Banks

Wall Street brings gun to Basel knife-fight

10 Jan 2024

JPMorgan and peers have good reason to be livid over proposed US bank rules. Some planned changes would punish them unduly, clash with existing controls, and effectively hand business to foreign rivals. With logic on their side, the risk is that banks overplay their hand.

Citi shows China too big for Wall Street to snub

5 Jan 2024

The $100 bln US lender aims to launch an onshore investment bank this year, per Reuters, even as established Western rivals turn cautious. Citi’s move underscores a simple, timely fact: despite geopolitical, economic and data concerns, the People’s Republic is a must-play market.

Capital Calls: India’s bank payouts

3 Jan 2024

Concise views on global finance: A proposed overhaul of two-decade-old dividend rules for the country’s lenders adds a flourish to a successful bad loan cleanup. 

Convertibles will be 2024’s hot financial model

2 Jan 2024

Hybrid bonds, which fueled hedge fund billionaire Ken Griffin’s rise, sputtered after a $370 bln Covid-era boom. Refinancing needs are revving them back up as interest-cost savings lure new issuers like Duke Energy. New features should tempt investors to ride off with them again.

Goldman’s partnership is too much of a good thing

28 Dec 2023

The arcane and elite 420-member group bolsters the bank’s cachet, but sometimes exerts power that’s out of sync with other shareholders. Boss David Solomon already answers to his board, clients and 45,000 other employees. He would do well to cut the inner circle down to size.

Mega-bank M&A goes from impossible to imaginable

28 Dec 2023

After 2008, CEOs saw investment-bank deals as risky while regulators saw them as dangerous. UBS will prove otherwise if it safely and profitably absorbs Credit Suisse. Imitators will not get the same sweet deal, but targets like SocGen and Barclays at least come cheap.

Capital Calls: Back from the USSR

20 Dec 2023

Concise views on global finance: Austrian bank Raiffeisen’s 1.5 bln euro plan to swap assets with sanctioned billionaire Oleg Deripaska is smarter than it looks.

Capital Calls: Cevian tries ‘relaxivism’ at UBS

19 Dec 2023

Concise views on global finance: The pushy European investor has bought shares worth around 1.2 bln euros in the Swiss bank, equivalent to a 1.3% stake. Yet it seems happy to sit back and let UBS management execute their strategy.

StanChart M&A theory will finally become reality

19 Dec 2023

For years, the bank run by Bill Winters was cheap but dysfunctional. Now, it’s producing significantly higher returns on tangible equity but the valuation remains low. If that persists in 2024, it will be hard for suitors like First Abu Dhabi Bank to resist launching a bid.

Capital Calls: MUFG Down Under

18 Dec 2023

Concise views on global finance: The Japanese finance group’s latest overseas pounce is a $740 mln agreed deal for Link Administration, an investor services firm with three years of failed takeovers behind it.

Banks’ hidden losses are surprise survivor of 2023

13 Dec 2023

The same paper deficits that helped fell Silicon Valley Bank in March still burden lenders worldwide. Bank of America alone sits on $130 bln; US banks nurse a record sum. Investors are now better at telling what’s scary from what’s not, but fuzzy accounting remains unhelpful.

Bank CEOs channel movie mobsters in Basel fight

7 Dec 2023

New capital rules are beset by inefficiencies and inconsistencies. Yet eight US bank chiefs appearing before the Senate delivered a more populist warning: water them down, or regular Americans will be impoverished. It’s disingenuous at best; counter-productive at worst.

Qatar Barclays sale raises turnaround stakes

5 Dec 2023

The Gulf state almost halved its holding in the British bank ahead of a strategy update. It suggests little faith that the $27 bln lender will tackle its lowly valuation and investment banking reliance. CEO C.S. Venkatakrishnan needs a bold plan to keep investors happy.

UniCredit G-SIB downgrade tests CEO animal spirits

1 Dec 2023

The Italian lender has lost its global too-big-to-fail designation. Yet the Bank of Italy wants UniCredit to hold even more capital than before. At least with over 10 bln euros of spare cash, Andrea Orcel has plenty of M&A firepower to buy his way back to the big league.

Private-asset binge exposes insurance to new risks

30 Nov 2023

US insurers hoovered up private loans from buyout firms last year in a profitable game of pass-the-parcel. Their hoard of alternative assets has swelled 65% in five years, and regulators are struggling to keep up. The March banking panic shows what can happen when firewalls fail.

Capital Calls: Barclays, Rolls-Royce

28 Nov 2023

Concise views on global finance: Initial glimpses of the $27 bln UK bank’s new plan suggest it won’t gee shares that trade at 0.4 times tangible book value; the engine-maker’s CEO has set out bold profit targets as part of its strategy overhaul.

Capital Calls: Monte dei Paschi

21 Nov 2023

Concise views on global finance: The Italian Treasury raised 920 mln euros by selling a 25% stake in the bank on the open market. So far, it looks like a better outcome for taxpayers than submitting to the onerous sale conditions offered by UniCredit in 2021.

“Ex-Japan” title may take a final bow with Goldman

21 Nov 2023

The retirement of Japan President Masanori Mochida gives the US firm the option to follow its rivals and have his successor report into the Asia CEO. After a long lull, Japan’s markets are hot. But shape-shifting foreign banks may opt to bring the country into the regional fold.

Julius Baer hit undermines private-banking premium

20 Nov 2023

The pure-play Swiss wealth manager fell 12% after a profit warning, prompted partly by sharp losses against its credit portfolio. Investors didn’t sign up for that kind of risk. The private bank’s top-tier valuation may have to shrink.

Ransomware targets will pay one way or another

17 Nov 2023

Just saying no to extortionists – as the White House wants US firms to do – might stamp out ransom attacks. But the hack of Chinese bank ICBC shows why it’s not always realistic. Companies who won’t pay up need ever-better defenses. Either way, it’s an extra cost to be borne.