Banks

Capital Calls: Bank stress tests, Japan inflation

24 Jun 2022

Concise views on global finance: U.S. lenders passed the latest Federal Reserve capital exams, but they’re bound to be more stressful next time; the country’s consumer prices rose 2.1% in May, intensifying a standoff between the central bank and bond investors.

Capital Calls: Hydrogen IPO, Call centre M&A

20 Jun 2022

Concise views on global finance: Despite Thyssenkrupp postponing its clean energy listing, De Nora is still pressing on with its own one at a lower 3 bln euro valuation; customer-service group Sitel agrees to buy 2.6 bln euro rival Majorel in a cash-and-stock deal.

Western bankers’ long wait for Gulf gold pays off

20 Jun 2022

Not long ago, U.S. and European lenders’ Middle East jobs meant low-paid work and no play. Now, oil-funded deal flow in Riyadh and Dubai is robust even as it falls elsewhere. That’s a boon for the likes of JPMorgan and Citi, who stuck it out and are now boosting their teams.

Santander picks anti-Orcel as new CEO

17 Jun 2022

After bungling the hiring of the former UBS banker in 2019, Executive Chair Ana Botín and the board have picked a safe choice in Héctor Grisi. The insider won’t require a hefty payout and has experience running a retail bank. He’ll need it given Santander’s lowly share price.

Credit Suisse pays up to pretend all is well

17 Jun 2022

The Swiss lender’s efforts to refinance hybrid credit mean it’s paying a steep 9.75% coupon. Investors expect banks to offer to buy back this sort of debt, but Santander opted not to in 2019. Credit Suisse’s ongoing headaches means it has less scope for such brusque treatment.

Power providers tempt Wall Street-style backlash

17 Jun 2022

Australia halted electricity trading because generators were “gaming” the system, Prime Minister Anthony Albanese says. Such behaviour risks inviting widespread uproar as banks did during the financial crisis. It’s a bad spot to be in as a new government upgrades climate goals.

Capital Calls: Revlon, Bank of England

16 Jun 2022

Concise views on global finance: The makeup company filed for bankruptcy but its lasting contribution to financial history was a ruling that boards must maximize value; the UK central bank keeps concerns about runaway prices in check with a modest hike in borrowing costs.

Central bankers forget the lessons of the 1970s

16 Jun 2022

Inflation is complex, yet all sustained increases in prices have been accompanied by an expanding money supply. The Federal Reserve and other central banks ignored this the last time inflation took off, writes Edward Chancellor. There’s no sign they are learning any faster today.

ECB’s crisis weapon pledge is vague and late

15 Jun 2022

The European Central Bank will “accelerate” work on a new tool to control soaring bond yields from weak sovereigns. The lack of detail reflects divisions within the bank on when and how to use such a programme. It’s an invitation to markets to test the ECB’s resolve yet again.

Capital Calls: Banks’ WhatsApp crackdown

15 Jun 2022

Concise views on global finance: Credit Suisse removed a 28-year veteran for using an unapproved messaging service.

Crashing yen disturbs Haruhiko Kuroda’s zen

15 Jun 2022

Japan’s currency is at its weakest against the U.S. dollar since 1998 and bond traders are revolting. It disrupts the central bank governor’s meditations on the mystical balance between growth, public debt and near-zero rates. Stagflation risk suggests a new mantra is warranted.

Italian banks face return of sovereign embrace

14 Jun 2022

A decade ago, soaring government bond yields threatened to drag down domestic lenders. Today, banks have shrunk state debt to less than 7% of total assets, while cutting dud loans and building capital buffers. As the ECB retreats, the pressure to load up again will increase.

Apple pay-later foray blurs tech-finance boundary

9 Jun 2022

The $2.4 trln iPhone maker will use its balance sheet and data on user spending to offer short-term instalment loans. Fear of regulation and humdrum returns have largely kept big U.S. tech firms out of the lending business. Banks will be watching with interest – and trepidation.

Crypto smackdown does more harm than good

8 Jun 2022

The SEC wants firms that safeguard digital assets to mark that risk on their balance sheets. That means certain lenders may have to hold more capital against crypto. Though guardrails are useful, the measure could shut out banks like Goldman and incentivize more shadowy businesses.

Capital Calls: Fertilizer woes plant seed of doubt

8 Jun 2022

Concise views on global finance: Scotts Miracle-Gro’s profit warning nods to wide effect of commodities price surge.

EU banks’ fading growth hopes imply more cost cuts

6 Jun 2022

After more than a decade of austerity, lenders like BNP and Deutsche are now betting on rising revenue to deliver adequate shareholder returns. A lacklustre economy could scupper that. To hit their targets, banks may have to slice into technology budgets and branch networks.

DWS CEO exit is helpful deterrent for greenwashing

1 Jun 2022

Asoka Woehrmann resigned from the $7 bln asset manager as regulators probe allegations it exaggerated its sustainable investing skills. Fund groups have benefitted from booming demand for ESG investments. The fallout at DWS gives other bosses an incentive to tone down the hype.

Credit Suisse capital hike would speed turnaround

31 May 2022

The bank is considering raising $1 bln of equity, Reuters reported. That would be painful at such a low valuation, and the company denied it. But bigger balance-sheet buffers could fund faster shrinkage of the accident-prone investment bank, reducing its share-price drag sooner.

Nomura and Mitsui cultivate fertile climate ground

31 May 2022

The Japanese duo is buying trees-focused Australian fund manager New Forests. Mitsui also has backed Climate Friendly, which helps farmers sell carbon credits for sustainable agriculture. Done properly, it’s a lucrative and impactful sector deserving of greater investment.

Angola bank IPO ends very long march to capitalism

30 May 2022

Eight years after its birth, the African oil producer’s stock market is finally getting its first listing. Given the delay, floating 10% of lender BAI is a coup for President Lourenço’s reform drive. At under $1 bln, the valuation is low enough to ensure it completes the trip.