Banks

Commerzbank’s UniCredit defences are built on sand

17 Sep 2024

German politicians fret that a key domestic lender may end up under foreign control, now its Italian rival holds 9%. Berlin’s 12% stake complicates that. But it has no legal mechanism to block a deal the ECB may support, and Deutsche Bank makes for a problematic white knight.

India’s mortgage IPO builds on many riches

16 Sep 2024

Shares of Bajaj Housing surged 125% on their debut. That reflects faith in its $56 bln investor darling parent and robust demand for expensive homes. It also hints at deep scepticism among sellers about the sustainability of rich valuations in the country's equities market.

The UK’s finance-business chasm is as wide as ever

13 Sep 2024

British investors and regulators are fretting that capital markets do not adequately serve local companies. The long-running issue is rooted in the country’s outsized financial sector, which brings in 12% of GDP. Recent reforms will struggle to address the underlying problem.

Orcel uses hammer to unpick UniCredit-Commerz lock

11 Sep 2024

The Italian bank’s CEO is eyeing a full takeover of the $16 bln German lender. Andrea Orcel is taking a blunter route than past M&A talks between the two banks, which used structures like a Frankfurt-listed subsidiary to appease Berlin. His way is more rewarding, but riskier.

UK bank tax would fall on shrinking shoulders

11 Sep 2024

Lenders fear that finance minister Rachel Reeves will tap them to help plug a fiscal ‘black hole’. Reversing a tax cut from the last government would be the simplest option. The high returns of NatWest, HSBC and Lloyds suggest they can afford it, but rate cuts may change that.

China’s banks have a nasty case of indigestion

11 Sep 2024

For decades, Beijing leaned on lenders to fuel growth in the $17 trln economy. But it will take years for them to digest problem IOUs from firms and local governments. Officials will have to find new ways to boost GDP, or the financial dyspepsia could turn into something worse.

Fed’s Basel climbdown leaves foot on rules ladder

10 Sep 2024

Facing intense industry opposition, top US regulator Michael Barr proposed softer new capital rules for lenders like JPMorgan. There’s good reason to revisit many pain points. But despite shaving maybe $100 bln off the burden on the biggest banks, a philosophical shift remains.

Germany gets timing wrong with Commerzbank sale

4 Sep 2024

At first glance, the decision to offload shares in the 16 bln euro lender seems smart given a 130% share-price jump in three years. But the valuation is still low. And if long-rumoured M&A materialises, Berlin will forego its special influence and miss out on a takeover premium.

Deutsche’s UK broking adventure takes early detour

3 Sep 2024

The German bank’s $500 mln acquisition of Numis brought relationships with London-listed firms like Rightmove. Now it’s suspended work with the property portal after opting to advise Rupert Murdoch’s REA on a possible bid. Other UK clients may discount future claims of loyalty.

How HSBC can heal the scars of its CEO battle

29 Aug 2024

The $160 bln lender’s retail and wealth head Nuno Matos left after losing out on the top job to Georges Elhedery. The bank now has an empty CFO post, and a lack of potential future leaders. Recruiting heavy-hitting outsiders, like Citi’s Jane Fraser has done, would help.

Deutsche’s legal seesaw flags investor blind spot

22 Aug 2024

The German lender shocked shareholders in April by setting aside 1.3 bln euros for a 14-year-old Postbank M&A case, only to settle with most plaintiffs for half the claimed amount. It’s a case study in the opacity of bank legal risks, which plays into the sector’s value discount.

Europe’s dealmakers begin tough redemption journey

19 Aug 2024

The market share of BNP, Barclays, UBS, SocGen and Deutsche seems to have troughed at around 8% in M&A and 6% in equity underwriting. The days of ever-increasing US dominance may be over. Getting investors to attach more value to these volatile units, though, is the harder job.

Growth is missing piece in UBS valuation puzzle

14 Aug 2024

The $100 bln lender is speeding up its cost cuts and shrinkage of Credit Suisse’s investment bank. But the bits of UBS investors like, such as wealth management and Swiss banking, seem sluggish. Changing that will be key to closing the value gap with rivals like Morgan Stanley.

Cross-border bank deal takes leap of faith

12 Aug 2024

A $2.8 bln investment by Scotiabank helps Ohio-based KeyCorp get out of a capital rut, and at a generous valuation, to boot. For the Canadian lender, the direct benefit of a minority holding in a US peer is less clear. Stake sales of this sort are rare for a reason.

UK financial watchdog’s H2O thwack has a downside

8 Aug 2024

The fund group will repay 250 mln euros after the FCA said it bought esoteric bonds and didn’t declare conflicts. The deal gets money to investors quicker than if a fine had been levied. But, at just a fraction of what some clients are claiming, the settlement risks looking soft.

The Bank of Japan’s flipflopping can backfire

8 Aug 2024

Days after Governor Kazuo Ueda talked up interest rate hikes, his deputy is suddenly playing down the prospect. That may be intentional but it muddies the message to Japanese businesses on the outlook. It also overplays Japan’s role in sparking the global market ructions.

DBS CEO aces succession, sets high bar

8 Aug 2024

Piyush Gupta is leaving the $72 bln bank after 15 years in charge. He put it on the Asian map, logged stellar returns, and ensured a Singapore-style drama-free transition of power. Incoming boss Tan Su Shan is a solid choice to steer DBS through its next trickier growth phase.

China’s mounting bad debts have fewer places to go

7 Aug 2024

StanChart-backed Bohai Bank is selling $4 bln-worth of non-performing assets. It underscores the pressure lenders are under as property-linked loans sour. Yet distressed-asset managers like Cinda are feeling the strain too. Disposing banks' $470 bln bad debt pile will get harder.

BNP’s AXA deal is a logical use of spare cash

2 Aug 2024

The French bank will buy the insurer’s fund unit for 5.1 bln euros, using money from its BancWest sale. It’s a big deal, but the price looks fair. And while BNP Paribas investors may prefer buybacks, a capital-light target makes more sense than a rash swoop on another lender.

HSBC’s growth engine has insufficient horsepower

31 Jul 2024

Wealth revenue is rising at the $167 bln lender, but not necessarily fast enough to offset the hit from falling rates. The key transaction-banking unit, meanwhile, is stagnant. To fix it, new CEO Georges Elhedery will need investors’ patience and a dose of economic good luck.