Financial Services

HSBC invites shy investors to turnaround party

1 Aug 2023

Boss Noel Quinn is upping targets at the $160 bln bank after first-half pre-tax profit more than doubled. It’s good timing: pushy shareholder Ping An and its breakup hopes may have been effectively silenced, but other owners need convincing that Quinn’s overhaul has legs.

Capital Calls: Bank of Japan, StanChart

28 Jul 2023

Concise views on global finance: Governor Kazuo Ueda shook markets by introducing a more flexible approach to controlling government bond yields, but he can easily retreat if inflation drops. Meanwhile, Bill Winters’ lender is improving but the heavy lifting is far from over.

New bank rules cage a tiger, feed a dragon

27 Jul 2023

Big U.S. lenders’ profitability is under fire from new Basel-related capital requirements – so expect them to fight it tooth and nail. The risk is that it pushes activity into the shadows, by accident rather than design. It’s a good way to set the scene for a future crisis.

Barclays CEO fiddles while valuation droops

27 Jul 2023

Despite earning adequate returns, the $32 bln UK bank has long traded at a big discount to rivals. Boss C. S. Venkat’s plan so far boils down to more of the same. Without clearer targets to move capital out of investment banking, the shares risk remaining stuck in the doldrums.

BlackRock makes a sharp bargain with Mukesh Ambani

27 Jul 2023

The world’s largest money manager, run by Larry Fink, is teaming up with India’s richest man to re-enter the country’s asset management business. The duo can grow fast in the cutthroat $540 bln sector riding on Reliance’s network. It justifies the US firm giving up on control.

Rescuing US banks can be lucrative, after all

26 Jul 2023

PacWest, a regional lender battered by investors, is merging with tiny Banc of California at an apparent 20% discount and ceding management control. The $2 bln deal sounds painful, but all sides should be better off. Backers Warburg Pincus and Centerbridge stand to benefit most.

Government’s NatWest meddling crosses risky line

26 Jul 2023

The UK bank ditched CEO Alison Rose hours after backing her, amid pressure from its 39% state shareholder. It’s right for Rose to go. But voters may now wonder why politicians can’t also intervene in setting mortgage rates, and NatWest may find it hard to find a top replacement.

Buyout barons feast on excesses of last boom

21 Jul 2023

The post-pandemic M&A frenzy is long over, but its legacy lives on in the generous loans that fueled a wave of leveraged takeovers. With debt now scarcer and twice as costly, investors like Blackstone and CD&R are crafting deals that take advantage of yesterday’s cheap credit.

NatWest goof is a boon for sketchy bank clients

21 Jul 2023

The UK lender’s CEO apologised to right-wing talking head Nigel Farage amid an account-closure row. Britain will now force banks to respect freedom of expression. Yet that may make it harder to ditch other, more problematic clients – and weaken the fight against money laundering.

Capital Calls: European earnings

20 Jul 2023

Concise views on global finance: Consumer-facing companies Electrolux, Essity and HelloFresh all plunged after weaker-than-expected financial reports.

Goldman is losing Wall Street’s popularity contest

19 Jul 2023

Own goals dragged the investment bank’s return on equity down to 4% in the second quarter, half of Morgan Stanley’s level. Though Goldman Sachs still rules markets, its relative valuation has sagged under CEO David Solomon. He lacks his rival’s bold plan to win over investors.

Morgan Stanley and MUFG’s next act is well-timed

19 Jul 2023

The duo will collaborate on equities and currencies as their 15-year alliance evolves. With global interest in Japan driving up stocks as Tokyo toughens its stance on governance and amid a welcome return of inflation, the partnership will become even more the envy of its peers.

Banks peer at fun-house mirror version of normal

18 Jul 2023

Bank of America reported interest, trading gains and deposits well above pre-Covid levels, still with lower losses on its $1 trln of loans. Peers talk of normalization, but conditions are still far from normal. From capital to expenses, banking may look different for a while yet.

Research U-turn is poor fix for vanishing stocks

18 Jul 2023

The UK and EU may let investors pay for equity analysis through trade commissions again. The hope is that this will lead to more research and help small firms list. Yet asset managers will fear higher costs, and the IPO market faces bigger headwinds than a writeup shortage.

Warren Buffett flaunts his green investment thumb

17 Jul 2023

Berkshire Hathaway is paying $3.3 bln for control of a liquefied natural gas facility. The conglomerate’s utilities now account for about half the conglomerate’s capex. Regulated returns help, but the Oracle’s funding devoted to energy transition should be a sign to laggards.

Citi cheers into the valuation void

14 Jul 2023

Even amid shrinking revenue and weak markets, CEO Jane Fraser is thumping the pulpit on the bank’s turnaround, sticking by a target of an 11% return on tangible equity. One problem is that investors don’t seem to believe it; the other is that rivals are already getting far more.

Capital Calls: Illumina, Domino’s Uber delivery

12 Jul 2023

Concise views on global finance: The EU fines the $30 bln genetic test maker 432 mln euros for closing its 2021 Grail deal prematurely; the pizza chain known for its own delivery app is expanding its service with Uber Eats, a smart move to nab more orders from fickle customers.

New bank capital rules fix roof while sun shines

11 Jul 2023

Regulatory proposals might further constrict big banks like JPMorgan following a financial crisis that wasn’t their fault. Fed rulemaker Michael Barr at least chose a good moment, rather than waiting for the next catastrophe. But banks can easily gripe that nothing needs fixing.

Venture capital has female entrepreneur black spot

11 Jul 2023

Companies founded by women get at best 3% of venture money each year. That’s a sign investors are not allocating capital wisely and missing lucrative deals, Loyal VC founding partner Kamal Hassan tells The Exchange podcast. It’s time to change the venture playbook.

Hobbled Ant faces treacherous march ahead

10 Jul 2023

China's erstwhile fintech star is buying back shares at a quarter of its $300 bln price tag in 2020. Even with Beijing signalling an end to a years-long crackdown on the sector, the restructured firm’s new valuation looks generous as an economic slowdown could shrink it further.