StanChart’s chairman now comes in two parts 27 Jul 2016 IMF director Jose Vinals will head the UK emerging market bank’s board. Others too have hired chairmen from the public sector, but StanChart could use a seasoned banker to oversee the recovery of its commercial arm. New deputy Naguib Kheraj may have to do some heavy lifting.
Santander sprawl contains more ladders than snakes 27 Jul 2016 The Spanish bank is exposed to Brexit risk in the UK and a lacklustre home market. But a previous problem child, Brazil, has an improving outlook. The upshot - tolerably good returns and improving capital - make Santander's latest dividend hike just about justifiable.
Commerz capital rollercoaster goes into a dip 26 Jul 2016 The German bank’s closely watched capital ratio has fallen 50 bps to 11.5 pct. Low rates and sector-wide conduct fines are affecting the models that determine its solvency. At a time when banks are struggling to make money, well-meaning regulation acts as a further drag.
China insurers’ worst habits go almost unchecked 26 Jul 2016 The insurance watchdog is looking for trouble in the wrong places. It is warning over the industry’s riskiest investments from corporate raiding to big M&A. But it could do more to rein in the high-yielding products insurers offer that underpin the hunt for outsize returns.
Bankers will miss their Yahoo search queries 25 Jul 2016 It took an astounding seven separate financial advisers including Goldman Sachs and Guggenheim - and eight legal ones - to consummate the $4.8 bln sale to Verizon. A similar number helped other suitors, too. Wall Street may lament Yahoo's disappearance the most.
Carlyle’s dentist bond is full of cavities 25 Jul 2016 The private equity firm's bond for a British dentist chain sets new precedent in loose debt covenants. The UK vote to leave the EU has not tamed investors' animal spirits. With central banks promising ever looser policy, it's easy for issuers to extract generous terms.
Burst of UK takeovers may be a false signal 22 Jul 2016 Bids for British companies like ARM and Odeon have sent acquisition volumes surging in the weeks since the EU referendum. The weak pound is a factor, but these overtures were planned well in advance. Current executive gloominess implies dealmaking activity could soon dry up.
Republican donors reach for yield beyond Trump 21 Jul 2016 Wealthy hedge-fund bosses like Paul Singer and other Wall Street financiers wasted millions betting on candidates who lost to the real-estate mogul. Rather than back the GOP nominee, they're giving to congressional races instead. The risk-adjusted return could be higher.
Fat-tail US legal risk keeps Malaysian scandal hot 20 Jul 2016 The Justice Department has alleged over $3.5 bln was siphoned off from 1MDB. The legal details join the dots of the controversy, with plenty of colour. Everyone involved with the sovereign fund, from the Malaysian premier to Goldman Sachs, should feel uncomfortable.
Morgan Stanley gives investors whiff of ROE target 20 Jul 2016 A broad Q2 rebound put the Wall Street bank within spitting distance of rival Goldman's showing. With a lower tax rate, a plan to repay expensive debt and further cost cutting, James Gorman's firm should soon hit its lowly 9 pct return-on-equity goal - if revenue holds up.
Pimco’s new boss adds welcome pep 20 Jul 2016 Emmanuel Roman's contribution as head of Man Group was to make decent acquisitions and be a prominent figurehead. That should suit his new employer. There are deals to be done in asset management, and Pimco never quite filled holes left by Bill Gross and Mohamed El-Erian.
Wall Street whiplashed by Republican hypocrisy 19 Jul 2016 A push to return to the Depression-era law separating commercial banking from trading made the party platform in Cleveland. Meanwhile, an effort to dismantle Dodd-Frank is being led by a disciple of the senator who ended Glass-Steagall. Bankers are left to just shake their heads.
Slovenian twist puts Italy on straight and narrow 19 Jul 2016 Europe’s top court said Ljubljana was right to hit creditors when recapitalising banks. That’s unhelpful for Italian premier Matteo Renzi, who has banks to rescue but doesn’t want to punish their bondholders. He may have to play it straight, which would be no bad thing.
Goldman can take leaf from unlikely book: BofA’s 19 Jul 2016 Better trading and underwriting helped the bank's profit rebound, as did lower legal costs. Boss Lloyd Blankfein also reversed last year's poorly timed hiring spree. Even so, expenses kept its return below the cost of capital. Aping BofA's overhead shredding might suit Goldman.
Bank of America sets stage for a good run 18 Jul 2016 The laggard lender generated an annualized return on equity of just 6.5 pct, trailing rivals from Citi to JPMorgan. Boss Brian Moynihan nevertheless managed to grow book value most while keeping safe on credit. That's good news for shareholders, as long as returns can pick up.
Wells Fargo and U.S. Bancorp raise Citi bar higher 15 Jul 2016 Slowly recovering lenders often target a 10 pct return on equity, hoping to placate long-suffering investors. For Citi and others that only covers the cost of capital. Consistently cranking out more, as Wells Fargo and U.S. Bancorp just did again, is what turbo-charges valuations.
Deutsche Bank a decent flutter for Qatari royals 15 Jul 2016 Funds linked to Sheikh Hamad bin Jassim Al-Thani's family have upped stakes in Germany's largest bank to near 10 pct. The risk for "HBJ" is ongoing drab returns and the risk of further capital requirements. The opportunity is that Deutsche only trades at a third of book.
JPMorgan struggles to earn its keep 14 Jul 2016 The U.S. megabank run by Jamie Dimon cranked out a $6.2 bln second-quarter profit as lending and trading jumped. A utility-like 10 pct return on equity will probably beat most rivals but barely covers the firm's cost of equity. The banking industry needs to show it can do better.
Assault on UK privilege has many possible targets 14 Jul 2016 Theresa May wants to focus on more than the "privileged few". If Britain's new prime minister is serious, the most glaring disparities are in pensions, savings, housing and infrastructure. Action in these areas would go some way to healing north/south and young/old rifts.
Deutsche Boerse has case for go-slow on LSE merger 14 Jul 2016 Almost all the UK exchange group's shareholders voted in favour of merging with its German rival. Index funds are slowing Deutsche Boerse's process. Still, local takeover regulations and post-Brexit difficulties in selling the deal mean it's in DB's interests to take its time.