Dominic is a London-based columnist covering investment banking. Prior to Breakingviews, he spent two years at moneydealer ICAP, where he brokered equity derivatives trades between investment banks, high-frequency trading firms and hedge funds. He has more than five years of financial journalism experience, including stints as news editor and investment banking editor at Financial News. He has also written for The Wall Street Journal Europe. Dominic holds an MA in Classics from Oxford University and an MSc in Development Management from the London School of Economics. Follow Dominic on Twitter @DominicElliott
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Activist Knight Vinke says the Swiss group’s investment bank gets unfair funding subsidies from wealth management. But the cost of spinning it off could offset a valuation bump for the remainder. With returns up and dividends resurgent, UBS’s current strategy looks a surer bet.
The French bank is acquiring energy and metals trading positions from Jefferies. Higher capital charges and deleveraging have seen peers, apart from Citi and Goldman, shrink their activity. But clients still need to hedge exposures – and business may slowly be ticking up.
Banks’ wholesale units are destroying value. To lift returns they must cut costs, raise revenue and boost capital – while avoiding big fines. If firms can do that, a Breakingviews calculator suggests the biggest ones could exceed a combined 12 percent return on equity by 2017.
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