Banks

Capital Calls: DraftKings, Shake Shack, Fanatics

18 Feb 2022

Concise views on global finance: The online gambling firm predicts fast growth but heavy losses; the U.S. burger chain had disappointing earnings yet its valuation is sky-high; the sports merchandiser teams up with Jay-Z to buy a streetwear firm for a song.

Goldman Sachs ups ante in banking game of thrones

17 Feb 2022

CEO David Solomon boosted his main shareholder return target. If the market gives the Wall Street firm credit, it might narrow a valuation gap with chief rival Morgan Stanley. But both are counting on the rift between haves and have-nots, on Wall Street and beyond, growing wider.

StanChart’s modest targets risk becoming a mirage

17 Feb 2022

CEO Bill Winters is aiming for a 10% return on equity by 2024, having failed to hit the same goal in his first seven years in charge. Rate hikes will help this time, but the plan hinges on aggressive growth hopes. Winters may have to consider more radical cost cuts and disposals.

Aussie climate M&A deal offers best of both worlds

16 Feb 2022

ANZ is taking a small stake in climate-change advisory and investing startup Pollination for $50 mln. The bank gets business acumen in a hot sector and its partner can offer clients access to a big balance sheet. The price reflects the scarcity value of green talent.

China prices are cold comfort for global shoppers

16 Feb 2022

Factory-gate prices softened, and consumer inflation rose just 0.9% as supply shortages eased. Domestic stimulus might not change much. That’s good news for overseas customers grappling with soaring costs. But a weak Chinese economy will have less desirable knock-on effects.

Citi’s Jane Fraser embodies Wall Street’s pay gap

15 Feb 2022

The new CEO’s $22.5 mln package lags jumbo sums awarded to JPMorgan’s Jamie Dimon and Goldman Sachs’ David Solomon. Citi hasn’t been a great investment. But overemphasizing past returns could leave Citi the worst of both worlds: A troubled bank with a boss in need of motivation.

Busted bank cartel case leaves pieces to pick up

11 Feb 2022

Australian prosecutors dropped criminal charges against Citi and Deutsche Bank over a 2015 share sale for lender ANZ. The lawsuit smacked of overreach and was dragging on too long. It also bared unsavoury investment-banking practices. There are lessons to learn for all involved.

Credit Suisse self-flagellation is risky but right

10 Feb 2022

The Swiss bank lagged rivals as revenue fell 12% in the fourth quarter. That’s partly because CEO Thomas Gottstein is putting safety first. The danger is that clients flee and star bankers defect after bonuses shrank by 32%. Yet avoiding future mistakes is the top priority.

Mediobanca’s fortunes are tied to Generali

9 Feb 2022

The bank’s 13% stake in the Italian insurer accounts for a third of its net profit. Mediobanca could sell the 3.8 bln euro shareholding to finance deals, but targets are expensive. Even if CEO Alberto Nagel loses a boardroom battle at Generali, his financial future rests on it.

Amundi’s mini-BlackRock status comes with a catch

9 Feb 2022

The French fund powerhouse now has 2 trln euros of assets, and is in fast-growing areas like passives and ESG. Yet Amundi’s strength in selling funds partly relies on its bank partners’ loyalty, which might change. That weakness helps explain a less-than-stellar stock price.

Aussie lenders offer risky bet on rising rates

9 Feb 2022

The big four, including Commonwealth and ANZ, rely more on interest income than U.S. peers, so should benefit when central banks tighten. But a rate hike Down Under might be slower than expected, while fixed-rate loans and rivalry for deposits and borrowers will eat into gains.

BNP Paribas’ growth push merits investor jitters

8 Feb 2022

The 81 bln euro bank wants to boost revenue to help hit an 11% return target. But CEO Jean-Laurent Bonnafé’s plan hinges on uncertain investments and buoyant markets, while a cut-price valuation betrays shareholder doubts. Deeper cost cuts would make his goals more credible.

Capital Calls: Continental, Harley-Davidson

8 Feb 2022

Concise views on global finance: German car-parts maker Continental may spin off its self-driving unit, while the iconic maker of motorbikes has turned supply shortages to its own advantage.

Macquarie boss channels Goldman’s Gus Levy

8 Feb 2022

Alongside a “record” quarter, Shemara Wikramanayake touts her $53 bln bank’s “cautious” approach. At the same time, she is aggressively positioning it for the energy transition, evoking the former Wall Street CEO’s long-term greedy mantra. Volatility demands resolve and balance.

Italy’s top banks raise stakes in shareholder duel

4 Feb 2022

Intesa Sanpaolo CEO Carlo Messina pledged to lift the lender’s return on tangible equity to 14% by 2025, topping a bold target set by new UniCredit boss Andrea Orcel. Intesa starts from a strong base but lacks M&A options. Rising interest rates could give both an extra boost.

Lazard bets it can continue to be different

3 Feb 2022

The advisory firm’s shares have underperformed Wall Street peers recently and through past cycles. It has still found ways to attract and retain talent. Yet competition for rainmakers is mounting. If stock appreciation isn’t a lure, Ken Jacobs’ firm may have to pay in other ways.

Big Oil elbows out banks as Fed’s new kingmaker

3 Feb 2022

The energy sector has come out swinging against Sarah Bloom Raskin, President Biden’s pick to lead supervision at the U.S. central bank. The ex-Fed governor is outspoken on climate risks. The business lobby could frustrate her confirmation, even with Democrats in Senate control.

The Exchange: UniCredit’s Andrea Orcel

3 Feb 2022

The Italian banker wants to return 16 bln euros to investors by 2024. Choppy markets and growing geopolitical risks raise the bar for European banks’ promised returns. UniCredit CEO Andrea Orcel tells Breakingviews how his $35 bln lender can navigate through uncertain times.

Capital Calls: Julius Baer, Siltronic

2 Feb 2022

Concise views on global finance: A slip in the Swiss wealth manager’s shares is an incentive for M&A sooner rather than later; strong results suggest the German wafer maker can expand despite Berlin’s failure to approve a 4.4 bln euro takeover by Taiwan’s GlobalWafers.

Santander’s U.S. clinginess has a share price cost

2 Feb 2022

The 55 bln euro bank is keeping its American unit, unlike rivals BBVA and BNP. Full-year results show Chair Ana Botín is running it well, and she has plans to keep it growing. But investors give her scant credit. If that persists, the pressure to sell will become overwhelming.