Financial Services

Peer pressure is new activist tool for Japan Inc

10 Jan 2024

The Tokyo Stock Exchange is set to name all the companies which responded to its push for better capital efficiency and returns. The bourse is betting transparency will shame the rest into action. Success could pull investors and M&A bankers alike to the $6 trln market.

Global polycrisis could yet have not-so-bad ending

8 Jan 2024

From war in Gaza and Ukraine to superpower rivalry, climate change and slow growth, there is a lot of danger in the world. The possible return of Donald Trump as US President is another risk. But there are more optimistic scenarios - and some silver linings in pessimistic ones.

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.

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.

Big companies will raid government for future CEOs

20 Dec 2023

There’s a long history of businesspeople going into politics. Now sanctions and subsidies are showing boardrooms the value of diplomatic skills. Lazard CEO Peter Orszag and Legal & General Chairman John Kingman worked in government. Others will follow through the revolving door.

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.

Backlogged M&A pipeline will burst in 2024

19 Dec 2023

Even normally chipper bankers are wary as merger activity heads for a second straight drop from its $5.7 trln peak in 2021. And yet stabilizing capital costs, bulging cash reserves and adjusting valuation mindsets should help spark enough pressure to ignite a deals resurgence.

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.

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.

LME win leaves one tricky question unanswered

29 Nov 2023

A court backed the London Metal Exchange’s decision to cancel $12 bln of nickel trades, rejecting a challenge by fund Elliott. The HKEX-owned venue has improved its standards. But the verdict does not address its conflict of being both a regulator and a commercial player.

Everybody could use a Charlie Munger

28 Nov 2023

Warren Buffett’s deputy and self-dubbed cheerful pessimist has died a month shy of his 100th birthday. He was witty, smart and a fixture at Omaha gatherings. But his chief asset, as a sounding board to the one who got fame and fortune, was also his boss’s best value investment.

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.