Blackstone’s cash pile will buy only so much time 18 Apr 2024 The investment giant is reaching into its $200 bln war chest, but selling less. Higher-for-longer rates also threaten to slow down deals. A protracted mismatch would sharpen the divide between fund backers focused on profit and shareholders benefiting from capital deployment.
Wells Fargo has worn its dunce cap long enough 18 Apr 2024 In 2018, the US bank was banned from growing beyond $2 trln in assets as punishment for its flagrant customer abuses. Even if warranted, the Fed’s decision has led to market distortions. It’s time to scrap the limit, explain why it remains, or – if the rot persists – get tougher.
Gulf bank’s M&A hunt risks shareholder injury 15 Apr 2024 First Abu Dhabi, worth $40 bln, may be eyeing Turkish lenders following a short-lived pursuit of Standard Chartered. An overseas deal would help to diversify away from corporate and investment banking, but the cost savings look slim. Better to focus on growing at home.
MUFG and Indian credit scratch each other’s backs 15 Apr 2024 Taking a $2 bln stake in an Indian shadow lender backed by HDFC would be punchy at five times book value. Still, the South Asian country's non-banks are growing super fast. Japan's financial institutions aren’t waiting around for a payday at home from rising borrowing costs.
Société Générale CEO is pruning a decaying tree 11 Apr 2024 Slawomir Krupa agreed to sell an equipment-financing unit to local French rival BPCE for 1.1 bln euros. It’s a good price, and Krupa is right to clear out peripheral assets that languished under his predecessor. The problem is that the bank’s core isn’t alluring either.
Swiss too-big-to-fail rules are too timid to work 10 Apr 2024 Following the Credit Suisse disaster, Finance Minister Karin Keller-Sutter will give the country’s bank regulator more teeth and raise capital requirements for $100 bln UBS. It all helps. However, there’s no sign authorities will be any more willing to wind down a big bank.
Jamie Dimon sends missive from political Neverland 8 Apr 2024 The JPMorgan boss’s annual letter is a manifesto for the middle. From climate to regulation, diversity to deficits, he argues for keeping the US on top and markets working - but no more. It’s a vision a shareholder should love. But this fairytale centrism is not on the ballot.
Central banks’ noise helps dollar – and Joe Biden 28 Mar 2024 In February, traders’ hopes of rate cuts by the Federal Reserve sent the currency lower. But it has risen 1.8% in March, partly due to policymakers’ mixed messages. Until the fog clears, the greenback will rule forex markets. That curbs US inflation and may benefit the president.
Sergio Ermotti has a path to Wall Street-style pay 28 Mar 2024 UBS handed its CEO $16 mln for nine months’ work last year. That’s more than his European rivals, but less than the bosses of US lenders like Morgan Stanley, whose valuation the $100 bln Swiss bank aspires to. Tweaked terms next year give Ermotti a chance to narrow the gap.
Credit card suit takes swipe at perks programs 27 Mar 2024 A $30 bln settlement in a decades-old lawsuit will compel payment networks Visa and Mastercard to let retailers charge customers more to use certain cards – and to tell them why. As shoppers take notice, they may cool on fancy rewards programs.
Big banks’ shock absorbers are still far too slim 26 Mar 2024 Credit Suisse and a string of US regional banks failed last year. In this Exchange podcast, Stanford Professor Anat Admati argues that lenders’ equity buffers are punier than they seem – and that fixing the problem needn’t cause a credit crunch.
Bank crises proved a mixed blessing for rivals 21 Mar 2024 It’s 12 months since Silicon Valley Bank failed and Credit Suisse collapsed into the arms of UBS. In this Viewsroom podcast, Breakingviews columnists explain how bigger banks gorged on these lenders’ carcasses – and how the system’s underlying weaknesses have not gone away.
US nudges EU banks toward clean break with Russia 20 Mar 2024 Austrian lender Raiffeisen dreamt up a $1.6 bln plan to salvage value from its Moscow-based unit. But Washington dislikes it, Reuters has reported. For European banks, upsetting the US could ultimately be more damaging than the write-offs from a speedy Russian exit.
Credit Suisse carcass feeds many hungry mouths 15 Mar 2024 In the year since it collapsed, competitors have carved up the Swiss bank’s employees and clients. UBS grabbed most of the spoils, but Santander, Deutsche Bank and others have also moved in. Lasting benefits, though, depend on survivors showing restraint when activity picks up.
Bill Winters pulls a poor man’s Jamie Dimon 13 Mar 2024 The frontrunner to succeed StanChart's CEO has abruptly left the bank. JPMorgan's boss is adept at ousting executives, Winters included, but Dimon has earnings and investors on his side. Winters wants for the latter. The lack of a clear heir is now another worry for the board.
Generali has some scope to think bigger on M&A 12 Mar 2024 Under CEO Philippe Donnet, the $38 bln insurer did smallish deals. Targeting big players like $16 bln Aviva, to shrink a gap with rivals, may require clashing top investors to back an equity hike. But Generali could also fund a large buy by running down its chunky capital buffer.
Hostile bidders run into a credibility crunch 11 Mar 2024 Retailer Macy’s and hunting-gear maker Vista Outdoor are resisting uninvited $7 bln and $3 bln buyouts, arguing that the funding is flimsy. Higher interest rates indeed make life harder for suitors. Both proposals, however, look carefully calibrated to reflect the times.
Simmering M&A gumbo lacks essential ingredients 8 Mar 2024 Dealmakers cooked up more than $520 bln of mergers during the first two months of 2024, up 75% from last year’s ultra-sluggish start. Financial and legal advisers gathered in New Orleans are still stewing, however. For them, the recipe calls for some Fed and private equity spice.
Lower rates, office return will ease property pain 7 Mar 2024 The post-pandemic boom in hybrid work is causing trouble for banks that have lent heavily to office developers. But in this Viewsroom podcast, Breakingviews columnists explain how losses may be limited if central banks bring borrowing costs down and bosses call employees back.
A year on, SVB’s killer is still at large 7 Mar 2024 Twelve months after Silicon Valley Bank’s demise, investors worry more about real estate than flighty depositors. The disjointed system that enabled a crisis remains intact, though, with patchy oversight, incomplete safety nets and ambiguity over who loses if a lender fails.