Banks

Corporate bond rally sputters

24 Oct 2003

Ford s troubles, an interest rate scare and a wobbly stock market have shone a spotlight on rich valuations in corporate bonds. The market now faces a test. Investors may be tempted to take profits but they will struggle to pick up yield elsewhere.

JP Morgan Q3 leaves 2002 figures in the dust

22 Oct 2003

But the picture is still mixed when more demanding comparatives are used. Its strategy of beefing up feeearning businesses is still a workinprogress.

Egg refuses to throw in the towel in France

22 Oct 2003

The UK bank is looking for a partner to stump up extra investment in its lossmaking French business. But closure has probably just been deferred. In the meantime, Egg shareholders are footing the bill for management s show of defiance.

Citigroup heralds better banking bonuses

20 Oct 2003

In the latest sign of a return to better times, Citigroup is letting the belt out on compensation. This may be reasonable. Increases in Citi's other businesses came from a more benign credit cycle. What s not clear is who will benefit most, though judging by results, more traders than bankers will walk home with new Maseratis. In the latest sign of a return to better times, Citigroup is letting the belt out on compensation in its securities business.

WestLB names Thomas Fischer as new CEO

17 Oct 2003

This isn t just good news for the landesbank, it may be good news for the whole German banking system. Fischer has the prestige to restructure WestLB. And where it leads, other landesbanks may follow.

Scrooge O’Neal turns into Santa Claus

16 Oct 2003

Even Merrill Lynch s high priest of belttightening is talking about letting out a notch or two. Whether or not this calls the bottom, it is good news for Merrill bankers.

FoF Michael Dell coins new TLA in NFW

14 Oct 2003

Are you down with Wall Street s latest ThreeLetter Acronym courtesy of Friend of Frank Quattrone Michael Dell? If not read on. Like Blodget s POS it highlights the way the financial industry became subservient to its clients in the 1990s.

Basel Committee tries to hold the line on timetable

13 Oct 2003

Having failed to win consensus on the draft accord, it has agreed to reopen a few contentious issues. The gamble is that this will be enough to win the day.

Rumours swirl about cross-border bank M&A

13 Oct 2003

The latest idea du jour is that Britain s Barclays may be snapped up by an American bank. Banks certainly seem more interested in deals. But it may be jumping the gun to expect a crossborder move.

Rhodia teaches bondholders a lesson

10 Oct 2003

Don t buy junk bonds from struggling companies that have not changed their strategy or management. The French chemicals group s new changes are too late to save bondholders from a bruising at the hands of banks.

Atlantico stake sale may prod Spanish bank tie-ups

10 Oct 2003

After years of dithering, Atlantico s biggest investor has said it s willing to sell its entire 68% stake. It must hope that Barclays recent move into Spain will add competitive tension to any Atlantico bid. But that s not a certainty.

RBS buys HVB’s private bank for E320m

9 Oct 2003

The Scottish bank s acquisitionled strategy has collided with its German counterpart s disposalled strategy. It is RBS s second small deal in a week. A series of middling deals may be safer than the giant US expansion investors have been expecting.

Barclays reshuffle may be risky

9 Oct 2003

The changes are much as expected: Matt Barrett becomes chairman and John Varley succeeds him. This looks a safe choice but it may not be.

Antonveneta M&A speculation looks overdone

9 Oct 2003

To be sure, the E3.5bn Paduabased bank is one of the looser pieces in the Italian bank consolidation puzzle. But it is hard to see its shareholders agreeing on a sale right now. And if they don t, the bank looks pretty richly valued.

Corporate bonds look vulnerable

7 Oct 2003

A stronger euro, a more volatile stock market and mixed news on the economy don't bode well for credit spreads. With valuations looking a little stretched, bond traders may be tempted before long to lock in their gains for the year.

The M&A fee squeeze continues

6 Oct 2003

One reason the screw is turning is that there is still too much capacity about. Unless the market recovers, pay or capacity will have to shrink.

HVB Real Estate lowly valued at spin-off

6 Oct 2003

So why does Commerzbank still value its mortgage bank business at a fat premium to book? It is valued at 40% of book, while its biggest quoted rival is valued at 60% of book.

RBS pays E890m for First Active

6 Oct 2003

The UK bank seems to have got a decent price for the mortgage bank although the deal is more about driving revenues than cutting costs. Peers in First Active's Irish heartland might theoretically be able to pay more but they would probably be blocked by antitrust authorities.

BNL rides restructuring wave at Italian banks

2 Oct 2003

The share price of the midsized Italian bank has almost doubled this year, much like that of its fellow Roman bank, Capitalia. That is partly because operations are improving. But it is also partly because of stakebuilding by investors in both banks.

Bondholders do worse than banks in defaults

1 Oct 2003

The discrepancy is wider in Europe than the US. But one cannot draw the conclusion that European banks are doing better than their US peers. Recovery rates on defaulted bank loans are higher in the US. This reflects European firms relying on bank debt more than bonds.