair Buffett imitation

2 Nov 2022

The kingdom’s biggest lender is ponying up $1.4 bln to help the weak bank raise capital. It’s not getting the sweet terms the Sage of Omaha extracted from Goldman in 2008 but the returns are still in his ballpark. And if Credit Suisse struggles, a breakup may limit the downside.

Hong Kong-Wall Street group hug only does so much

2 Nov 2022

James Gorman, David Solomon and other banking bigwigs flew in for a confab aimed at restoring the financial hub’s stature. Amid Covid curbs and geopolitical tensions, their presence alone is a boost. Curbing capital flight from the city and the mainland, though, will be tougher.

Capital Calls: DuPont, Dollar stores, Twitter

2 Nov 2022

Concise views on global finance: The chemicals company takes an unexpected but welcome M&A break; Dollar General is being sued for practices that raise questions about pricing power; and Elon Musk plans to charge micro-bloggers for blue checks to help cover his huge deal costs.

Capital Calls: NatWest nerves

28 Oct 2022

Concise views on global finance: Shares in the government-backed UK lender fell 8% after it revealed an impairment charge 43% above what analysts had expected.

Fear makes Macquarie shareholders reasonable

28 Oct 2022

The $42 bln Aussie financial powerhouse’s value has finally dropped to a level justified by its profitability. That’s mostly thanks to boss Shemara Wikramanayake’s warnings that earnings might slow. If skies clear, irrational investor exuberance could revive in a flash.

Capital Calls: ECB’s bank-earnings squeeze

27 Oct 2022

Concise views on global finance: Seeking to shrink its balance sheet, the European Central Bank introduced less favourable terms for cheap loans it offered to lenders during the pandemic.

Credit Suisse begins perilous ride to right place

27 Oct 2022

CEO Ulrich Körner will raise $4 bln of capital to finance redundancies and a halving of the investment bank. After several botched strategies, Credit Suisse is now pointing in the correct direction. But ongoing heavy losses, and low 2025 targets, imply a messy few years ahead.

European banks’ perfect moment will prove fleeting

26 Oct 2022

Rates are rising, traders are busy, and customers are paying their debts. That helpful backdrop helped Barclays, Deutsche and Santander average a punchy 11% return on tangible equity so far in 2022. But with recession looming, and bad-debt buffers looking low, it may not last.

HSBC ditches its cost-cut tsar before job is done

25 Oct 2022

Boss Noel Quinn is replacing CFO Ewen Stevenson with investment bank co-head Georges Elhedery. It’s odd timing, since the $100 bln lender has not finished slashing expenses, which is Stevenson’s speciality. Elhedery will have to wield the axe quickly to avoid spooking investors.

ECB $2 trln bank-loan unwind is fraught with peril

25 Oct 2022

The European Central Bank may tweak a funding scheme to stop lenders minting money at its expense. Fiddling with the terms is legally dubious. Other options could undercut its fight against inflation. But the status quo, indirectly costing taxpayers billions, is unsustainable.

If Credit Suisse loves its bankers, set them free

21 Oct 2022

The Swiss bank may bring outside investors into its dealmaking unit, to insulate it from parental turmoil. The business could be worth up to $6 bln, valued in line with boutique advisory shops. Yet the best way to hit such a price tag is for Credit Suisse to cut it loose.

Goldman Sachs alumni rebuild Goldman of yore

20 Oct 2022

Byron Trott’s BDT boutique is uniting with Michael Dell’s $20 bln investment firm, also led by a veteran of the Wall Street bank. Backing clients under a veil of privacy and less regulation evokes pre-IPO Goldman. Preserving the culture should be easier in a small shop.

Fintech fight adds fillip to M&A Down Under

19 Oct 2022

Westpac, a buyout group supported by Atlassian co-CEO Mike Cannon-Brookes and other bidders are chasing $500 mln Tyro Payments. After months of floundering tie-ups, like KKR’s pulled Ramsey pitch, and a 60% drop in deal volume, bankers would be content just to get this deal done.

Goldman’s brainwaves are best left for its clients

18 Oct 2022

The Wall Street firm’s consumer bank Marcus – now being dismantled – was a good idea that was executed better by others. With a new revamp, Goldman is sticking to what it does best: marketing to companies instead. Its third-quarter earnings show that’s enough.

Goldman rejig shows its strengths and imbalances

17 Oct 2022

The $102 bln Wall Street firm is putting investment banking and trading in a single unit while breaking up its consumer activities. The result will be one huge, one medium-sized and one tiny division. If that makes Goldman clearer, it also emphasizes its lopsidedness.

Capital Calls: Ye makes a social media frenemy

17 Oct 2022

Concise views on global finance: The singer formerly known as Kanye West has bought social media firm Parler, which is going after the same users as the former U.S. president’s Truth Social. If Elon Musk ends up owning Twitter, both will be losers.

Credit Suisse legal tab is wildcard for investors

17 Oct 2022

The bank settled an old mortgage case without having to set more money aside. But the bill for future litigation, up to $1.6 bln on its own estimates, will erode earnings. The risk for investors in a looming rights issue is that further nasties bog down the bank’s restructuring.

Big U.S. banks shoulder first-world problems

14 Oct 2022

While loans are getting shakier and deposits are ebbing, third-quarter earnings show JPMorgan, Wells Fargo and Citi ready to face a recession. What might once have been existential threats are now valuation issues. It’s a reminder that the big systemic risks now lurk elsewhere.