Financial Services

UniCredit’s surge is a pipe dream for Barclays

24 Oct 2023

The Italian bank’s shares have risen to 60% of forecast tangible book value while the UK lender languishes at 40%. Cost control helped, which Barclays could mimic. But so did UniCredit’s business lines and geography, which is not something the British group can do much about.

Kotak’s new boss will have his work cut out

24 Oct 2023

Former Barclays and Citi executive Ashok Vaswani is taking the helm at the $41 bln Indian bank. He’s short on domestic experience, key lieutenants were in the running for the job, and his predecessor is the lender’s top investor and a board member. Vaswani has a hard path ahead.

Flights to safety in a dangerous world are on sale

20 Oct 2023

Fears of war, pestilence or financial collapse usually drive demand for safe assets like US treasuries or gold, making them a gauge of unease. Yet amid spiraling global threats, that isn’t happening. Whether from calm or complacency, the price of geopolitical insurance is cheap.

European payments LBO would be rewarding but messy

18 Oct 2023

CVC may bid for Milan-listed Nexi, Bloomberg reported. A $16 bln buyout could earn handsome returns, even if the group just performs as analysts expect. But Nexi’s private-equity shareholders like Hellman & Friedman know this, forcing buyers to either cough up or bring them in.

David Solomon’s Goldman remix is audibly off-key

17 Oct 2023

The Wall Street firm is well short of a 15% return on equity goal, even absent consumer-bank snafus and property writedowns. Its CEO gave up DJ-ing, but promises Goldman can spin a new tune focused on more stable income. It will take much more to prove that’s attainable.

Macquarie’s Norse saga sends telco breakup warning

17 Oct 2023

The Australian firm is mulling options for Danish operator TDC. A lengthy plan to separate its network from its consumer business left both units burdened by debt amid intense competition, which could deter buyers. Others looking to split, like Telecom Italia, may think twice.

Smaller banks pose big problems for regulators

12 Oct 2023

Britain’s Metro Bank came close to the brink, while several US regional players failed earlier in 2023. In this Viewsroom podcast, Breakingviews columnists debate whether watchdogs have the right tools to deal with such situations, and whether they’re brave enough to use them.

Wall Street prepares to dish economic dirt on US

12 Oct 2023

JPMorgan and fellow mega-lenders have an unequaled view into the minds and wallets of American consumers and companies. While third-quarter earnings will reflect individual struggles – notably at laggard Citi – what they say about the country’s fortunes deserves equal attention.

Hong Kong buyout leaves property woes clear as mud

10 Oct 2023

Haitong Securities offered a 114% premium for shares it doesn’t already own in its ailing subsidiary. At some 60% of book value, that could have set a benchmark for other brokerages laid low by their China real estate holdings. The lack of transparency on assets prevents that.

Metro deal is a model of sorts for bank watchdogs

9 Oct 2023

The UK lender’s self-help plan refinances 350 mln pounds of debt that regulators force it to have. Arguably those rules caused the recent panic, but they also act as an early warning system. US supervisors mulling a similar approach may see enough positives to press ahead.

Bond rout threatens to feed on itself

6 Oct 2023

Strong jobs data pushed 10-year US Treasury yields up again. Alongside nagging inflation and political turmoil, it raises concerns the Fed will keep interest rates higher for a while. Pricier borrowing costs depress asset values, which can lead to a crisis that sparks more fear.

Buyout firms catch second-hand shopping fever

5 Oct 2023

Despite a 31% fall in fundraising across the industry since 2021, Goldman amassed $15 bln just to go thrifting for private equity portfolios. Such deals generally produce steadier returns, but a rush of bargain-hunters could boost valuations, making financial upcycling riskier.

Big Four scandals will derail breakup plans

5 Oct 2023

EY and PwC are dealing with issues in their tax and consulting units. In this Viewsroom podcast, Breakingviews columnists explain how falling valuations of rivals like Accenture as well as questions about the stability of consulting fees will mean these firms may stick together.

Metro Bank’s fortunes depend on its bondholders

5 Oct 2023

The ailing UK banking upstart urgently needs more capital. One option is to buy back bonds worth 600 mln pounds that trade far below face value. Given the threat of regulators wiping them out, holders may prefer to sell. That would also give Metro more time to find a new owner.

CFPB opponents gamble with US financial stability

3 Oct 2023

The 12-year-old consumer finance watchdog has amassed powerful enemies, partly because of combative boss Rohit Chopra. But a Supreme Court challenge to its funding threatens other regulators like the Fed too. Making crisis-fighting departments beg Congress for cash is dangerous.

Retailer ‘shrink’ becomes too big to box up

3 Oct 2023

American stores lost $73 bln to theft last year, a nearly 20% rise from 2021, while Target just blamed crime for nine closures. Few chains report specifics, however, stirring doubts about anecdotal evidence. Consistent disclosure would help keep investors from getting fleeced.

Bond blues kick the fun out of racy stocks

2 Oct 2023

Yields are rising for the wrong reason – persistent inflation rather than growth. That’s pushing shares down as well. Some companies will suffer more. Those with higher portions of cash flows coming in the future, like technology firms, are most vulnerable.

PwC Aussie mess is classic do as I say not as I do

29 Sep 2023

An independent review sparked by a tax-leak scandal lays bare governance failures at the advisory firm including an overly powerful CEO, a supine board, poor risk processes and, ironically, an aversion to external help. Fixing those is just the start of the company's turnaround.

Jeffrey Epstein leaves small mark on Wall Street

27 Sep 2023

JPMorgan will fork out another $75 mln to settle claims over its ex-client, winding down the sordid mess for financiers. The sex offender cost two industry CEOs their jobs, while banks now monitor such reputational risks more closely. The effects are likely to fade soon, however.

Capital Calls: UBS Russia risk

27 Sep 2023

Concise views on global finance: The Swiss bank’s value fell by $3 bln after Bloomberg reported that the US Department of Justice is investigating the recent acquisition of Credit Suisse over possible compliance failures.