Banks

Bank mortgage tweaks presage bigger political hit

14 Oct 2022

Spain’s CaixaBank proposed a rate freeze, while UK lenders favour ad hoc relief for struggling borrowers. As interest costs soar, these won’t be enough to avoid a mess. Since cash-strapped governments can’t help, they may hammer banks with Polish-style blanket payment holidays.

Monte Paschi life raft has yet to reach safe port

13 Oct 2022

Five years after a state bailout, the lender has secured last-minute backing for a new 2.5 bln euro rights issue. Stronger capital and fewer costs will make MPS a more palatable target. But buyers would need hefty profit assumptions to pay anything other than a lowball price.

Wall Street has chance to put Hong Kong to work

13 Oct 2022

Leaders from Goldman Sachs, Blackstone and peers will arrive at the city’s upcoming banking summit with a long wish list. Progress in China has been slow. Hong Kong can’t force policies in Beijing, but can lobby on the financiers’ behalf. They’re well placed to press their case.

A private lender eats buyout bankers’ lunch

11 Oct 2022

With public debt markets shut, funds that help finance leveraged buyouts and other deals have become the only game in town. In this episode of the Exchange podcast, Blue Owl co-founder Marc Lipschultz explains how private credit has muscled in on investment bankers’ home turf.

CEO pay spotlight leaves workers in the shade

10 Oct 2022

New SEC rules mandating more detail on executive pay will burden companies without much helping investors. Yet there’s still too little transparency in how companies pay the rank and file. Investors already see what Walmart pays its CEO, but not his 2.3 mln colleagues.

India turns bank privatisation dithering into win

10 Oct 2022

New Delhi mulled ceding control of IDBI in 2016 when the lender was beset by bad loans. After a painful process, it’s healthier and its market value has tripled to $5.6 bln. And official foot-dragging means it can now sell a 60% stake to buyout firms from a position of strength.

How Cowen’s golden parachutes landed with a thud

7 Oct 2022

Canada’s TD Bank had to negotiate twice in its $1.3 bln bid for the U.S. investment bank: first with the board, then with executives armed with fat severance packages. The $200 mln retention bill is high, but just half what it could have been. Dealing with dealmakers is costly.

Credit Suisse’s debt move is largely reassuring

7 Oct 2022

The lender is buying back $3 bln of bonds, a way to remind credit markets of its cash mountain. Having to reassure on liquidity is hardly ideal, but Credit Suisse’s cost of insuring against default fell. For shareholders, it also flags the bank has creative ways to boost capital.

Capital Calls: Peloton races tough economic cycle

6 Oct 2022

Concise views on global finance: The $2.9 bln fitness company is laying off staff for the fourth time this year in a turnaround bid for survival.

Credit Suisse can stop rot with $5 bln cash call

5 Oct 2022

Heavy investment-bank losses and higher funding costs risk damaging the Swiss group’s core wealth unit. Chair Axel Lehmann can draw a line by ditching debt trading and slashing costs. To shrink he needs more capital. Asking investors for equity is cleaner than tricky asset sales.

HSBC Canada exit could be a nice clean break

4 Oct 2022

The Anglo-Asian lender is diminutive in a market dominated by a few giants. That, though, might make it easier to sell its profitable Canadian operations without too much antitrust and politics. Tiptoeing away from Canada’s carbon-intensive energy sector can’t hurt either.

Credit Suisse selloff throws wrench into revamp

3 Oct 2022

The bank’s shares fell 8% on Monday and the cost of insuring its debt soared. Chair Axel Lehmann may struggle to sell assets amid the turmoil, undermining a strategic overhaul. A sustained rout could even force him to raise capital fast – at a painful valuation for shareholders.

SocGen’s new insider CEO requires outsider mindset

3 Oct 2022

The French lender trades at a third of tangible book value – lower than almost all its rivals. Next boss Slawomir Krupa previously ran investment banking and eastern Europe, both of which arguably drag down its shares. Breaking with the past may require shrinking his old charges.

There’s nowhere left for M&A bankers to hide

30 Sep 2022

Even after quarters like the latest one, when volume fell 58% to $640 bln, dealmakers find silver linings. The pipeline somehow stays full and there are reasons for firms to buy despite bleak economic prospects. Breakingviews instead imagines what a candid rainmaker might say.

Wall Street job cuts will be shallow and painful

29 Sep 2022

The slowdown in trading and dealmaking may suggest it’s time to swing the axe. But despite big firms’ headcount growing 10% since the pandemic, there’s surprisingly little fat to cut. Those on the front line will have to jostle with new recruits who don’t directly bring in bacon.

Goldman’s buyout push casts shade on its home turf

28 Sep 2022

The bank’s $10 bln buyout fund puts it back in the arena with the likes of Blackstone. Being both adviser and investor benefits the firm’s shareholders. But banking clients may not like Goldman cornering the market, and past lessons show crossing the streams can cause tension.

Wall Street sends regulators a poop emoji

28 Sep 2022

Eleven firms have paid $1.8 billion in fines for employees’ unapproved use of platforms like WhatsApp. The rules may have been hard to enforce. But the response — to collectively flout them at every level — is alarming. Meanwhile the mass fine looks essentially toothless.

Guest view: Russia sanctions lack decisive punch

27 Sep 2022

Restrictions imposed by the United States and its allies following President Vladimir Putin’s invasion of Ukraine have done economic damage, write William Rhodes and Stuart Mackintosh. But Cuba and Iran show American sanctions are not decisive in changing geopolitical outcomes.

UK swaps one cost-of-living crisis for another

27 Sep 2022

The Bank of England may raise rates past 5% to stem the inflationary effect of Chancellor Kwasi Kwarteng’s tax cuts. Homeowners, saved by the government’s energy price cap, now face a surge in mortgage costs. That will sap growth and add to pressure for banks to help customers.

Mega-bank status weighs on U.S. banking’s B-team

26 Sep 2022

Bosses from U.S. Bancorp, Truist and PNC joined their JPMorgan and Bank of America counterparts for a Capitol Hill grilling, and could face similar capital rules, too. It wouldn’t help the system much, but might hurt competition. There are better ways to keep goliaths in check.