Financial Services

New UBS investor pitch fits better than old one

25 Apr 2023

Rescuing Credit Suisse is a risky move. But first-quarter results show that the buyer’s existing business is struggling to grow. The merger offers large savings and creates a wealth giant with $3.5 trln of assets. The return of proven cost-cutter Sergio Ermotti as CEO helps.

EY’s split fiasco will spark slow-motion decline

25 Apr 2023

The audit giant’s bean-counters are insulated against a rapid loss of business after its failed breakup. But EY’s more profitable consulting arm, including its prize tax unit, is less so. More reticent new clients and staff may see the Big Four become the Big Three-and-a-half.

Asia’s richest banker will loom over his successor

25 Apr 2023

Uday Kotak plans to stay on the board of the $46 bln bank bearing his name after he steps down as chief this year. Shareholders are supportive but it could end up being messy and it is at odds with the Indian regulator’s own aim to shore up governance by making CEO terms shorter.

Credit Suisse mess leaves scattered Swiss debris

24 Apr 2023

A $3 bln state-sponsored UBS takeover prevented the failure of Bern’s other big bank. Yet small, export-oriented Swiss firms now only have one large lender for their needs, and additional bank regulation is likely. Meanwhile, historic US tax issues may come home to roost.

Guest view: Why bank investors have it the hardest

21 Apr 2023

Lenders were supposed to be boring after 2008. Recent collapses exposed that vision as a fantasy. Shareholders grapple with high leverage, opacity, erratic regulators and intangibles like trust. Seemingly low valuations may not be low enough, argues former analyst Rupak Ghose.

Wall Street aces its real-life stress test

20 Apr 2023

Disaster simulations the Fed imposed on JPMorgan, Morgan Stanley and others hadn’t gamed out a sharp rise in interest rates. Nonetheless, the mega-banks have emerged intact, and in many cases better off, from a near-existential shock. It bodes well for the crises yet to come.

Chinese financiers’ pay cut could cut too deep

20 Apr 2023

Salaries are being slashed and executives arrested as campaigns attacking bad debt and excessive wealth converge. Few sympathise with flashy capitalists, but the private sector could take collateral damage if President Xi Jinping’s rectification push goes too far.

Bank chiefs move fluttering interest-rate needle

19 Apr 2023

Morgan Stanley’s James Gorman and JPMorgan’s Jamie Dimon both warned that sticky inflation may prompt the Fed to hike rates to 6%. While not a prediction, the figure exceeds what investors and the central bank itself expect. When CEOs sitting ringside weigh in, it pays to listen.

Capital Calls: Allianz’s fintech sale

19 Apr 2023

Concise views on global finance: The $100 bln insurer may offload its 5% stake in German digital banking startup N26, a decision that would make all kinds of sense.

EU bank crisis plan makes best of bad landscape

18 Apr 2023

The European Union’s proposal to extend its bank-failure system to smaller lenders is an attempt to work around political constraints. Broader use of deposit guarantee schemes should limit bailouts and help troubled banks find buyers. But even sensible tweaks may not be possible.

Goldman has its fingers in the wrong pies

18 Apr 2023

The Wall Street giant missed out on the interest-income avalanche that boosted peers, and its trading revenue sagged after last year’s bonanza. Meanwhile, CEO David Solomon’s consumer push is still losing money. Where rising rates are a gift to rivals, Goldman needs the opposite.

Capital Calls: Bridal bankruptcy

18 Apr 2023

Concise views on global finance: David’s Bridal, which dresses one in four American brides, has filed for Chapter 11 bankruptcy for the second time in five years. Trends that push women to spend more on themselves suggest the chain would have better luck with bachelorettes.

Singapore’s safe-haven success stirs its own drama

18 Apr 2023

It is booming as a wealth management centre and has a runway for growth: the hub books a fraction of the funds that Switzerland does. But winning the confidence of ultra-rich Asians comes with a unique set of problems. The Lion City can manage some of those better than others.

Rivals can feast on Credit Suisse client spoils

17 Apr 2023

UBS’s wealth assets may soar to $3.4 trln after buying its main competitor. Yet, smaller challengers are looking to poach private bankers, and clients will diversify away from the new mega-bank. And rival financial hubs have a golden opportunity to dent the Swiss wealth crown.

Baijiu is fiery palate cleanser for Hong Kong IPOs

17 Apr 2023

A KKR-backed Chinese liquor group’s $800 mln listing is the city's largest this year. Beijing is directing funding onshore to strategic industries, and that will force more consumer companies to Hong Kong. Investors will be alert to see if that pushes more risk their way too.

Only the big will crack the $1 trln LBO code

12 Apr 2023

Buyout barons have a collective 13-digit sum to spend, but little borrowing available to juice returns. As lenders tiptoe back, deals will rely on more upfront cash and extra elbow grease in credit markets. It adds up to slower activity and greater industry concentration.

Capital Calls: Inflation gets sticky

12 Apr 2023

Concise views on global finance: US inflation is increasingly coming from non-essential goods’ prices that rarely drop. That’s a bad sign for Americans since it signals a longer battle against price hikes and even higher interest rates.

Swiss mega-bank has scope to shrink to greatness

5 Apr 2023

Swallowing Credit Suisse propels UBS into the big leagues, with $3.4 trln of wealth assets and more dealmaking fees than Citi. Staying large means taking on volatile units and risky clients. Unlike previous empire-builders, CEO Sergio Ermotti has a remit to slash aggressively.

Capital Calls: Illumina’s odd bedfellows

3 Apr 2023

Concise views on global finance: The FTC’s order that Illumina unwind its Grail acquisition puts head commissioner Lina Khan on the same side as Carl Icahn. Khan opposes the deal because Illumina can raise prices, while the activist thinks the deal doesn't make sense.

Goldman gently embraces both sides of hostile M&A

31 Mar 2023

The preferred adviser to reluctant takeover targets is benefiting from its broadened horizons. Working with aggressive suitors Public Storage and Emerson Electric helped keep bankers busy amid a 45% slump in deals. Merger culture has changed, as has Goldman’s broader strategy.