Banks

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.

Capital Calls: L’Oréal

9 Feb 2024

Concise views on global finance: The French cosmetics giant suffered from the same China pain as Shiseido and Estée Lauder, but it is coping better than its Japanese and US rivals.

NY bank’s slide exposes regulatory booby trap

7 Feb 2024

A credit-rating downgrade adds to the misery of investors in $3 bln New York Community Bancorp, whose shares have more than halved in a month. A plan to rebuild its balance sheet will take many months. Watchdogs, who can’t afford for fear to take root, face a different timeline.

Investors are yet to fully embrace UBS’s promise

6 Feb 2024

The $93 bln Swiss bank is restarting dividends and share buybacks after delivering 30% of total planned cost savings from the Credit Suisse merger in 2023. Yet investors don’t seem fully convinced it will hit its returns targets. Speeding up the integration this year would help.

China’s bad banks rejig can serve a bigger purpose

6 Feb 2024

Sovereign fund CIC may subsume three of the country’s big four bad-debt managers, per a now-deleted state news agency report. It may seem like more piecemeal policy. But similar moves between 1998 and 2003 to clean up toxic loans helped beat deflation and invigorate the economy.

Capital Calls: Beijing’s anti-corruption drive

6 Feb 2024

Concise views on global finance: President Xi Jinping’s crackdown on the country’s financial sector threatens to derail efforts to boost confidence in the world’s second largest economy.

Capital Calls: Estée Lauder, European banks

5 Feb 2024

Concise views on global finance: The cosmetics giant behind Le Labo is cutting jobs and redoubling restructuring efforts, but the changes only go skin-deep; Santander and Lloyds are under pressure after a report they banked entities controlled by a US-sanctioned Iranian company.

UniCredit has ways to keep defying gravity

5 Feb 2024

The 50 bln euro bank pledged to match record 2023 net profit this year, and to keep showering investors with cash. CEO Andrea Orcel can use lower costs to offset higher loan losses and costlier deposits. If he can do so, and avoid flashy deals, his valuation can rise further.

JPMorgan succession is a high-stakes soap opera

1 Feb 2024

The US’s largest bank shuffled its business leaders, sparking speculation as to who might eventually take over from boss Jamie Dimon. In this Viewsroom podcast, Breakingviews columnists explain why it matters, even if Dimon’s eventual successor is unlikely to fill his shoes.

Deutsche Bank and BNP try on each other’s clothes

1 Feb 2024

The $27 bln lender is less highly valued than its $72 bln French peer and its recent past is more troubled. But Deutsche just upped its outlook, while BNP’s got worse. Neither are investor stars, but the German bank’s ambitions for its investment bank look easier to realise.

Julius Baer pops myth of private bank prudence

1 Feb 2024

CEO Philipp Rickenbacher is leaving the $12 bln Swiss wealth manager after bad lending led to a $700 mln writedown. It’s a reminder that serving rich clients is not risk-free. Money managers will have to provide more clarity on loan books or give up lucrative but dicey practices.

Nomura offers tantalising glimpse at mediocrity

1 Feb 2024

Japan’s vibrant market helped the investment bank churn out quarterly earnings in line with its 2025 target. Boss Kentaro Okuda’s job now is not just to sustain the performance but to improve the ho-hum 6.2% return on equity that came with it. History is not on his side.

Santander progress yet to show up where it counts

31 Jan 2024

The $65 bln lender has already hit its 2025 profitability targets, yet still trades below tangible book value. Investors may fear risks like European rate cuts, or they might not buy Santander’s strategy. Until they award a higher valuation, boss Ana Botín’s job is incomplete.