Loans

China’s surprise reserve cut exposes growth angst

17 Apr 2018

The central bank cut reserve requirements for banks, freeing $200 bln for lending. That backs up other moves to help over-stretched banks amidst a purge on loose credit. The timing, however, suggests Beijing is looking for a cushion if the economy slows, or a trade war escalates.

Intesa offers partial hope for Italy’s dud loans

17 Apr 2018

The Italian lender is nearing a deal with Swedish group Intrum to shed 10.8 bln euros of dodgy loans from its balance sheet. Domestic peers will be cheered by the price, which is higher than rivals have attained in similar transactions. Then again, Intesa is a better bank.

Zambia debt dispute undermines African credit

17 Apr 2018

The copper producer has denied it has dollar debt beyond its $8.7 bln of foreign borrowing. Its vague clarification comes two years after a $3 bln bond scandal in neighbouring Mozambique. Bilateral lending, particularly from China, is blurring the credit picture across Africa.

SoftBank financially engineers banking gravy train

9 Apr 2018

An $8 bln loan backed by Alibaba shares is the latest wizardry from boss Masayoshi Son. A bevy of banks signed up for a client who has spent $750 mln on fees since 2015. The hyperactivity, ambition and assets mean SoftBank can get support for even the most fiendish of ideas.

Cox: A beneficent billionaire should buy Remington

27 Mar 2018

The AR-15 maker filed bankruptcy papers a day after millions of Americans marched in favor of banning its products. Owners and creditors just want out in a hurry. But Bloomberg, Gates or Bezos could turn Remington into a force for sensible gun policies with mere pocket change.

Asia’s banks leave room for debt funds to thrive

21 Mar 2018

Traditional lenders neglect many smaller borrowers in the region. But while they are weighed down by bad loans and tough regulation, that creates a gap for new providers. Private debt funds are benefiting from limited competition and better bankruptcy regimes too.

Chinese micro-lender’s $100 bln dream is a stretch

12 Mar 2018

Qudian’s founder CEO Min Luo will forgo his salary until the $5 bln firm tops a $100 bln valuation, bigger than backer Ant Financial. That’s unrealistic for a company trading below its New York IPO price in an industry under intense scrutiny – unless its shareholder turns buyer.

Intesa dividend pledge depends on Italian growth

6 Feb 2018

The country’s biggest bank promises 6 bln euros of net profit in 2021 thanks to a push into wealth and insurance products. If CEO Carlo Messina keeps his word, payouts to shareholders over the next four years will be 50 percent higher. But only if there are no upsets at home.

Car lenders’ real risk is fines, not writedowns

15 Jan 2018

The rapid growth of UK auto finance has led to a glut of shiny new motors and twitchy regulators. Banks and carmakers can absorb a hefty drop in used-car prices. The bigger hazard is that lenders may cut corners to keep the market ticking over and end up paying conduct fines.

Corporate loans can propel Europe’s bank recovery

15 Jan 2018

Lending to companies has seen minimal growth in recent years, official data shows. A raft of positive economic data should provide the catalyst for increased demand. It would be a welcome way for slimmed-down lenders to give revenue a leg-up.

Markets start doing Mario Draghi’s job for him

12 Jan 2018

The euro hit three-year highs and government bond yields rose after a hint the ECB boss may rethink how long ultra-loose policy will last. The moves amount to tighter monetary conditions. That buys rate-setters time to phase out negative rates even though growth is picking up.

Intesa can afford to speed bad debt cleanup

11 Jan 2018

Italy’s biggest retail bank may sell up to 15 bln euros of sour loans. It looks like a reversal of boss Carlo Messina’s plan to keep bad debts rather than sell them cheaply. But Intesa can take the hit and, with regulators bearing down on dud assets, a quick exit makes sense.

Fortress gives Apollo tough subprime bar to hurdle

4 Jan 2018

At $1.4 bln, Leon Black’s outfit is buying a stake in consumer lender OneMain at half its value two years ago. Yet the SoftBank-owned investment shop still bags more than a 10-fold return from the sale thanks to buying at the bottom. Apollo will have to be content with much less.

U.S. debut restores faith in Chinese micro-lender

22 Dec 2017

LexinFintech slashed the size of its IPO and priced the deal at the low end, amid a crackdown on online lending. That was enough to get the flotation away and spark a healthy first-day rise of nearly 20 pct. The $1.7 bln firm now has a chance to grow into a higher valuation.

China credit move a plus for twitchy web lenders

29 Nov 2017

The web finance watchdog will create a credit rating platform with private companies including Tencent, says China Daily: a healthy development in a messy industry. But forcing big players to share too much proprietary data could dilute competitiveness and discourage innovation.

Fed eggheads scramble online-loans takedown

22 Nov 2017

Analysts at the central bank’s Cleveland unit had to pull a study claiming peer-to-peer lending was highly risky after its data was questioned. It’s a tricky sector to define and worsening consumer credit is a concern. But the Fed’s hasty conclusion tarnishes its own reputation.

Chinese micro-lender has big problems

22 Nov 2017

Beijing is clamping down on online outfits that issue small-ticket loans to Chinese consumers. The regulatory uncertainty has spooked investors in the rapidly growing industry. It is another reason why New York listing hopeful LexinFintech may have a tough ride.

China shadow banks feel stronger central bank grip

20 Nov 2017

Beijing has put fresh restraints on the $15 trln market for asset management products, a useful but risk-prone part of the financial system. The rules will squeeze profits at those lending to rickety clients. They show the central bank's growing authority over other regulators.

Broadcom lenders shed prudence just as it’s needed

6 Nov 2017

The chipmaker’s advisers are “highly confident” of arranging finance for its $105 bln Qualcomm bid. Ample liquidity, low defaults and easing regulations have banks itching to lend. But rising corporate leverage and looser covenants pose big risks for anyone coming to the dance.

UK student loan sale has costly Corbyn hedge

31 Oct 2017

Britain is pushing ahead with the sale of 4 bln pounds of loans, despite Labour leader Jeremy Corbyn’s promise to ease student debt. Investors will get compensation from a complex scheme if government policy changes. That further strains the logic of the sale.