Financial Services

St James’s Place mess may spark a Lloyds reunion

28 Feb 2024

The UK wealth manager’s shares fell 33% after a $539 mln charge to compensate angry clients. Given these payouts may not worsen, St James’s Place looks to be in play. Lloyds Banking Group, which once owned part of SJP and wants to expand in wealth, could be first in the queue.

European bank property buffers rest on two big ifs

28 Feb 2024

Lenders like BNP and ING sit on $1.5 trln of commercial property loans, which look vulnerable to high interest rates. Longer leases give EU players more breathing space than US counterparts. Yet averting a crisis requires a mixture of falling inflation and a revival of offices.

A plot twist threatens Jay Powell’s artful script

27 Feb 2024

Higher borrowing costs are helping achieve the Fed’s 2% inflation target without a recession, but US wages and consumer spending tell a different tale. The upward price pressure augurs elevated interest rates for longer. To ensure a happy ending may require revising the story.

Buffett puts $1 trln grid problem in a bad light

26 Feb 2024

The billionaire’s Berkshire Hathaway became one of the biggest US utilities on the basis that providing electricity would generate steady returns. He now says he made a “costly mistake.” Thirteen-digit capital demands from climate change are quickly dimming investment prospects.

Top JPMorgan banker spots value in Citi rotation

26 Feb 2024

Viswas Raghavan is leaving a senior post at the world’s largest investment bank to lead a broader but smaller business for its rival. If he partly narrows the gap between the two, investors should gain. The 57-year-old might even have a shot at succeeding Citi CEO Jane Fraser.

Ant puts its talent for disruption back on display

26 Feb 2024

The Jack Ma-founded fintech firm has outbid Citadel for Credit Suisse's investment-banking unit in China, Bloomberg reports. A deal makes little sense but would signal the payments-to-lending group is back in good standing with Beijing. A smaller Ant can still surprise.

StanChart is a permanent work-in-progress

23 Feb 2024

The Asia-focused bank inched past its 2023 returns target, bagging longtime boss Bill Winters a 22% pay boost. But he's downgrading or postponing his next goals. And the years-long promise to simplify the lender is back. Persuading investors to boost its valuation will be hard.

Capital Calls: Oil M&A

22 Feb 2024

Concise views on global finance: The $11 billion Williston Basin combination of Chord Energy and Enerplus lacks the wow factor of Exxon’s and Chevron’s mega-mergers, but there are sufficient savings to suggest more deals will be on the way.

HSBC’s yawning discount is too harsh

21 Feb 2024

The $155 bln lender took a big impairment on its stake in China’s BoCom bank. That aside, shareholder returns have been consistently strong and look set to remain so. The successful push into Asia beyond Hong Kong suggests boss Noel Quinn is riding geopolitical waves well, too.

Capital One will struggle to cash in M&A rewards

20 Feb 2024

An $80 bln deal with Discover would create a credit-card giant with a Visa-like payment network and huge cost savings. These perks can only be redeemed by overcoming political foes, regulators and the target’s conduct issues. On balance, it’s wise to buy now, and maybe pay later.

Barclays only partly fixes investment bank problem

20 Feb 2024

The $30 bln UK lender will keep the size of its trading and advisory arm stable by 2026, while growing other businesses. That’s logical. But Barclays still needs that growth to materialise, and even then shareholders may see the newly downsized investment bank as too big.

NatWest share sale starts life on shaky ground

16 Feb 2024

The $24 bln lender’s pre-tax profit rose 20% in 2023 due to higher borrowing costs. But the boom will be brief as the prospect of falling rates and a weak economy will hit returns. That’s a tough sell for the government as it readies to offer its holding to the British public.

Banks win hollow victory over would-be disrupters

16 Feb 2024

Supermarket giant Tesco’s ditched effort to build a UK retail bank follows similar abortive attempts by telecom groups and fintech startups. Regulation and rising technology costs are partly to blame. But banks’ persistent poor returns are the most effective barrier to entry.

Peter Thiel’s latest bitcoin bet is a coronation

13 Feb 2024

The billionaire’s Founders Fund pocketed $1.8 bln in 2022 on crypto investments before dipping back in last fall. Bitcoin has since been anointed with an ETF and technology that furthers its use. The currency isn’t yet legitimate, but Thiel’s return marks its growing status.

Capital Calls: Temu’s spending

12 Feb 2024

Concise views on global finance: The Chinese shopping app’s Super Bowl commercial is part of a broader effort to win market share. It’ll help companies like Meta, but Temu now has a chance to muscle in on Amazon’s turf and force the e-commerce giant to compete.

Capital Calls: L’Oréal

9 Feb 2024

Concise views on global finance: The French cosmetics giant suffered from the same China pain as Shiseido and Estée Lauder, but it is coping better than its Japanese and US rivals.

NY bank’s slide exposes regulatory booby trap

7 Feb 2024

A credit-rating downgrade adds to the misery of investors in $3 bln New York Community Bancorp, whose shares have more than halved in a month. A plan to rebuild its balance sheet will take many months. Watchdogs, who can’t afford for fear to take root, face a different timeline.

Investors are yet to fully embrace UBS’s promise

6 Feb 2024

The $93 bln Swiss bank is restarting dividends and share buybacks after delivering 30% of total planned cost savings from the Credit Suisse merger in 2023. Yet investors don’t seem fully convinced it will hit its returns targets. Speeding up the integration this year would help.

Capital Calls: Beijing’s anti-corruption drive

6 Feb 2024

Concise views on global finance: President Xi Jinping’s crackdown on the country’s financial sector threatens to derail efforts to boost confidence in the world’s second largest economy.

Capital Calls: Estée Lauder, European banks

5 Feb 2024

Concise views on global finance: The cosmetics giant behind Le Labo is cutting jobs and redoubling restructuring efforts, but the changes only go skin-deep; Santander and Lloyds are under pressure after a report they banked entities controlled by a US-sanctioned Iranian company.