Investment Banking

China brokerage deal has more bark than bite

9 Sep 2024

The merger of Guotai Junan and embattled rival Haitong will create the country’s largest brokerage with assets of $225 bln. The overcrowded sector needs consolidation, but this deal probably won’t aid Beijing’s goal to foster a squad of world-beating investment banks.

How HSBC can heal the scars of its CEO battle

29 Aug 2024

The $160 bln lender’s retail and wealth head Nuno Matos left after losing out on the top job to Georges Elhedery. The bank now has an empty CFO post, and a lack of potential future leaders. Recruiting heavy-hitting outsiders, like Citi’s Jane Fraser has done, would help.

KKR bank sale will gauge India’s fee-paying power

26 Aug 2024

The sponsor is looking for a buyer for Avendus, an investment bank rising up league tables and advising on hot deals, possibly including Swiggy's $1.2 bln IPO. It's a good time to push a sale of the tech sector's banker of choice after an earlier attempt to offload it stalled.

Europe’s dealmakers begin tough redemption journey

19 Aug 2024

The market share of BNP, Barclays, UBS, SocGen and Deutsche seems to have troughed at around 8% in M&A and 6% in equity underwriting. The days of ever-increasing US dominance may be over. Getting investors to attach more value to these volatile units, though, is the harder job.

BNP’s AXA deal is a logical use of spare cash

2 Aug 2024

The French bank will buy the insurer’s fund unit for 5.1 bln euros, using money from its BancWest sale. It’s a big deal, but the price looks fair. And while BNP Paribas investors may prefer buybacks, a capital-light target makes more sense than a rash swoop on another lender.

SocGen’s valuation salvation may lie in a breakup

29 Jul 2024

The 19 bln euro French bank trades at a 60% discount to rivals – the widest gap in a decade. None of its core units are particularly attractive, making a revival tough. But selling listed holdings, worth 8 bln euros, could fund a deeper restructuring and make M&A more plausible.

Banks prep for this-time-it’s-different deal boom

16 Jul 2024

Morgan Stanley’s 51% pop in investment banking revenue rounds out a strong quarter for Wall Street rainmakers. Peers like Goldman Sachs and JPMorgan are also eyeing a pick-up in M&A and underwriting. But the clients look different now, and so do the banks – not all in a good way.

Now is least-bad time for JPMorgan CEO to move on

12 Jul 2024

Jamie Dimon’s 18-year tenure has rarely enjoyed such a benign backdrop: record-high profit, a revival underway for Wall Street’s dealmakers, and a regulatory hammer-blow forestalled. As successors stake out a higher profile, his steady hand might be useful elsewhere - like in DC.

Shein would lose all its shine in a Hong Kong IPO

2 Jul 2024

The $63 bln online retailer may debut in the Asian hub if its plan to list in London fails, per the FT. Not only would that confirm its failure to thread the needle between its Western markets and its Chinese roots. It would result in a slashed valuation and orphan-stock status.

Even smooth bank stress-test results fray nerves

27 Jun 2024

Big US lenders aced their annual checkups, and have nearly $300 bln of extra capital, per Breakingviews math. Much of it will be tied up for maybe a year until the Fed finalizes its botched revisions to Basel rules. For now, the exams just show shareholders what they’re missing.

Banks grab AI-generated tiger by the tail

26 Jun 2024

Sleeker IT systems, stronger fraud defenses and other algorithmic upgrades could yield nearly $200 bln of profit for lenders by 2028, one study finds. An efficiency revolution isn’t evident in valuations, however. The new tech may pay higher dividends to customers than investors.

UBS deal reflects resilient demand for China trade

25 Jun 2024

Its sale of Credit Suisse’s Chinese securities JV stake to a state-run firm greases the Swiss bank’s plan to take control of another unit, and snubbed bidder Citadel still looks keen to enter the market. Conditions are tough but firms are shoring up their future on the mainland.

China’s bureaucrats can repopulate unicorn herd

24 Jun 2024

President Xi Jinping wants to know why the number of new $1 bln startups has dwindled. His crackdown on the tech sector and a sluggish economy have discouraged venture capitalists and entrepreneurs. Deploying state funds and reopening IPO markets can help revive animal spirits.

China central bank’s reform push is shrewd gambit

20 Jun 2024

Governor Pan Gongsheng hinted at a substantial revamp, including trading government bonds and simplifying interest rates. The changes will be a gradual process, but after having its wings clipped, they should help the central bank reassert its power in setting monetary policy.

UBS deal exposes Swiss trustbusters’ inadequacy

19 Jun 2024

Despite competition concerns, the $100 bln bank has escaped antitrust blowback from last year’s purchase of troubled Credit Suisse. Any doubt could have undermined the deal, and hence the rescue. But Swiss legal tools to monitor further competition risks look especially weak.

Citigroup makes unintended case for AI in finance

18 Jun 2024

The mega-bank has embarked on a PR blitz for its trade-finance business, which accounts for about half of earnings. Yet boss Jane Fraser’s persuasive plans are at risk from gaffe-prone staff and clunky systems. Tech that improves on humans and computers can’t come fast enough.

PAG’s downsized Asia fund could pay off handsomely

17 Jun 2024

China dealmaker Weijian Shan raised $4 bln for his firm's buyout fund, less than half the target, after refusing to cap exposure to the world's second-largest economy. He'll have more freedom than rivals to chase returns from discounted Chinese assets. That could be lucrative.

Japan’s value push is starting to lose momentum

14 Jun 2024

Notwithstanding big activist campaigns, tallies of shareholder proposals tabled for company annual meetings this month look underwhelming. The stock rally is fast fading too. Japan has a long history of disappointing investors. The stakes for how fund managers vote are rising.

Euro zone banks’ periphery premium is here to stay

13 Jun 2024

Lenders in Ireland, Italy, Greece and Spain on average trade with a 30% higher price-to-tangible-book value than French, German and Dutch ones. It reflects a reversal of fortunes between the old periphery and core – but also different business models, meaning the gap may persist.

Investors are hunting securitization’s oddballs

4 Jun 2024

Whether a bundt cake bakery or an internet address, if it generates steady cash, it can be diced up in the financial alchemy of securitization. In this Exchange podcast, Janus Henderson’s John Kerschner explains the promise and perils, and why the oddest assets can be the best.