Financial Services

Swiss anger will sour UBS’s deal of the century

31 Mar 2023

Politicians and citizens are unhappy about job cuts and future risks arising from the bank’s $3 bln state-backed Credit Suisse rescue. Parliament fury may force returning CEO Sergio Ermotti to tweak the deal. Either way, an unsavory domestic whiff could hang over UBS for years.

Alibaba hands parched dealmakers a glass half-full

30 Mar 2023

The $250 bln e-commerce giant’s six-way split will prompt bankers to dust off pitchbooks for peers like Tencent and Baidu, too. The bold can spread the net wider to carmakers and more. With M&A and other fees in a slump, it’s the best chance in a while to drum up business.

Boomerang UBS boss ticks several important boxes

29 Mar 2023

Sergio Ermotti is returning as CEO after less than three years. The suboptimal governance move highlights a dearth of senior banking talent. But Ermotti’s record of shrinking an investment bank – and his Swiss passport – will be vital in the tricky integration of Credit Suisse.

Capital Calls: Syngenta IPO delay

28 Mar 2023

Concise views on global finance: The Shanghai Stock Exchange has canceled a hearing to review the agrichemicals group's listing plans, leaving investors fearing the worst in China.

Bank health barometer could use own health warning

28 Mar 2023

Stock market investors interpreted last week’s jump in Deutsche Bank’s credit default swaps as a sign of distress. Yet thin trading in parts of the $12 trln market for speculating on creditworthiness can exaggerate moves. Add social media and it can feed self-fulfilling spirals.

SVB sale puts too-big-to-fail risk in a new bottle

27 Mar 2023

First Citizens got a good deal buying Silicon Valley Bank’s assets. For regulators, it’s a tradeoff. The buyer’s balance sheet has nearly quadrupled in just over a year. Until flaws in overseeing fast-growing banks are fixed, promoting aggressive expansion brings new pitfalls.

Capital Calls: Saudi and Credit Suisse, EU patents

27 Mar 2023

Concise views on global finance: The resignation of the chairman of Saudi National Bank, Credit Suisse’s largest shareholder, may prompt a quiet period for other investors; big companies want Europe’s new system for registering intellectual property to cover more countries.

US corporates and China hug awkwardly in Beijing

27 Mar 2023

Executives from Apple, Visa and others showed up at the country’s flagship investment summit to network with top officials. Both sides hope China’s reopening will reassure American investors. A consumption revival would help, but politics is making decoupling the default thesis.

Bank investors grapple with scary post-truth world

24 Mar 2023

Shares in European lenders like Deutsche Bank fell by as much as 10%. There’s no clear problem, since they’re liquid and well-capitalized. But Credit Suisse effectively failed days after regulators declared it sound. It leaves markets jittery, and banks uncertain how to respond.

Bitcoin is a solution looking for a problem

24 Mar 2023

Peter Thiel says the cryptocurrency is an inflation hedge, and bitcoin’s price has soared since Silicon Valley Bank’s collapse. But his actions don’t match that advice, and the Fed’s backing of the system is antithetical. Plus, importantly, bitcoin, unlike gold, is speculative.

Short-seller attack blunts Block’s edges

23 Mar 2023

Shares of the Jack Dorsey-led payments company dropped over 10% after Hindenburg Research flagged customer-quality issues and loopholes that have supported its growth. These seem troublesome not terminal, but it’s enough to put a question over Block’s generous valuation.

Swiss CoCo litigation may have a broader payoff

23 Mar 2023

Holders of Credit Suisse’s $17 bln contingent convertible bonds think authorities were wrong to wipe them out. A legal challenge will take years. Still, Bern might decide to placate angry investors. And a fight will discourage countries considering following the Swiss example.

Credit Suisse rescue sends shockwaves far and wide

23 Mar 2023

The ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable.

Fed’s self-scrutiny starts off on the wrong foot

22 Mar 2023

Supervisory tsar Michael Barr is leading a probe into Silicon Valley Bank’s collapse. But the Federal Reserve’s tangled, partly centralized structure makes it ill-suited to conduct a warts-and-all review of its supervision. Banks don’t police themselves; the Fed shouldn’t either.

Swiss CoCo shakeout may yet help bank regulators

22 Mar 2023

The market for quasi-equity bonds is reeling after Credit Suisse wiped out its own ones. The higher cost of issuing the securities means banks may now roll over their maturing debt, rather than replace it as per the market norm. That could actually help financial stability.

Saudi is far from the last Western bank bagholder

21 Mar 2023

Credit Suisse’s rescue by UBS will cost top shareholder Saudi National Bank over $1 bln. Abu Dhabi’s ADIA and Singapore’s GIC and Temasek also caught a falling knife after buying Western banks in 2007. Politics, and the Gulf’s growing oil riches, imply further loss-making punts.

Credit Suisse reinforces Japan’s offshore anxiety

21 Mar 2023

Global bank jitters have investors looking for weak links. Japanese lenders, with staid depositor bases, are unlikely targets for bank runs, but they hold $2 trln of overseas bonds with thin profit margins. They may not dump US Treasuries in haste - but rebalance they will.

India maps a viable next chapter for CoCos

21 Mar 2023

Local issuance of contingent capital froze after Yes Bank wrote down $1 bln in 2020, without wiping out shareholders - similar to Credit Suisse’s rinse. Fast forward: owners of the stuff are still fighting the move, but this niche of the bond market has come back stronger too.

Banking mayhem envelops TD’s stalled $13 bln deal

20 Mar 2023

The Canadian lender’s agreed takeover of US peer First Horizon has been snarled up by regulators for over a year. Now, there are fresh concerns about the trouble unfolding in regional banking. The rapidly changing calculus threatens to upend the merger – and some investors, too.

Signature Bank buyer gets a crisis dividend

20 Mar 2023

US watchdogs tend to give bank mergers a tough time until a lender hits the skids. New York Community Bancorp’s stock jumped 39% after getting a lightning-fast nod to snap up chunks of its failed rival for a song. Regulators can be principled or fast in a crisis, but rarely both.