Financial Services

Sergio Ermotti has a path to Wall Street-style pay

28 Mar 2024

UBS handed its CEO $16 mln for nine months’ work last year. That’s more than his European rivals, but less than the bosses of US lenders like Morgan Stanley, whose valuation the $100 bln Swiss bank aspires to. Tweaked terms next year give Ermotti a chance to narrow the gap.

Credit card suit takes swipe at perks programs

27 Mar 2024

A $30 bln settlement in a decades-old lawsuit will compel payment networks Visa and Mastercard to let retailers charge customers more to use certain cards – and to tell them why. As shoppers take notice, they may cool on fancy rewards programs.

Big banks’ shock absorbers are still far too slim

26 Mar 2024

Credit Suisse and a string of US regional banks failed last year. In this Exchange podcast, Stanford Professor Anat Admati argues that lenders’ equity buffers are punier than they seem – and that fixing the problem needn’t cause a credit crunch.

Bank crises proved a mixed blessing for rivals

21 Mar 2024

It’s 12 months since Silicon Valley Bank failed and Credit Suisse collapsed into the arms of UBS. In this Viewsroom podcast, Breakingviews columnists explain how bigger banks gorged on these lenders’ carcasses – and how the system’s underlying weaknesses have not gone away.

US nudges EU banks toward clean break with Russia

20 Mar 2024

Austrian lender Raiffeisen dreamt up a $1.6 bln plan to salvage value from its Moscow-based unit. But Washington dislikes it, Reuters has reported. For European banks, upsetting the US could ultimately be more damaging than the write-offs from a speedy Russian exit.

Credit Suisse carcass feeds many hungry mouths

15 Mar 2024

In the year since it collapsed, competitors have carved up the Swiss bank’s employees and clients. UBS grabbed most of the spoils, but Santander, Deutsche Bank and others have also moved in. Lasting benefits, though, depend on survivors showing restraint when activity picks up.

Bill Winters pulls a poor man’s Jamie Dimon

13 Mar 2024

The frontrunner to succeed StanChart's CEO has abruptly left the bank. JPMorgan's boss is adept at ousting executives, Winters included, but Dimon has earnings and investors on his side. Winters wants for the latter. The lack of a clear heir is now another worry for the board.

Generali has some scope to think bigger on M&A

12 Mar 2024

Under CEO Philippe Donnet, the $38 bln insurer did smallish deals. Targeting big players like $16 bln Aviva, to shrink a gap with rivals, may require clashing top investors to back an equity hike. But Generali could also fund a large buy by running down its chunky capital buffer.

Hostile bidders run into a credibility crunch

11 Mar 2024

Retailer Macy’s and hunting-gear maker Vista Outdoor are resisting uninvited $7 bln and $3 bln buyouts, arguing that the funding is flimsy. Higher interest rates indeed make life harder for suitors. Both proposals, however, look carefully calibrated to reflect the times.

Simmering M&A gumbo lacks essential ingredients

8 Mar 2024

Dealmakers cooked up more than $520 bln of mergers during the first two months of 2024, up 75% from last year’s ultra-sluggish start. Financial and legal advisers gathered in New Orleans are still stewing, however. For them, the recipe calls for some Fed and private equity spice.

Lower rates, office return will ease property pain

7 Mar 2024

The post-pandemic boom in hybrid work is causing trouble for banks that have lent heavily to office developers. But in this Viewsroom podcast, Breakingviews columnists explain how losses may be limited if central banks bring borrowing costs down and bosses call employees back.

A year on, SVB’s killer is still at large

7 Mar 2024

Twelve months after Silicon Valley Bank’s demise, investors worry more about real estate than flighty depositors. The disjointed system that enabled a crisis remains intact, though, with patchy oversight, incomplete safety nets and ambiguity over who loses if a lender fails.

Virgin Money sale is UK challenger banks’ swansong

7 Mar 2024

Nationwide Building Society is paying a high premium for the embattled lender, but accounting gains and the scope to rival giants like Lloyds Banking Group sweeten the $3.7 bln deal. Still, the demise of the most prominent smaller bank suggests the sector is reverting to form.

NYCB revives an old playbook for the new crisis

6 Mar 2024

Trump-era official Steven Mnuchin is leading a $1 bln infusion in the stricken lender, a move reminiscent of his 2009 IndyMac deal. Tapping private investors saves passing NYCB’s woes to another bank; a cheap price squares the math. It may be a template for future stragglers.

Basel climbdown would make the shadows less scary

6 Mar 2024

Tough new rules on bank capital are likely to be watered down. That would be a victory for lenders like JPMorgan that complain they’re already smothered by safeguards. It’s less good for so-called shadow banks like Blackstone and Apollo that stand to grow fat on their castoffs.

If only banks were more like chemical factories

1 Mar 2024

New York Community Bancorp and paint-materials maker Chemours both ousted their CEOs after discovering flawed internal controls. Economic importance and heavy regulation distinguish the two $3 bln companies. One crisis mostly affects shareholders; the other should worry everyone.

Banks’ hot new trade could burn others, for once

29 Feb 2024

So-called synthetic risk transfers offer a Houdini-like way of loosening capital handcuffs. While best suited to the biggest lenders, it could also help smaller rivals burdened by shaky real-estate bets. The danger to banks is minimal; investors need to read the small print.

LSEG’s big data dividend is still in the cloud

29 Feb 2024

Three years after absorbing information purveyor Refinitiv, CEO David Schwimmer has hit his growth and margin targets. Yet investors still value the $60 bln London Stock Exchange owner like a bourse operator. An upgrade depends on persuading Microsoft users to pay for LSEG data.

UK $4 bln insurance mash-up may yet motor

28 Feb 2024

Direct Line rejected a cash and share offer from its $8 bln Belgian rival Ageas. The target’s depressed share price suggests it has good reason to hold out for more. And synergies related to the two groups’ capital should give Ageas scope to hike its offer.

Klarna IPO now makes less sense than one later

28 Feb 2024

Decent growth and lower losses mean the Swedish buy now, pay later group can justify a $20 bln valuation. Given that’s three times the level of its last cash injection, there’s an argument for a speedy listing. Still, Klarna’s messy governance suggests a 2025 IPO is more logical.