Banks

SocGen avoids the worst in costly Russian exit

11 Apr 2022

The French bank is selling Rosbank back to the oligarch it bought the unit from 16 years ago. Despite a 3 bln euro writeoff, the hit to its capital ratio is less than half the worst-case scenario it outlined last month. It’s a fitting end to a long and unhappy Russian story.

Ex-Goldman conviction is partial justice for 1MDB

8 Apr 2022

A U.S. jury found Roger Ng guilty of corruption linked to the Malaysian fund. His ex-boss who helped organize the scheme may get a lesser penalty for cooperating with prosecutors; the Wall Street firm got off with a $5 bln fine. It’s an imperfect deterrent for future miscreants.

Capital Calls: Credit Agricole’s Italian job

8 Apr 2022

Concise views on global finance: The French lender buys a 9% stake in Italy’s Banco BPM, making it harder for local rivals to launch a bid.

Fed’s 5-year balance sheet plan may be interrupted

7 Apr 2022

The U.S. central bank aims to reduce its $9 trln of assets by $95 bln a month. At that pace, even already fat pre-pandemic levels might not be reached until early 2027. That's a long time in economics, and in politics. Like the last attempt to slim down, it risks being thwarted.

Russia takes big step towards default

7 Apr 2022

Russia will pay foreign bondholders roubles instead of dollars. A default looks likely after a 30-day grace period. Many investors, stuck with a currency they can’t use and facing an uncertain legal battle for any recovery, may prefer to take losses today and sell.

Inflation regime shift looks scarily plausible

6 Apr 2022

Fed boss Jay Powell and other global rate-setters admit surging prices warrant policy action. Where they disagree is how forcefully they need to combat such pressures. The BIS, the umbrella body for central banks, says a new inflationary era may lie ahead. Its case is persuasive.

Bank bidders solve tricky German M&A puzzle

5 Apr 2022

Advent and Centerbridge revived their $2 bln Aareal deal by offering a 12% bump and letting rebel shareholders stay invested. It should work, defying the trend of failed German takeovers. The lesson is that debt-free deals with a flexible buyer stand the best chance of success.

India’s $168 bln bank merger bets the house

4 Apr 2022

HDFC Bank’s plan to buy its mortgage-lender parent at a tiny discount sparked a 10% rally in shares of both. New capital rules enable the long-speculated union. Benefits range from lower funding costs to resolving CEO succession. Preparing for a home-loan boom is the main goal.

Capital Calls: U.S. truck drivers go missing

4 Apr 2022

Concise views on global finance: Bonuses and concessions from Washington aren't enough to fill the industry's empty cabs.

Private equity can pull away from Wall Street

1 Apr 2022

Sponsors like Thoma Bravo are perfecting a playbook that demotes banks by tapping direct lenders for financing and sourcing transactions directly, bypassing auctions. Banks make a chunk of their annual fees from the buyout business. This threatens that pot.

Citi exit tests Indian banks’ pulling power

31 Mar 2022

The Wall Street firm, the biggest foreign brand to leave the market, can be happy selling its subscale retail business for $1.6 bln. It’s a fair price for local buyer Axis, too – if it can retain the higher-spending affluent clients who liked the appeal of an overseas bank.

Capital Calls: Chip supply chain bites own tail

31 Mar 2022

Concise views on global finance: Semiconductor factories rely on machines made by ASM International. Paradoxically, the firm is having trouble finding the chips it needs. Untangling the mess will take a while.

Generali investors better off with devil they know

30 Mar 2022

A rebel billionaire is vying for control of the 190-year-old insurer, a linchpin of Italian finance. Francesco Caltagirone promises higher returns and bolder M&A than under CEO Philippe Donnet. Fuzzy targets and slowing growth should make shareholders wary of switching horses.

Bank of Japan stumbles into defensive minefield

29 Mar 2022

War, Covid-19 and an aggressive-looking Fed are conspiring against Governor Kuroda’s ultra-loose policy. The yen is plunging and government bond yields are up despite BOJ efforts. There’s no easy solution, but doing nothing is risky too.

Capital Calls: Singapore gets D.C. top treatment

29 Mar 2022

Concise views on global finance: A grateful President Biden is hosting the city-state’s prime minister, who backed sanctions against Russia in rare move.

Markets may do Powell’s job for him

24 Mar 2022

The U.S. central bank chair is speaking aggressively about rate hikes. The Eurodollar yield curve implies it will lead to swift increases that will then be cut. Investors and companies respond to expectations by trimming spending and investing. That makes the Fed’s task easier.

Russians lose private banks’ golden goose status

21 Mar 2022

Spooked by sanctions, wealth managers are treating all Russian clients as suspicious. That limits the scope to offer lucrative loans or new products to customers who have $213 bln stashed in Swiss banks. Higher compliance costs will turn them from cash cows to financial baggage.

Capital Calls: Tencent, Ted Baker

18 Mar 2022

Concise views on global finance: The Chinese web giant may have to separate its mobile payments business from its popular social media arm; U.S. buyout fund Sycamore can afford to be generous towards the hard-pressed UK fashion group’s shareholders.

UK is in monetary policy vanguard for new reason

17 Mar 2022

The Bank of England raised rates for a third meeting running. Governor Andrew Bailey started tightening policy sooner than peers at the Fed and ECB, but is now toning down his talk about future hikes because of growth worries. Where he leads, others may once again follow.

M&A bankers, like cockroaches, survive everything

17 Mar 2022

Two years ago, top consiglieri convened in New Orleans days before global lockdown. The pandemic in the end didn’t dent business. This week’s convention, the first in person since then, comes with the backdrop of war in Europe. Bankers still have ways to keep the deals coming.