Fat VW bonuses merited – but only after its rescue 8 Apr 2016 The stricken carmaker’s top brass is insisting on 2015 bonuses, German media report. Boss Matthias Mueller and his peers indeed deserve to be paid well – but only if and when they have saved VW from an existential crisis. Deferring variable pay would be a fair compromise.
Spain’s bank branches need more aggressive pruning 8 Apr 2016 Santander is closing 450 outlets and laying off staff. Low interest rates and shrinking loans put strain on an overbanked Spain. Since consolidation is unlikely amid political stasis, other banks will have to follow Santander and wield the shears themselves.
Monsanto CEO puts M&A-addicted peers to shame 7 Apr 2016 Hugh Grant walked away from buying pesticide company Syngenta last year rather than overpay. Now he’s swearing off the biotech seed maker doing big deals. Choosing organic growth over ill-fitting, frothy tie-ups is a smart move that more bosses ought to put on their to-do list.
How to dodge pitfalls of market Brexit signals 7 Apr 2016 Currency, bond, stock and credit markets reflect investors’ concern that Britain could leave the EU, but the links aren’t simple. Price signals will become purer closer to the June 23 referendum. Before then, interpreting their message requires a bit more care.
Loser from Dutch referendum: referendums 7 Apr 2016 Voters in the Netherlands rejected a Ukraine-EU trade deal. The economic fallout is tiny compared with what’s at stake in Britain’s EU referendum. Still, it’s a reminder that such plebiscites are too often hostages to voter apathy and discontent about unrelated issues.
Italian ad-hoc bad bank part bailout, part fiasco 7 Apr 2016 Italy is corralling lenders, charitable trusts, and state bank CDP to backstop a capital raise for Banca Popolare di Vicenza, which might otherwise have ended up on UniCredit’s books. They probably won’t make a good return, but with a crisis looming their behaviour is rational.
Fintech’s two big ideas are a decade apart 7 Apr 2016 Blockchains and open-access consumer finance could each conceptually transform banking. But customers will be able to force European lenders to divulge current account data to third parties from 2018, while mainstream adoption of distributed database tech will take far longer.
The British Museum should ask for more from BP 7 Apr 2016 Climate change activists are protesting against the London institution’s sponsorship from the oil group. For the museum, the cost of accepting patronage has risen. More to the point, BP pays less of its annual pre-tax profit in charitable giving than FTSE 100 peers on average.
Canada buys its way into Glencore’s sweet spot 6 Apr 2016 The Canada Pension Plan is to buy a 40 pct stake in the Swiss trader’s agricultural business. The financial returns, at first glance, look pedestrian. But the Canucks get access to Glencore’s wheeler-dealing skills, without having to share in its $26 bln group debt pile.
Pfizer-Allergan is dead, merger arb isn’t 6 Apr 2016 Some big funds were caught out by the failed $160 bln pharmaceutical merger, the second such “Arbageddon” after AbbVie-Shire. Embarrassing as that is, the business of betting on deals can withstand the shock: arb performance is okay, and big flops like this can be easily avoided.
Bank overseers take calculated risk on derivatives 6 Apr 2016 The Basel Committee may let lenders cut the impact of swaps activity that inflates their capital needs. The upshot should be more clearing of derivatives – which regulators want. But it could make clearing houses riskier – which they don’t.
Wanted: candidates for Europe’s worst CEO job 6 Apr 2016 Air France-KLM’s boss Alexandre de Juniac has vacated an unenviable managerial position. Europe’s weakest legacy carrier is hobbled by high costs, mighty unions and a wayward state shareholder. His successor will need fluent French, modest pay expectations, and little ambition.
Hedge funds jam Hitachi’s Italian railway signal 6 Apr 2016 The Japanese company is locked in a feud with some funds, who argue it should pay more for control of signalmaker Ansaldo. Savings worth at least 395 mln euros suggest it can. Italy has started to open markets to foreign bidders – now foreign investors may help police them.
Iceland first casualty of mostly pointless crusade 5 Apr 2016 Offshore assets exposed in the Panama Papers did for Iceland’s prime minister. It wouldn’t have happened if Icelanders didn’t expect better behaviour, and know how to ask for it. That’s the problem. Leaks thwack the mostly good, and leave the genuinely corrupt largely untroubled.
Inflation insurance is new U.S. fad 5 Apr 2016 Investors have a new-found appetite to buy American bonds offering protection against price rises. U.S. inflation is finally ticking up and could overshoot the Fed’s 2 pct target. With Europe showing no such signs, though, the fashion won’t cross the Atlantic any time soon.
Israel may give Silicon Valley run for its money 5 Apr 2016 Tech and cyber-security know-how, startup spirit, VC funds and even climate make the Middle East’s startup hub a bit like the Bay Area. Jerusalem is keeping Tel Aviv on its toes. Israel has other advantages, too – a global outlook and perhaps greater hunger than in the Valley.
Credit Suisse mess goes right to the top 5 Apr 2016 In October the Swiss bank aimed to make investment bank earnings steadier. But it kept lucrative high-yield positions, which then lost $1 bln. Boss Tidjane Thiam says he was unaware the holdings had been ramped up. He should have been watching them like a hawk.
Peugeot’s Tavares might be the anti-Marchionne 5 Apr 2016 The French carmaker’s conservative short-term targets have disappointed. Yet CEO Carlos Tavares is probably just being realistic. It’s a sharp contrast with the bullish goals of Fiat boss Sergio Marchionne. Despite the differences, both are heading towards the same place.
Portugal can gain if it loses Novo Banco battle 5 Apr 2016 Bondholders are suing Lisbon’s central bank, arguing losses imposed on the stricken lender were arbitrary. Losing the case would complicate Novo Banco’s turnaround. But enforcing the principle that governments should use bail-ins fairly would help all banks, even in Portugal.
Why German brewers lack global fizz 4 Apr 2016 Germany is the land of cars, engineers and beer. Unlike manufacturers, brewers missed out globally. The $9 bln industry is fragmented and ruled by family owners trying to hang on to a glorious past. Half a millennium after the purity law’s adoption, the future tastes bitter.