Investment Banking

EU deposit freeze idea is counterproductive

31 Jul 2017

A proposal to stop customers’ withdrawing funds from a failing bank is under discussion. That may give regulators more time to work out a stricken lender. But extending the scheme to insured depositors would only make retail clients jumpier and bank failures more likely.

Barclays gets scant credit for new trimmer figure

28 Jul 2017

The bank is retreating from Africa, shrinking quickly to focus on its core business and has a new returns target of 10 percent. There’s no timeframe to hit the goal, which may explain why shares are trading well below book value. CEO Jes Staley can fix that by losing more fat.

Thiam has yet to move Swiss banking mountains

28 Jul 2017

The Credit Suisse boss has made the bank much more like its wealth management-heavy rival UBS. Yet his returns are less than half as good, and investors see it in second place. Lingering unwanted assets are one reason. The lender’s past U-turns in strategy may be another.

M&A shops become Wall Street’s new black boxes

27 Jul 2017

Lazard, Evercore and Moelis beat earnings estimates by wider margins than their bulge-bracket peers. Yet advice ought to be easier to track than trading. That suggests the problem lies with an under-resourced sell-side. Investors, though, appreciate the boutique business model.

Politics are a bar to faster AIB selldown

27 Jun 2017

Shares in the Irish bank rose 8 percent after a heavily oversubscribed IPO. The government - still the lender’s majority owner - may be tempted to rethink a self-imposed cap on how fast it can offload its remaining stake. But political wrangles make a speedy exit unlikely.

Italian bailout is setback for Europe bank regime

26 Jun 2017

Intesa Sanpaolo is taking over the good bits of two smaller failed lenders, leaving taxpayers to foot a bill of up to 17 billion euros. Protecting savers is politically expedient. But the rescue exposes a gaping hole in Europe’s new regime for dealing with troubled banks.

Brexit one year on: an alternative history

23 Jun 2017

It has been a year since Britain voted narrowly to remain in the EU, a (fake) bank CEO writes in a memo to staff. Few expected uncertainty would linger so long after the referendum. Austerity and populism point to challenges in the UK. Thankfully, the euro zone looks attractive.

Cox: Milan is dark horse in post-Brexit bank race

22 Jun 2017

The city that taught London about lending lags Paris and Frankfurt in pitching its appeal as a financial center. Fashionable lateness is a Lombard charm. So are fine universities, clever financiers, tax incentives, a strong work ethic – and easy access to beaches and mountains.

Europe’s next bank rescue may be Italian fudge

8 Jun 2017

Italy’s big banks may pump 1.2 bln euros into small lenders to help enable a government rescue. The banks see a bailout as the least bad option. Yet after the failure and resolution of Spain’s Banco Popular, it’s a backward step that punishes good banks for the sins of others.

Spanish bank rescue poses several big questions

8 Jun 2017

Seizing Banco Popular and selling it to Santander averted a panic without a bailout. But it’s not clear how regulators calculated the hole on the lender’s balance sheet, or why they previously deemed it solvent. Investors need answers to have faith in Europe’s resolution regime.

Macron has chance to make France a better investor

8 Jun 2017

President Emmanuel Macron wants to use some of the shares the state owns to finance an innovation fund. That’s tinkering at the margin. The Republic is too activist a shareholder in some cases, too passive in others. Better to fix clearer goals for a totally revamped portfolio.

Barclays faces unfamiliar issue: excess capital

1 Jun 2017

The UK lender is offloading all but 15 pct of its African unit for $2.9 bln after strong demand from investors. The sale should lift its capital ratio above 13 pct. After a year of retrenchment CEO Jes Staley can begin to think about how the slimmed-down bank can reward shareholders.

Western banks are a poor home for Asian billions

16 May 2017

If sovereign funds are meant to generate superior returns over generations, the sale of UBS shares by Singapore’s GIC is logical. Banks’ futures are clouded by technology, disintermediation and populism. Those still building stakes, like China’s HNA, may have other goals in mind.

It isn’t easy being Barclays’ Jes Staley

12 May 2017

The UK bank chief is yet again in the spotlight after falling for an email spoof. After recent controversies involving whistleblowers and the blurring of work and outside interests, he is no doubt walking on eggshells. Breakingviews imagines a typical day.

Italian banks offer way to play Macron boost

11 May 2017

Both Credit Agricole and UniCredit beat first-quarter expectations and have more to come. Yet the French bank trades above tangible book value, while its Italian peer languishes. If the new president reforms both France and Europe, UniCredit’s shareholders could get more upside.

Morphing Macquarie powers ahead

5 May 2017

The Australian bank is a master of reinvention, relentlessly encouraging its financiers to move sideways into profitable new ventures. The result is record full-year earnings of $1.6 bln, a fat return on equity, and stock at 10-year highs – with a rich valuation that is justified.

French banks’ foreign strength cuts both ways

4 May 2017

Strong first-quarter growth in BNP Paribas and SocGen’s foreign markets offset weaker showings at home. Still, SocGen’s 963 mln euro Libyan settlement shows how overseas adventures can go awry. And if Sunday’s election delivers a surprise, French banks face redenomination risk.

Credit Suisse bonus vote exposes two problems

28 Apr 2017

Two-fifths of shareholders at the bank’s AGM rejected its short-term bonuses. Yet 91 pct approved the reappointment of Chairman Urs Rohner. Credit Suisse lacks two things a good company needs: a chair who holds the CEO to account, and investors who kick up a fuss if he doesn’t.

UBS valuation lead over Barclays looks too wide

28 Apr 2017

The Swiss bank trades at 1.3 times tangible book value, while its UK peer languishes at 0.7 times. First-quarter results, which saw UBS beat expectations and Barclays disappoint, support investors’ logic. But Barclays is on the mend, while wealth management is not trouble-free.

RBS return goal hinges on ambitious cost cuts

28 Apr 2017

The state-owned UK bank reported its first quarterly profit since 2015. To reach its target of a 12 pct return on tangible equity by 2020, however, it will need to push through further savings. Given many of the obvious efficiencies have been found, that seems a stretch.