Banks

India’s bond inclusion will be overdue and timely

26 Sep 2022

The sovereign debt of the world’s fifth-largest economy may be added to JPMorgan’s emerging market index, offsetting Russia’s exclusion. It’s a step towards prising open a $1 trln market, and a feather in India’s cap. But there are reasons it took so long.

Wall Street’s banking-as-a-service has a problem

23 Sep 2022

Private equity’s rising share of M&A — up to 26% this year — should be great for banks, who can resell their capital markets services to LBO shops. But as debt markets groan and equity markets stop up, it could be one more subscription business hurt by the downturn.

Bank of Cyprus bid makes case for lender buyouts

22 Sep 2022

Lone Star offered 700 mln euros for the Mediterranean group. It could probably make a good return even if it paid much more. Growing interest from private equity puts other beaten-up minnows on notice, and could be a boon for unwieldy giants in need of pruning, like SocGen.

Corporate lemons will vex Italy’s next government

22 Sep 2022

Premier Mario Draghi couldn’t sell bailed-out Monte Paschi nor halt a share slide at indebted Telecom Italia. If right-wing Giorgia Meloni wins Sunday’s election, she will have to untangle such company knots. Her zeal for patriotic solutions may prove costly and inefficient.

First Boston deserves a selective revival

20 Sep 2022

The defunct brand evokes discord and failure on Wall Street, but also the feats of M&A swashbucklers like Wasserstein and Perella. Reapplying it to Credit Suisse’s investment bank could draw a line to cut along later, a move true to First Boston’s decades-old pioneering spirit.

Petrodollar rush may disappoint Western financiers

20 Sep 2022

In prior energy booms, like in the 1970s, the proceeds wound up in U.S. banks and bonds. OPEC’s $907 bln haul in 2022 is smaller, and winners like Saudi Arabia need cash to pivot away from oil. Bankers may not see a developed world equities and debt bonanza on the same scale.

Capital Calls: Byju’s revenue fail

15 Sep 2022

Concise views on global finance: Byju’s topline shrunk after its auditor advised it to recognise its revenue differently.

Capital Calls: U.S. railways steer clear of crisis

15 Sep 2022

Concise views on global finance: Major U.S. railroads and unions reached a tentative deal, avoiding a shutdown that could have widespread consequences on the U.S. economy.

Bonus cap scrap would be dubious Brexit dividend

15 Sep 2022

UK finance minister Kwasi Kwarteng may dump rules curbing banker payouts to twice their salary. Yet it would only marginally boost the City’s competitiveness and may make more meaningful tax changes less likely. The benefits of tearing up EU regulations look increasingly elusive.

Bank of Japan needs to pick yen battles carefully

15 Sep 2022

The central bank is signaling it may soon intervene as its currency hits 24-year lows. Slowing rather than reversing the U.S. dollar’s rates-driven strength may be achievable, but even that demands a cannier deployment of weaponry than just throwing money at the problem.

Capital Calls: SoftBank

14 Sep 2022

Concise views on global finance: The $62 bln conglomerate may be considering a third instantiation of its Vision Fund.

Capital Calls: Oil vs. ESG

13 Sep 2022

Concise views on global finance: The price of a barrel of Brent crude has fallen 30% since mid-summer, and over 10% in two weeks. If it stays below $100 a barrel, oil companies will start to become worse investments. That could help solve backlash to ESG investing.

Capital Calls: SPACs’ long shadows

12 Sep 2022

Concise views on global finance: While electric-vehicle startup Nikola is moving beyond its founder, both it and its SPAC-partner peers are mired in supply chain challenges, slipping deadlines and tumbling share price performance.

Europe’s sturdy banks risk becoming punch bags

8 Sep 2022

Lenders like Lloyds and Deutsche are set for a rate-hike windfall even as the region faces recession. As in the pandemic, governments may prod them to offer borrowers loan repayment holidays and cheap credit to pay their bills. But this time, banks may not get as many sweeteners.

Ping An’s HSBC campaign fails the financial test

7 Sep 2022

The Chinese insurer has doubled down on its call for the $123 bln bank to spin off its Asian unit. Doing so would put cross-border revenue at risk and raise funding costs. To make it worthwhile, the business would have to snag a premium to most regional peers. That’s unlikely.

Hong Kong seeks VIP cure for strategic ills

7 Sep 2022

Central bank boss Eddie Yue wants to lure global financiers to the city's November confab, but they’re unlikely to agree without quarantine waivers. That risks local ire, but Yue has little choice. Hong Kong is losing ground. If the elite can’t come, opportunity may go elsewhere.

Capital Calls: UBS fintech U-turn, UK housebuilder

5 Sep 2022

Concise views on global finance: CEO Ralph Hamers cancels the $1.4 bln acquisition of robo-adviser Wealthfront; Countryside Partnerships accepts a 1.3 bln pound offer from UK rival Vistry just three months after rejecting a higher bid.

China’s mega-banks are priced for total disaster

1 Sep 2022

Economic stress is trickling into the country’s four giant lenders, sitting on roughly $20 trln of assets. Yet profits are decent and buffers intact. Their policy role terrifies investors, so they trade at half book value or worse. That makes them un-investable, or rather cheap.

Ping An’s reset challenge dwarfs its HSBC battle

24 Aug 2022

The $107 bln Chinese insurer beat forecasts with first-half net profit of $8.8 bln. Its calls for the London-based bank — its largest shareholding — to break up won’t alter its internal issues, though. Shares are down one-fifth this year, underscoring the cost of painful reforms.

Recession could be U.S. banks’ guilty pleasure

23 Aug 2022

Big lenders like JPMorgan and Bank of America are prepared for an economic downturn that investors have already half priced in. Not only would banks survive even a savage contraction, they might even emerge stronger as fintech rivals would face a much heavier pummeling.