Journalists
Jeffrey Goldfarb writes about investment banking and the financial sector. Jeff joined from Reuters in London, where he oversaw European corporate finance coverage. Before that, he led Reuters' reportage on the European media sector, and previously wrote about M&A in New York. From 1993 to 2001, Jeff covered legal and regulatory news for BNA Inc. in Washington, DC, Phoenix and New York. He is a graduate of the Columbia University Graduate School of Journalism and the George Washington University.
Until now, they’ve largely shrugged at how much of revenue firms pay staff. At last, some Goldman investors are carping for lower bonuses and higher retained earnings – to drive up the share price. The added political storm makes it a perfect time for banks to revisit the model.
The Swiss bank has been stabilised and new boss Oswald Grübel is now setting targets. He reckons UBS can get back to its 2006 profit levels in three to five years. But the rebound hinges on fixed income, which buckled the bank. No wonder investors are wary of pricing in success.
When the revered Swiss banker took over at UBS earlier this year, his grim outlook was partly dismissed as mere expectations management. But a weak Q3 bears him out. Even UBS strongholds wealth management and equities suffered. The shares don’t reflect Grübel’s continued caution.
Former Thundering Herd wrangler Bob McCann arrives with impressive credentials but a big challenge. Even he isn’t expecting more than modest profitability. That might be sufficient to ensure independence, or a sale, of the broker – even if McCann says it’s not the goal.
The Swiss bank smashed expectations with dazzling Q3 figures. Risk fell, return on equity rose to an industry-leading 25% and pay was cut in response to lower fixed-income revenue. But the shares have reacted warily for a reason: the valuation holds little margin for error.
The Swiss bank, lately forward thinking on pay, has moved first to set out details based on G20 guidelines. Higher base salaries might raise eyebrows and upside on deferred cash seems a bit rich. But clawbacks and the use of return on equity as a benchmark make good sense.
The BofA chief will take a goose egg for 2009 pay and bonus – and return $1m of salary. That’s probably the least he can do after some disastrous acquisitions. While the new world may be tougher, it still has its comforts. Lewis is set to leave with a lucrative pension pot.
The £2bn value JPMorgan is placing on their joint venture implies the storied UK firm’s bankers are worth £3m each. That’s far more than those at Warburg, Schroders or Fleming commanded. The Cazenove name will survive for now but this generous deal may not preserve its legacy.
The Swiss bank’s boss has more authority than most investment-banking chiefs. He has been a sound leader, and his firm’s reputation has held up. But Dougan’s diffidence has left the defence of the industry to self-appointed ambassadors with more confidence but less credibility.
The German giant’s latest results don’t reflect its supposed winner status. Deutsche may be capable of making diversifying acquisitions, but its investment bank isn’t outpacing rivals. It also remains curiously stubborn on capital. Deutsche is paying the price with its valuation.
The Dutch group is finally separating insurance from banking, and restructuring further by selling its US online arm. A E7.5bn rights issue will repay half the state’s capital and secure loan-loss insurance. These are radical shifts. Tough times have set ING on the right path.
The German bank has pre-announced Q3 figures that look impressive but which are flattered by unexpected tax gains. The market has frowned, perhaps anticipating a capital hike ahead of two deals. Given Deutsche's previous reluctance to tap markets, the fears may be unfounded.
Not the art of trading, deals or lending, but the paintings decorating hallways or clogging storerooms. Deutsche, JPMorgan and UBS own 130,000 works. Their collecting urge is hard to explain – or justify. Taxpayers are helping banks so much. They should get to see the pictures.
The legendary dealmaker put an indelible mark on the firm in his seven years at the helm. Wasserstein’s outsize persona helped unite the divided house and push it from private to public. But a firm that has lasted 161 years can sustain the loss of even the most standout banker.