Banks

Financiers may pave U.S. campaign trail with gold

27 May 2022

With ex-Bridgewater boss David McCormick questing for a Senate seat, more Wall Streeters could try their hand at politics. Wealth built in bull-market times can give even novices a lift. And from Ken Griffin to Jamie Dimon, there’s no shortage of finance bosses with strong views.

HSBC’s jarring ESG message, Davos in spring

26 May 2022

The bank’s head of responsible investing believes policymakers are exaggerating the financial risks of climate change. In this Viewsroom podcast, Breakingviews columnists discuss the ramifications of those remarks. Plus: The World Economic Forum is back, but the mood is dour.

BoE pours cold water on bank global-warming panic

24 May 2022

The watchdog’s stress test showed UK lenders can weather a chaotic climate switch without a capital hit. For bank CEOs copping flak for funding polluters, it’s a let-off. The other lesson is that governments will get little help from financial regulators in greening the economy.

Debt-market chaos makes bank deposits great again

24 May 2022

Rising rates and volatility are a problem for fintech upstarts, like Affirm, which rely on wholesale markets to fund loans. Old-school lenders, flush with cheaper deposits, don’t face the same funding pressure. It gives banks a window to strike back.

JPMorgan and its customers deserve more credit

23 May 2022

The U.S. lender may hit a profit target it thought it might miss, partly because households remain flush. That matters, because souping up the consumer bank is one reason for the lender’s big investment plans. The idea that Americans are holding up should help rivals too.

How to stop margin calls from blowing up markets

23 May 2022

After 2008, regulators pushed derivative trades away from banks and onto clearing houses with the power to request collateral. That cut the risk of blowups, but liquidity is still scarce during panics. The fix is to boost margin during good times, reducing the need for big calls.

HSBC’s green loose cannon misfires at a bad time

23 May 2022

The $123 bln bank has distanced itself from a senior executive who said investors needn’t fear climate risk. His message jars. The energy crisis gives lenders cover to go slow on restrictive net-zero goals, but stakeholders may demur if they fear this is what they really think.

Wanted: Chillaxed CEO for $21 bln French laggard

18 May 2022

Frédéric Oudéa will depart from SocGen after 15 years at the helm. He leaves a bloated bank with one of the lowest valuations in Europe and an unclear appetite for change. Breakingviews imagines a letter from a headhunter specialising in cushy job placements.

Being Jamie Dimon just became less fun

17 May 2022

Over two-thirds of JPMorgan investors rejected the CEO’s pay package, the worst rebuke at a big U.S. bank in a decade. That won’t hit Dimon in the wallet, and there’s no sign shareholders want him gone. But his bully pulpit, like his bank, is smaller than it was a year ago.

Unlimited vacation is a classic Goldman trade

17 May 2022

Goldman’s offer of unchecked time off for senior partners, and more vacation days for the rest, has some sincere aspects. But employees will still have strong incentives to work as hard as possible, and harder. As a rule, Goldman rarely ends up on the wrong end of a transaction.

Polish mortgage holiday is bad idea with allure

17 May 2022

Warsaw wants to protect citizens from surging inflation and interest rates by offering breaks on home loan repayments. That would cost the country’s banks up to $3.6 bln. Forcing lenders to bear the effects of Russia’s war is crude and distortive, but may also win votes.

Japan bank agitator set to prove a sad point

6 May 2022

UK hedge fund Silchester wants $3 bln Bank of Kyoto and three peers to pay higher dividends using income from absurdly outsized equity stakes. It would sensibly deploy cash and put a spotlight on weak lending activities. Alas, being right in Japan is less than half the battle.

Macquarie accelerates into the market’s blind spot

6 May 2022

Despite a sparkling set of results, the financial conglomerate’s stock fell 7% after it warned that commodities and investment gains would be hard to repeat. Even the sensible long game boss Shemara Wikramanayake is playing makes trading at 3.2 times book value hard to justify.

HSBC breakup, Big Oil’s surprise restraint

5 May 2022

The $129 bln bank is under pressure from its largest shareholder to spin off its Asian unit. In this Viewsroom podcast, Breakingviews columnists discuss why the plan deserves short shrift. Also, the decision by oil giants to limit production will win few friends.

European banks mount fragile trading fightback

5 May 2022

The markets divisions of Deutsche Bank, BNP and Barclays are outpacing U.S. rivals, reversing a decade of plunging market share. Yet sustaining that growth will be hard, and shareholders clearly dislike the business. It may be a blip on a long-term trend of American dominance.

Capital Calls: AB InBev

5 May 2022

Concise views on global finance: Anheuser-Busch InBev’s revenue grew 11% in the first quarter compared to last year, but rising prices are a particular headache for the debt-laden brewer.

Fed jumps into field of financial land mines

4 May 2022

The American central bank has little choice but to hike interest rates and cut its balance sheet to fight inflation. But Chair Jay Powell’s moves make the $24 trln U.S. Treasury market more vulnerable to shocks. Bigger future increases could even tip the U.S. into recession.

Goldman’s financial alchemy extends to crypto too

4 May 2022

The U.S. bank made a bitcoin-backed loan to $27 bln Coinbase. Regulatory suspicion of cryptocurrency means a third party will hold Goldman’s collateral, which the latter won’t touch. If it avoids censure, the loan’s lucrative nature means the rest of Wall Street could pile in.

Australia’s ANZ spoils interest rate party

4 May 2022

Boss Shayne Elliott is downplaying the benefits of central bank action at his $770 bln lender and ditching cost targets because of inflation. It’s a sober message compared to peers like HSBC counting on hikes for a boost. Erring on the side of caution is a better approach.

Russian nickel king laughs all the way to the bank

3 May 2022

Vladimir Potanin has snapped up his third financial asset since the war began. The Norilsk Nickel CEO has so far evaded U.S. sanctions despite links to President Putin. Dozens of Russian billionaires are in similar boats, poised to make out like bandits from the Western exodus.