Banks

Lower rates, office return will ease property pain

7 Mar 2024

The post-pandemic boom in hybrid work is causing trouble for banks that have lent heavily to office developers. But in this Viewsroom podcast, Breakingviews columnists explain how losses may be limited if central banks bring borrowing costs down and bosses call employees back.

A year on, SVB’s killer is still at large

7 Mar 2024

Twelve months after Silicon Valley Bank’s demise, investors worry more about real estate than flighty depositors. The disjointed system that enabled a crisis remains intact, though, with patchy oversight, incomplete safety nets and ambiguity over who loses if a lender fails.

Virgin Money sale is UK challenger banks’ swansong

7 Mar 2024

Nationwide Building Society is paying a high premium for the embattled lender, but accounting gains and the scope to rival giants like Lloyds Banking Group sweeten the $3.7 bln deal. Still, the demise of the most prominent smaller bank suggests the sector is reverting to form.

NYCB revives an old playbook for the new crisis

6 Mar 2024

Trump-era official Steven Mnuchin is leading a $1 bln infusion in the stricken lender, a move reminiscent of his 2009 IndyMac deal. Tapping private investors saves passing NYCB’s woes to another bank; a cheap price squares the math. It may be a template for future stragglers.

Basel climbdown would make the shadows less scary

6 Mar 2024

Tough new rules on bank capital are likely to be watered down. That would be a victory for lenders like JPMorgan that complain they’re already smothered by safeguards. It’s less good for so-called shadow banks like Blackstone and Apollo that stand to grow fat on their castoffs.

If only banks were more like chemical factories

1 Mar 2024

New York Community Bancorp and paint-materials maker Chemours both ousted their CEOs after discovering flawed internal controls. Economic importance and heavy regulation distinguish the two $3 bln companies. One crisis mostly affects shareholders; the other should worry everyone.

Banks’ hot new trade could burn others, for once

29 Feb 2024

So-called synthetic risk transfers offer a Houdini-like way of loosening capital handcuffs. While best suited to the biggest lenders, it could also help smaller rivals burdened by shaky real-estate bets. The danger to banks is minimal; investors need to read the small print.

European bank property buffers rest on two big ifs

28 Feb 2024

Lenders like BNP and ING sit on $1.5 trln of commercial property loans, which look vulnerable to high interest rates. Longer leases give EU players more breathing space than US counterparts. Yet averting a crisis requires a mixture of falling inflation and a revival of offices.

A plot twist threatens Jay Powell’s artful script

27 Feb 2024

Higher borrowing costs are helping achieve the Fed’s 2% inflation target without a recession, but US wages and consumer spending tell a different tale. The upward price pressure augurs elevated interest rates for longer. To ensure a happy ending may require revising the story.

Top JPMorgan banker spots value in Citi rotation

26 Feb 2024

Viswas Raghavan is leaving a senior post at the world’s largest investment bank to lead a broader but smaller business for its rival. If he partly narrows the gap between the two, investors should gain. The 57-year-old might even have a shot at succeeding Citi CEO Jane Fraser.

Wall Street lives libertarian-lite dream in Miami

23 Feb 2024

Financial luminaries have flocked to the city for a Saudi-backed answer to Davos, a sign that Florida’s rise as a financial hub is durable. The Sunshine State gives the wealthy a glimpse of low taxes, entrepreneurialism and small government. It’s freedom, but only for some.

StanChart is a permanent work-in-progress

23 Feb 2024

The Asia-focused bank inched past its 2023 returns target, bagging longtime boss Bill Winters a 22% pay boost. But he's downgrading or postponing his next goals. And the years-long promise to simplify the lender is back. Persuading investors to boost its valuation will be hard.

Capital Calls: Oil M&A

22 Feb 2024

Concise views on global finance: The $11 billion Williston Basin combination of Chord Energy and Enerplus lacks the wow factor of Exxon’s and Chevron’s mega-mergers, but there are sufficient savings to suggest more deals will be on the way.

Bill Winters can afford to be more bold

22 Feb 2024

Standard Chartered's CEO has yet to win over investors despite logging the best equity returns in his nine years in charge. With perhaps just a year or two left atop the $20 bln emerging-markets bank, he has time to reduce its sprawl, cut costs and show his turnaround has legs.

 

HSBC’s yawning discount is too harsh

21 Feb 2024

The $155 bln lender took a big impairment on its stake in China’s BoCom bank. That aside, shareholder returns have been consistently strong and look set to remain so. The successful push into Asia beyond Hong Kong suggests boss Noel Quinn is riding geopolitical waves well, too.

Capital One will struggle to cash in M&A rewards

20 Feb 2024

An $80 bln deal with Discover would create a credit-card giant with a Visa-like payment network and huge cost savings. These perks can only be redeemed by overcoming political foes, regulators and the target’s conduct issues. On balance, it’s wise to buy now, and maybe pay later.

Barclays only partly fixes investment bank problem

20 Feb 2024

The $30 bln UK lender will keep the size of its trading and advisory arm stable by 2026, while growing other businesses. That’s logical. But Barclays still needs that growth to materialise, and even then shareholders may see the newly downsized investment bank as too big.

Kotak’s boardroom rejig hints at succession pain

20 Feb 2024

Four months after Asia’s richest banker Uday Kotak anointed an ex-Citi veteran and outsider to take over his $41 bln bank, the new boss is ceding part of his role to a snubbed insider. It’s a messy, indecisive and reactive development at India’s most richly valued big bank.

NatWest share sale starts life on shaky ground

16 Feb 2024

The $24 bln lender’s pre-tax profit rose 20% in 2023 due to higher borrowing costs. But the boom will be brief as the prospect of falling rates and a weak economy will hit returns. That’s a tough sell for the government as it readies to offer its holding to the British public.

Banks win hollow victory over would-be disrupters

16 Feb 2024

Supermarket giant Tesco’s ditched effort to build a UK retail bank follows similar abortive attempts by telecom groups and fintech startups. Regulation and rising technology costs are partly to blame. But banks’ persistent poor returns are the most effective barrier to entry.