Banks

Gulf bank’s growth push takes wrong turn in Turkey

21 May 2024

After briefly pursuing StanChart last year, First Abu Dhabi Bank may now pay $8 bln for 61% of Istanbul-based Yapi Kredi, Reuters reported. Deepening Turkish-UAE trade links offer a thin rationale. A high price, volatile lira and lack of cost savings make the deal a bad idea.

Ping An wrestles with its HSBC dilemma

17 May 2024

The bank's top owner may reduce its 8% stake a year after its breakup bid failed. It's a fair move given the recent bumper returns and looming succession and growth issues. But HSBC's dividends and arguable undervaluation suggest Ping An won't trim its outsized holding too much.

Private credit wonder drug works in limited dose

17 May 2024

The quantity of loans channelled directly to companies by funds has exploded to more than $2 trln. The economic benefits of diversified lending just about make up for the risks. The challenge is making sure financial innovation does not starve banks to death.

Bank treasurers hold keys to an investor mystery

15 May 2024

Executives who manage lenders’ exposure to interest-rate swings are more important than ever. But it’s tough for shareholders to pick their way through the complex hedging programmes of $570 bln JPMorgan and its peers, adding volatility to their share prices.

HSBC’s big pair of shoes will be hard to fill

9 May 2024

The surprise departure of boss Noel Quinn, who dramatically reshaped the firm, puts the globe-straddling bank on the spot: appoint a steward of its strategy from within, or a new thinker from outside? In this Viewsroom podcast, Breakingviews columnists debate the $170 bln choice.

BBVA’s hostile $13 bln M&A bet faces long odds

9 May 2024

Chair Carlos Torres Vila is going ahead with his all-share offer for Sabadell despite a rebuff from the smaller Spanish bank’s board. Yet Madrid firmly opposes a deal, and BBVA’s sliding stock is denting the bid’s appeal. Success seems unlikely.

Spanish minnow upsets EU bank bosses’ M&A dreams

7 May 2024

Sabadell rejected BBVA’s 12 bln euro proposal, citing its strong standalone prospects. If the boards of other small lenders feel the same, it’s hard to see more deals. That’s a shame, particularly since UBS’s rescue of Credit Suisse is demonstrating the value of consolidation.

China banks’ $900 bln buffer offers sham comfort

7 May 2024

That’s roughly how much special debt the country’s five largest lenders must raise to obey global rules for absorbing large-scale losses. It’s an improbable scenario in China’s state-controlled financial system. For the banks, extra funding costs add to a long list of headaches.

HSBC’s ideal new boss probably doesn’t exist

6 May 2024

CEO Noel Quinn’s replacement should be familiar with the $167 bln group, have experience of Western and Asian markets, understand wholesale banking, and be available. None of the potential candidates score full marks. Chair Mark Tucker may have to compromise to fill the vacancy.

UK watchdog name-and-shame plan is worth the risk

3 May 2024

City leaders hate a Financial Conduct Authority proposal to reveal the identity of firms it probes. In theory, it could taint a company that later gets cleared. But the FCA’s cautious track record offers comfort, and it needs tools to cut a 41-month average investigation period.

Macquarie bets its disappointing year is a blip

3 May 2024

The $47 bln investment bank handed investors their worst return on equity in more than a decade as earnings fell by a third. Yet it kept pay and other expenses flat. Previous years' impressive results give CEO Shemara Wikramanayake some breathing room before having to cut costs.

M&A-shy EU bank investors are own worst enemy

2 May 2024

BBVA’s shares fell 8% over three days after it pitched an all-share acquisition of $10 bln Spanish rival Sabadell. But the returns look good, and the combined group’s capital ratio will remain high. If investors sink this deal, other CEOs in the fragmented sector may think twice.

EU bank holdouts are playing with fire in Russia

1 May 2024

Two years after the invasion of Ukraine, lenders Raiffeisen and UniCredit still have sizable businesses based in Moscow. Fearing lack of scrutiny in a sanctions-hit nation, the ECB is ratcheting up pressure to leave. A costly exit looks suddenly preferable to penalties.

Overdue $80 bln Spain bank merger has new hurdles

30 Apr 2024

BBVA broached an all-share deal with $10 bln Sabadell. The smaller lender’s valuation has improved since the same merger was discussed in 2020, which could make it easier for the board to agree a sale. Yet it also makes the sums harder for the buyer, whose investors are spooked.

CEO departure puts HSBC at risk of strategy drift

30 Apr 2024

Noel Quinn is retiring from the $164 bln bank after less than five years in charge. If Chair Mark Tucker picks an internal replacement the new broom risks looking like a second choice. Appointing an outsider could leave HSBC without clear medium-term targets for a year or longer.

Republic First is the good kind of bank failure

29 Apr 2024

The shuttered lender was low on equity and high on drama, home to years of lawsuits and board fights. Even with familiar balance-sheet issues, there’s little risk of knock-on effects elsewhere. Bank windups are working - though judging by placid depositors, maybe a bit too well.

Vote no to bashing proxy advisers

25 Apr 2024

Corporate leaders at JPMorgan and AstraZeneca bridle when ISS and Glass Lewis criticize their governance. No wonder: Some high-stakes shareholder votes this year will be uncomfortable for feather-bedded bosses. Proxy firms are problematic, but they do more good than harm.

European banks have little to lose from rate cuts

25 Apr 2024

Tighter monetary policy boosted revenue at BNP Paribas, Deutsche and Barclays, who now face ECB and BoE loosening. Markets expect some 50 basis points of rate cuts, but that shouldn’t hurt bank income much. Deposits may get cheaper, while old loans keep rolling onto higher rates.

EU Fannie Mae idea is bad answer to good question

25 Apr 2024

A report led by former French central banker Christian Noyer advocates more securitisation to help fund $1 trln of annual green and digital investments. He’s right that bank balance sheets need unclogging. But subsidising the slicing and dicing of mortgages isn’t worth the risk.

Kotak’s IT slap-down points to a system weakness

25 Apr 2024

Shares of the $44 bln bank fell 13% after the regulator barred it from acquiring new customers online following tech failures. Kotak's rich valuation is slipping away. Targeting growth is a smart punishment but the RBI may need to be tougher. Digital weakness appears widespread.