Investment Banking

Sberbank thrives amid sanctions and crisis

15 Nov 2017

Russia’s largest lender reported a 63 pct jump in third-quarter profit. The fallout from western sanctions has helped the state-owned bank consolidate market share, while recent bailouts boosted demand for its deposits. Sberbank will continue to benefit from uncertainty.

UK economy will share Theresa May’s pain

13 Nov 2017

The Prime Minister is facing growing challenges to her leadership from the ruling party’s pro- and anti-EU factions. Political disarray increases the risks that leaving the European Union will do serious economic harm. A softer Brexit is growing harder to deliver.

ECB haste risks slowing its bad-loan cleanup

10 Nov 2017

The central bank overstepped its authority with proposals to impose stricter rules on banks for non-performing loans, the EU’s parliament says. The ECB is right to target European lenders’ 840 billion euro mountain of bad debt, but its clumsy move may set back the effort.

Goldman imports Chinese money to lift U.S. trade

9 Nov 2017

The investment bank unveiled a plan to invest $5 bln in American manufacturers with Beijing sovereign fund CIC. In effect, pricey capital generated from trade deficits will go to help the heartland export to China. It's a rich idea to present an anti-globalist U.S. president.

Frumpy Commerzbank retains M&A allure

9 Nov 2017

Germany’s second-largest lender earned a pitiable 0.3 pct return on tangible equity in the first nine months of 2017. That explains why it trades at a fraction of book value. But rising customer numbers and hope of higher interest rates will continue to tempt potential buyers.

Intesa’s bank pruning carries a short-term sting

7 Nov 2017

Rescuing two beaten-down lenders dragged on the Italian bank’s bottom line in the third quarter. However, a 1.3 bln euro tax-free state fund will soak up the cost of branch closures and layoffs, while Intesa will keep the upside. It’s still an attractive trade-off for investors.

Broadcom deal cements boutiques’ M&A takeover

6 Nov 2017

Moelis is heading up the chipmaker’s $105 bln Qualcomm bid. It’s not the largest transaction an independent adviser has led, but it’s striking for one so dependent on financing. With smaller firms now prominent in most big deals, the bulge bracket risks becoming just dumb money.

Europe’s IPO failures are a problem overshared

3 Nov 2017

Two UK companies scrapped their offerings, while Russian power group En+ priced at the bottom of its range. Several recent listings have flopped in their first days of trading. The one thing still rising is the number of banks working on IPOs. That’s part of the problem.

Torpid Société Générale needs new ideas

3 Nov 2017

A downbeat third-quarter report sets the stage for the French lender’s investor day later this month. Boss Frédéric Oudéa steadied SocGen’s course following the 2008 crisis. Nearly a decade into his tenure as CEO, though, the bank is looking stuck in a rut.

Belt-tightening gives Tidjane Thiam breathing room

2 Nov 2017

The Credit Suisse boss delivered an 80 pct jump in third-quarter pre-tax profit despite lower revenue. An activist seeking to break up the Swiss lender can point to a misfiring investment bank. But cost-cutting and higher wealth management earnings give Thiam the upper hand.

StanChart has yet to reward shareholders’ patience

1 Nov 2017

Resurgence is proving more difficult than recovery for the emerging market lender. Chief Executive Bill Winters has returned it to profitability, but is struggling to boost income faster than costs. Still-low returns make restarting meaningful dividends a distant prospect.

HSBC investors to new CEO: more of the same please

30 Oct 2017

Rising Asian earnings lifted the lender’s underlying pre-tax profit by 8 pct in the first nine months of 2017. With a conservative loan-to-deposit ratio of 70 pct, incoming Chief Executive John Flint can afford to boost lending and look forward to fatter interest margins too.

UBS investors benefit from smaller investment bank

27 Oct 2017

An inflow of cash from wealthy clients helped boost the Swiss lender’s pre-tax profit by 39 percent in the third quarter. UBS also profited from the lack of big trading operations which have hobbled some rivals. Shareholders stand to be rewarded with a higher annual dividend.

RBS’ next tempest beckons as past storms subside

27 Oct 2017

The state-owned lender is resolving litigation and other hangovers from the 2008 crisis. It is still barely profitable, but third-quarter results suggest it might one day cover its cost of capital. A rich valuation, however, pays little heed to the risk of a Brexit-induced slump.

Mediobanca can surf Italy’s bad-debt wave

27 Oct 2017

The Italian bank’s net profit jumped 11 percent to 301 mln euros in the three months to September. There are more reasons to cheer. A deeper cleanup of the country’s small lenders will trigger bad-loan sales, share issues, and more mergers. Mediobanca can profit from all three.

Hadas: Greed is best indicator of financial crisis

26 Oct 2017

New research casts small-time property investors as the secret villains in the 2007 U.S. house price collapse. As usual, the love of leverage was the root of financial distress. Balance sheets are stronger today, but investors still haven’t learned the virtue of moderation.

Banks draw short straw from ECB

26 Oct 2017

The central bank will trim its monthly bond purchases but promised to keep buying for longer. That balances the demands of those who oppose money printing with the wishes of rate-setters who fear growth is still fragile. The losers are banks, whose negative rate pain will endure.

Lazard is the best of an unlikely listed bunch

26 Oct 2017

The merger-advisory firm’s quarterly revenue beat expectations. The spread between rivals who are doing well and those who aren’t, like Greenhill, is widening. But it’s not clear why investors should want to own shares in such choppy businesses, or why boutiques really need them.

Jes Staley gets no due for new-look Barclays

26 Oct 2017

The UK bank’s boss heralded the end of major restructuring on Oct. 26. Investors – who sent the shares down 7 percent on weak third-quarter results – aren’t convinced. At a deep discount to book value, Barclays offers decent upside if Staley can hit his modest return targets.

Sliding investment bank pressures Deutsche CEO

26 Oct 2017

The German lender’s net revenue dropped 10 percent in the first nine months of 2017, led by sharp declines in trading fixed income and currencies. While cost-cutting limited the damage to the bottom line, boss John Cryan’s turnaround strategy depends on a recovering top line.