Financial Services

Jeff Smith makes for a substitute Warren Buffett

30 Jan 2023

The activist’s $500 mln investment backing a deal by equipment auctioneer Ritchie Bros has come under fire. His support echoes Buffett’s moves at Occidental and elsewhere. Though the Starboard boss lacks folksy shine, he might be up to playing the role in all the ways that count.

Goldman cuts Solomon, and his pay, down to size

27 Jan 2023

The Wall Street bank slashed its CEO’s 2022 pay by a third, to $25 mln. It comes off as less about performance than a nod to staff facing layoffs and smaller bonuses. The risk is that while employees may see solidarity, shareholders see a boss losing the confidence of his board.

Intel is becoming accidental ad for friendshoring

27 Jan 2023

With plunging fourth-quarter sales and profitability, the U.S. firm may fall further behind Taiwanese rival TSMC in technology and manufacturing prowess. Intel has strategic value to a White House keen to promote U.S. chipmaking, but there are other ways to achieve that goal.

Blackstone shows scale is also a curse

26 Jan 2023

The asset manager missed its goal of gathering $1 trln, but it has more than doubled funds in five years. Its property fund recently benefited from deep pockets. Still some wobbles show why the tension between pleasing public and private investors won’t go away.

WhatsApp lesson reaches Wall Street by snail mail

26 Jan 2023

Morgan Stanley has docked pay for bankers who flouted off-channel texting rules. James Gorman’s firm had already got credit from regulators for being tough on chat-app misuse. But just as following rules shouldn’t be unusual, nor should making miscreants pay for what they broke.

Meme stocks give bankruptcy new excitement

26 Jan 2023

When a company like Bed, Bath & Beyond lurches towards failure, investors try to reckon what it would be worth after a cleanup. That’s harder when retail traders push its stock to unexpected highs, as happened to car rental firm Hertz. What was once a science has become a game.

Why retail bankers are beating dealmakers

26 Jan 2023

JPMorgan, Citigroup and Goldman Sachs’ earnings revealed that the basic business of lending money is thriving, while investment banking is not. In this Viewsroom podcast, Breakingviews columnists debate what this says about the U.S. economy and what to expect from the Europeans.

Euro-banks have done their time in valuation jail

26 Jan 2023

Deutsche Bank, BNP Paribas and peers are valued by investors as if they are headed for a bruising slump. Yet the region’s lenders have been treading more cautiously than they did before the 2008 crisis, and have pared back risky trades. Their rehabilitation deserves more credit.

Bank earnings become a post-Covid parlor game

23 Jan 2023

After three years of upheaval, JPMorgan, Bank of America, PNC and other lenders are waiting for customers and markets to revert to type. Some think bad debts, spending and trading will level out; others aren’t so sure. It leaves executives in a bind, and investors in limbo.

Davos, Inc. finds reasons to be less gloomy

20 Jan 2023

Business leaders gathering in the Swiss mountain resort have plenty to fret about. Still, with China reopening, Europe keeping the lights on and interest rate pressure easing, the overriding emotion is one of relief. Less clear is whether the mood extends beyond the alpine elite.

Battered fintech sector’s next play: sell ads

20 Jan 2023

Erstwhile financial technology stars like $47 bln Block and Klarna are suffering from falling valuations and slowing sales. Yet they’re sitting on potentially valuable insights about punters’ spending habits. That points to an opportunity in helping retailers reach their users.

Goldman slams into unwelcome sort of volatility

17 Jan 2023

The investment bank’s push into consumer lending was meant to bring stable growth to balance out trading swings. Instead, it has done the opposite, losing $4 bln and counting. Belated, patchy disclosures don’t help, nor does archrival Morgan Stanley’s wealth management success.

How to navigate a bewildering market landscape

17 Jan 2023

The pandemic boom lured in new and younger investors. Now interest rates are up, asset prices are down, and ESG investing faces a backlash. In this Exchange podcast, Morningstar CEO Kunal Kapoor talks about personalising investment, the value of data, and taking the long view.

Capital Calls: British jolt

17 Jan 2023

Concise views on global finance: The collapse of UK battery group Britishvolt leaves a gaping hole in the country’s auto manufacturing sector.

Banks dress up for a business-casual recession

13 Jan 2023

A downturn is coming, warn lenders like JPMorgan, Bank of America and Citi, but nothing too fancy. Even as bad-debt charges mount, they keep lending, especially through credit cards. After years of enforced discipline, banks are appropriately attired even if things get much worse.

Valuing Michael Klein is a fascinating sideshow

13 Jan 2023

Credit Suisse may buy the rainmaker’s boutique and merge it with a soon-to-be-spun-off investment bank. That means putting a price on M. Klein & Co and First Boston, neither of which is easy. But for CEO Ulrich Körner, up to $4 bln of possible upside justifies being generous.

Banks’ profit picnic will attract ant invasion

12 Jan 2023

Rising rates create a feast for large lenders like JPMorgan and Bank of America, even as investment banking fees wither. But customers, employees and regulators are all vying for a slice. The risk for investors isn’t that recession bites in 2023, but that expenses gnaw.

Beware bankers bearing a hostile buyout pitch

11 Jan 2023

Canaccord’s bosses are offering C$1.1 bln for the Canadian broker and wealth manager. With a mix of private credit, opportunism and some hidden value to engineer, the bid makes good use of the M&A toolkit. The board and shareholders would be wise to consider all the angles.

Wells Fargo labors under $100 bln sin discount

10 Jan 2023

A recent $3.7 bln regulatory settlement is a step in the right direction, but there are many more to take before CEO Charlie Scharf can start catching up to rivals. The 12-digit cost of past misdeeds, including from a punitive cap on assets, represents a ton of value to restore.

First Abu Dhabi and StanChart may have second act

10 Jan 2023

The UAE bank was considering a bid for the $23 bln UK-listed emerging market lender but is no longer doing so. Nevertheless, StanChart shares are hovering above their pre-bid level. While a deal would create capital and regulatory headaches, that doesn’t mean it won’t happen.