Investment Banking

China banks’ $900 bln buffer offers sham comfort

7 May 2024

That’s roughly how much special debt the country’s five largest lenders must raise to obey global rules for absorbing large-scale losses. It’s an improbable scenario in China’s state-controlled financial system. For the banks, extra funding costs add to a long list of headaches.

Macquarie bets its disappointing year is a blip

3 May 2024

The $47 bln investment bank handed investors their worst return on equity in more than a decade as earnings fell by a third. Yet it kept pay and other expenses flat. Previous years' impressive results give CEO Shemara Wikramanayake some breathing room before having to cut costs.

Republic First is the good kind of bank failure

29 Apr 2024

The shuttered lender was low on equity and high on drama, home to years of lawsuits and board fights. Even with familiar balance-sheet issues, there’s little risk of knock-on effects elsewhere. Bank windups are working - though judging by placid depositors, maybe a bit too well.

Vote no to bashing proxy advisers

25 Apr 2024

Corporate leaders at JPMorgan and AstraZeneca bridle when ISS and Glass Lewis criticize their governance. No wonder: Some high-stakes shareholder votes this year will be uncomfortable for feather-bedded bosses. Proxy firms are problematic, but they do more good than harm.

Blackstone’s cash pile will buy only so much time

18 Apr 2024

The investment giant is reaching into its $200 bln war chest, but selling less. Higher-for-longer rates also threaten to slow down deals. A protracted mismatch would sharpen the divide between fund backers focused on profit and shareholders benefiting from capital deployment.

Austerity is a bad economic answer at a worse time

16 Apr 2024

While the global economy is running hot right now, the International Monetary Fund warns that long-term growth will be below its 3.8% pre-pandemic trend. The problem is, a familiar prescribed fix of budget cuts and high rates has failed in the past and would do so again today.

Goldman’s plan B unexpectedly upgraded to a B-plus

15 Apr 2024

A bond-trading surge helped lift quarterly earnings at David Solomon’s firm to $4.1 bln. Investors prefer stabler revenue sources, and Goldman’s pitch that markets activity is less volatile is born of necessity. Still, it helps that traditional banking has lost some shine.

Gulf bank’s M&A hunt risks shareholder injury

15 Apr 2024

First Abu Dhabi, worth $40 bln, may be eyeing Turkish lenders following a short-lived pursuit of Standard Chartered. An overseas deal would help to diversify away from corporate and investment banking, but the cost savings look slim. Better to focus on growing at home.

JPMorgan wrestles with the tyranny of expectations

12 Apr 2024

The biggest US bank is avoiding being pinned down on where the economy will go next. Problem is, that’s now the overwhelming focus for investors gauging the banking business. Boss Jamie Dimon only stands to lose from staking a position. The best he can do is plan for the worst.

Market forces knock ominously on US realtors’ door

12 Apr 2024

Home buyers will soon find it easier to negotiate fees they pay to 1.5 mln agents – a move that might have happened earlier in a less distorted market. Some brokers will earn more. But the reforms are likely to shrink the fee pool, which is tricky for ancillary firms like Zillow.

Big banks turn inflationary lemons into lemonade

11 Apr 2024

Stubbornly high consumer prices may delay US monetary easing, a boost to lenders like JPMorgan or Citi that thrive amid high rates. Further relief could come from the dilution of tough new capital rules. For smaller banks, exposed to stressed borrowers, life tastes more sour.

Blackstone cures two ailments in one Moderna shot

27 Mar 2024

Higher costs of capital are pressuring CEOs into tough spending decisions, while buyout shops flush with cash want to deploy it. This dynamic makes a $750 mln deal to fund a biotech project a crafty solution. The hard end of the bargain: ceding value from promising flu research.

Japanese investors becoming the life of the party

21 Mar 2024

ValueAct, Elliott and Berkshire Hathaway have deployed some $16 bln to uncover value in Tokyo-listed stocks. They’re receiving warmer welcomes than raider T. Boone Pickens did in 1989. Even better, the US trio’s success is helping inspire local funds to sustain the momentum.

How to sustain the big rebound in dealmaking

12 Mar 2024

The year kicked off with a 75% increase in global M&A activity, to $525 bln. Speaking to The Exchange podcast from a gathering of merger mavens in New Orleans, Evercore banker Bill Anderson discusses the resurgence and what’s needed to keep the momentum after a two-year slump.

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.

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.

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.

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.