Investment Banking

Deutsche Bank shares are cheap for a reason

27 Apr 2017

The German lender's investment bank had weaker first-quarter revenue growth than peers. Deutsche has raised capital, cut costs and survived a torrid 2016. But the more the top line struggles, the tougher it will be to get its valuation above book value.

Lloyds hits peak Horta-Osorio

27 Apr 2017

The UK bank is outperforming on things investors care about: costs, net interest margins and capital generation. Its recovery under boss Antonio Horta-Osorio has been impressive. From here, his efforts start to matter less in relative terms than what happens to Britain’s economy.

Credit Suisse’s Thiam picks capital over returns

26 Apr 2017

The bank’s CEO has rightly opted to raise $4 bln in a rights issue, ditching a plan to list its Swiss unit. Strong first-quarter earnings mean he is doing so from the front foot. But an uncertain outlook poses questions over when Credit Suisse can make an economic profit.

StanChart’s springtime revival is premature

26 Apr 2017

A sharp drop in bad loan charges helped the emerging market bank double pre-tax profit in the first quarter. Revenue growth was less impressive, though. Shaky assets and intense competition mean the lender is still some way from hitting CEO Bill Winters' modest return target.

How tech pushed finance into a status crisis

21 Apr 2017

Top programmers are outdoing dealmakers in pay, rivaling them in political clout and even stealing their reputation for hard graft. Cue hand-wringing from banks worried about retaining the brightest and best. They shouldn't worry: post-status industries make for better employers.

Deutsche offers investors a too-big-to-fail test

21 Apr 2017

The German lender’s latest U.S. regulatory thwack comes as it asks creditors to swap bail-in bonds for SEC-registered ones with clearer terms. It implicitly tests Berlin’s model for resolving banks. It’s also a reminder of the benefits Deutsche gets from being a global bank.

Credit Suisse pay retreat puts chairman on spot

18 Apr 2017

The Swiss bank has bowed to investor pressure by proposing cuts to 2016 bonuses awarded last month and a cap on payouts for this year. New say-on-pay rules necessitated the climbdown. The episode shows an embarrassing lack of foresight by the board and Chairman Urs Rohner.

M&A code names can be a warning in themselves

13 Apr 2017

Bankers and companies chose "Star Wars" and "Game of Thrones" references, among others, as cryptic project titles to shield deal talks. Their choices reveal much about their own hubris. To Breakingviews' ears, some popular names seem particularly apt for certain transactions.

Cowen’s China play involves more than just money

29 Mar 2017

Peter Cohen’s banking boutique is selling a stake to energy group CEFC China and raising $275 mln. Cowen needs capital to keep growing and its partner’s modest securities business could use expertise. Unlike some recent China-U.S. finance deals, the logic here just might add up.

Chinese broker offers investors a fair IPO trade

27 Mar 2017

Guotai Junan Securities is selling Hong Kong stock at a 25 pct markdown versus its mainland shares. That should be enough to entice buyers to the $2.1 bln offer. Investors would purchase one of China's strongest brokers, and at a bigger discount than the wider sector.

Big brokerage IPO requires faith in Chinese reform

22 Mar 2017

Guotai Junan Securities is poised to raise $2 bln in Hong Kong. The sector is crowded, margins are thin, and regulators are fickle. But Guotai's scale and breadth position it well to benefit from more liberalisation and better enforcement.

HSBC’s new chairman ticks the right boxes

13 Mar 2017

The emerging markets bank has picked AIA boss Mark Tucker to succeed Douglas Flint. He brings deep understanding of Asia, good contacts with regulators, and finance sector knowledge. As the first external chair in HSBC’s 152-year history, he will need all those skills – and more.

Aramco fails to make a mountain out of Moelis

8 Feb 2017

The boutique's role advising the oil giant's mooted IPO added over $100 mln to its market value. That may seem like a big jump off one mandate. The opposite could be true though – investors may be underestimating the boost to Moelis's stature from its trophy deal.

China bankers: an asset with diminishing returns

9 Feb 2017

Mainland rainmakers are becoming a headache. Global banks still need them to navigate China’s corporate waters. But sudden disappearances of corporate and financial tycoons make high-flying staff a risky commodity. Compliance costs are rising, while their potential is shrinking.

China shows U.S. banks self-serving generosity

7 Feb 2017

JPMorgan and Citi have won coveted licences in China's onshore bond market. China's real goal might be to get inclusion in global bond indexes, which would bring stable foreign investment. But restrictions on capital flows make such bonds less appetizing than they could be.

China’s traders at sharp end of bonus season

2 Feb 2017

A big drop in stock-market volumes after 2015's crash means many brokerage staff are braced for big bonus cuts. Off the trading floor, life looks a lot better, with share sales and overseas deals breaking records. But the M&A boom is already losing steam, too.

Luck, and design, help Nomura near foreign goal

1 Feb 2017

The Japanese bank is nearing an important milestone: its first annual pre-tax profit overseas since buying bits of Lehman Brothers. The success is due partly to choppy bond and forex markets. Nomura's own cost cutting also helped – and puts it on a sounder long-term footing.

Banks whiplashed by Asia’s distrust of hot money

9 Jan 2017

Indonesia plans new rules to ensure research is "factual", after a downgrade led it to cut ties with JPMorgan. Malaysia is clamping down on currency trading. The moves only highlight Southeast Asia’s vulnerability to capital flight rather than the region's impressive growth.

Sinopec gears up for another round of expansion

16 Dec 2016

China's $100 bln energy titan is selling assets to bolster its balance sheet and replace reserves as oilfields generating over half its economic profit age. The state group blew $45 bln in its last spending spree before oil prices cratered. Perhaps it has learned its lesson.

Goldman adds a splash of color to executive ranks

14 Dec 2016

Two bald white male vets will replace Gary Cohn, the bald white president who won't replace Lloyd Blankfein, the bald white chairman and CEO of the bank. So the appointment of Martin Chavez as CFO stands out in many ways – jokes aside, mainly for his entrepreneurial background.