Financial Services

Capital Calls: Ritchie Bros founder regret

13 Mar 2023

Concise views on global finance: The industrial equipment auction company’s $7 bln deal for scrap-yard operator IAA has drawn one last opponent: the company’s own co-founder.

Bank rescue buys stability at a high price

12 Mar 2023

Authorities have swooped in to back depositors of the failed Silicon Valley Bank – even those not guaranteed their money back – and open the spigots for other lenders short of cash. That stops the immediate risk of bank runs. But the underlying regulatory failure is clear.

Silicon Valley Bank dies but its disease lives on

10 Mar 2023

The failed tech lender had unique problems. The lion’s share of its deposits were too big to be guaranteed by Uncle Sam, so survival depended on customers staying calm. But by putting the spotlight on these uninsured balances, regulators have created a new reason to be nervous.

Jamie Dimon throws Staley off fortress battlements

9 Mar 2023

JPMorgan is seeking to claw back eight years of pay from former executive Jes Staley, over links to sex offender Jeffrey Epstein. Suing former employees isn't a great look. But the bank, and its CEO Dimon, have been on a high. As reputations go, JPMorgan has ever more to defend.

In praise of American finance’s regulatory mess

9 Mar 2023

China’s plan to create a super watchdog leaves the US looking more like a global outlier. Its improvised tangle of agencies has drawbacks, as the 2008 crisis and crypto boom demonstrate. Even so, the rats-in-a-sack approach might be the least bad way to run a financial system.

M&A bankers trip over their cracked crystal balls

8 Mar 2023

Corporate consiglieri use an array of flawed methods to forecast deal activity, which tallied $3.6 trln last year. Luckily, they’re paid to complete mergers, not predict them. This blind spot makes staffing tougher, however, and in some ways undercuts the value of their counsel.

China’s equity watchdog gets backhanded promotion

8 Mar 2023

Beijing is elevating the China Securities Regulatory Commission in the bureaucratic hierarchy. It ought to be good news for an agency whose authority has been diluted in recent years. Yet the change sets staff up for a pay cut. More power with less money is a bad combination.

Capital Calls: TD Bank’s $13 bln cliffhanger

2 Mar 2023

Concise views on global finance: The Canadian bank’s acquisition of U.S. peer First Horizon will be delayed beyond its May 27 drop-dead date, but there are reasons to think it will still get done.

M&G would be a tricky hop for kangaroo raider

2 Mar 2023

Australia’s $48 bln financial giant Macquarie may bid for the $6 bln UK fund management group. A swoop would be well timed given M&G’s new boss is still bedding in, and the deal math just about works. But any transaction would involve a messy breakup, and the risk of a rival bid.

Banks’ state shareholders can afford slow selldown

2 Mar 2023

The Belgian and Dutch governments took advantage of a market rally to offload chunks of BNP and ABN. Valuations have risen but are still low relative to lenders’ returns. That means Britain and Germany would be wise to move gradually with their NatWest and Commerzbank holdings.

Revolut audit snag undermines $33 bln price tag

1 Mar 2023

The startup published 2021 results after a long delay. Growth soared but bean-counters raised questions over how its IT systems record revenue. That’s unlikely to help its quest for a British banking licence, which will in turn limit Revolut's ability to make sustainable profits.

Euronext CEO tests limits of M&A playbook

1 Mar 2023

Serial buyer Stéphane Boujnah’s exit from his $6 bln bid for Allfunds is a lucky escape. Its likely slim returns hardly justified the price. But he still needs to diversify from equities. A lack of targets and Euronext’s lowly valuation mean the next deal may not be any easier.

Santander’s new plan is a make-or-breakup moment

28 Feb 2023

Chair Ana Botín wants to forge deeper links between the disparate bits of her 60-bln-euro bank, including by using common IT systems. If it works, and higher returns follow, the bank should trade at more than the sum of its parts. If not, it will be hard to resist selling assets.

Capital Calls: Buffett’s greatest hits lose verve

27 Feb 2023

Concise views on global finance: The ageing financial rockstar’s annual shareholder missive is stacked with some of his fans’ favorite themes, in the latest sign that he may have run out of new material.

HSBC turnaround party has muted morning after

21 Feb 2023

The $150 bln bank has hit the targets boss Noel Quinn set three years ago, and is enjoying a valuation close to pre-pandemic levels. But Quinn’s current ambitions seem modest compared with recent performance. His conservatism may mean the bank’s rate-rise jackpot has peaked.

Capital Calls: UK banks

17 Feb 2023

Concise views on global finance: NatWest CEO Alison Rose is expecting a 3.2% lending margin in 2023, which is the same as she managed in the three months ending December. It means giddy bank investors may have to calm down.

Disney clash with activist Peltz will have sequel

16 Feb 2023

While the $200 billion media company’s new cost-cut program persuaded cage-rattler Nelson Peltz to call off his bid for a board seat, there’s much more to do. If his previous campaigns at P&G and DuPont are a guide, what looks like a harmonious ending may only be an intermission.

StanChart’s takeover defences are getting stronger

16 Feb 2023

For years the emerging markets lender’s shareholders would probably have welcomed a cash bid. But CEO Bill Winters is getting closer to a 10% return on tangible equity. Prospective suitors like First Abu Dhabi Bank would have to pay an extra chunky premium to clinch a deal.

Barclays CEO faces a long road to higher valuation

15 Feb 2023

The UK lender pays a share-price penalty because investors dislike its volatile investment bank. Shrinking it is off the table, so boss C. S. Venkat’s best bet is to boost steadier bits like transaction banking and securities lending. Over time, that may earn a higher multiple.

Fintech giant’s bad wedding leads to happy divorce

14 Feb 2023

Under pressure from activist investors, FIS is spinning off Worldpay less than four years after a $43 billion takeover. Cutting losses and focusing on steadier banking clients should lead to a higher valuation, while the payments processor will be free to pursue better deals.