Banks

HSBC breakup push requires delicate brushoff

1 May 2022

Chinese insurer Ping An wants the $125 bln bank to spin off its Asian arm. Overall performance has been disappointing, but a messy and costly split could negate any valuation uplift. The challenge for Chair Mark Tucker is to politely tell his biggest investor that it’s wrong.

Italy’s financial order repels attack on Generali

29 Apr 2022

Mediobanca-backed CEO Philippe Donnet overcame opposition from investors with 30% of the $30 bln insurer to win a third term. That preserves a key financial link with the merchant bank. Donnet now has to deliver on his growth plan. The rebel investors will keep him on his toes.

UK grocer buyout creates bond market indigestion

29 Apr 2022

Banks led by Goldman and BNP Paribas that funded CD&R’s $9 bln Morrisons buyout have sold a chunk of the debt at a big discount. Inflation and a supermarket price war mean bondholders can now name their price. The debt hangover may make other deals trickier.

Elon Musk’s Twitter funds, Netflix with ads

28 Apr 2022

Tesla’s boss is close to clinching control of the social network, having secured financing from Wall Street. Breakingviews columnists discuss why the bet makes sense for banks in this Viewsroom podcast. Also, the streaming service’s subscriber pain may lead to bountiful change.

Capital Calls: U.S. GDP fall masks solid economy

28 Apr 2022

Concise views on global finance: Consumer spending and business investment are resilient amid price hikes.

Deutsche can leave Credit Suisse in the dust

27 Apr 2022

Europe’s erstwhile bank basket case is now valued by investors on the same multiple of book value as the Swiss wealth manager. Rate hikes and a debt-trading boom will play to its strengths. Meanwhile, Credit Suisse’s weak capital ratio and slow growth will keep its shares gloomy.

Capital Calls: GM electrifies executives’ pay

27 Apr 2022

Concise views on global finance: The Detroit automaker’s move to tie boss Mary Barra’s pay to electric vehicles goals is a new spin on pledges to shift away from combustion-engine cars.

Nomura’s malaise comes with dark silver lining

26 Apr 2022

More losses on old mistakes helped drag return on equity down to a dismal 4.3% in the last quarter. But they look almost over, the investment bank is holding up, and shares are outperforming fellow Archegos victim Credit Suisse. Retail pain shows there’s much work ahead.

HSBC delegates shareholder value quest to the Fed

26 Apr 2022

The Asia-focused lender’s first-quarter pre-tax profit slid 27%. Pandemic curbs in Hong Kong and China aren’t helping. The bank still reckons it will hit next year’s returns target, but that’s less about its actions and far more about the U.S. central bank and peers raising rates.

Asia wealth slump renders bank hype a little rich

26 Apr 2022

UBS’s pre-tax profit from private banking in the region slumped 38% in the first quarter. Lockdown pains should ease eventually, but China’s “common prosperity” agenda may undermine the highly touted opportunity. Hiring blitzes by Citi, HSBC and others could be hard to justify.

What is Morgan Stanley smoking in Twitter LBO?

25 Apr 2022

The bank is leading a $13 bln debt package for Elon Musk’s buyout and lending $12.5 bln against his Tesla stock. Interest will eat up the social network’s cash flow and Musk may undermine its revenue. A good relationship with the world’s richest man may justify the risk, though.

Banks enter AGM season wearing green bullseyes

25 Apr 2022

Top U.S. lenders and some European rivals face votes on their climate policies at looming annual general meetings. Banks may resist greening their loan books if that hits earnings. But even if they clear the immediate hurdle, the heat will be on to clarify their net-zero plans.

Capital Calls: Britain’s beefed-up M&A watchdog

25 Apr 2022

Concise views on global finance: The activist building its stake in video-ratings firm Nielsen may face a potential snag, thanks to the UK’s answer to U.S. cross-border merger cop CFIUS.

Russia risk is ghost of banks’ sanctions future

22 Apr 2022

In the hunt for oligarchs and blacklisted firms, U.S. authorities are treating lenders as allies rather than adversaries. Prospective prosecutors may take a different view. Banks with past legal troubles might prefer to shun Russian business. Still, there are lots of grey areas.

European banks’ buyback boom faces bad-debt risks

22 Apr 2022

After two lean years, investors had hoped 2022 would bring bumper payouts from Barclays, BNP Paribas, and other big lenders. But the Ukraine war raises the chances of a recession. Rebuilding default buffers, which are slimmer than before the pandemic, may now be the priority.

How metals markets can limit future debacles

19 Apr 2022

UK regulators want answers after the London Metal Exchange voided nickel trades. A supply crunch in a wider range of metals means Europe’s key market can expect more crises. Regaining trust may require new leaders, but the LME can at least reduce the impact of future shocks.

Bank of America deserves its moment in the sun

18 Apr 2022

The second-largest U.S. lender took less of a hit than its peers amid a rough first quarter. With interest rates rising, investment banking on the wane and its house in order, BofA is in a sweet spot, even relative to JPMorgan. Boss Brian Moynihan can enjoy it while it lasts.

Goldman can close valuation gap on Morgan Stanley

14 Apr 2022

The bank run by David Solomon is worth 40% less than James Gorman’s group, based on multiples of tangible book value. Before the pandemic the discount was 20%. Morgan Stanley’s earnings are steadier, but its rating is rich. If Goldman keeps a lid on costs, the divide will narrow.

JPMorgan rolls with early 2022 punches

13 Apr 2022

The giant lender took hits from a slump in financial-market activity and Russia’s invasion of Ukraine, reporting a 42% dive in quarterly profit. Wall Street peers are likely to sport similar bruises. But a strong U.S. economy and rising interest rates will soften the blows.

EU bank dumpster divers still have rich pickings

12 Apr 2022

A big investor, probably Capital Group, sold 1.8 bln euros of Deutsche Bank and Commerzbank shares. Betting on the basket cases has worked well since 2020. France’s SocGen and Italy’s UniCredit may offer similar rewards now, though shareholders may have to work a little harder.