Commerzbank boss departs with job only half done 2 Nov 2015 Martin Blessing is leaving the German bank. The CEO has de-risked the lender and paid back most of its crisis-era state aid. Less happily, Commerz’s costs and returns are still not up to scratch. A share price jump shows investors welcome the scope for fresh ideas.
AB InBev enters SAB mega-deal on a solid footing 30 Oct 2015 The Budweiser brewer has upped guidance on revenue. Costs are also rising because AB InBev is selling more fancy beers. Ahead of its $105 billion deal with SABMiller, the world’s largest brewer must spend on new products and markets as well as buying rivals in order to secure growth.
Too soon for BNP to ramp up its investment bank 30 Oct 2015 France’s biggest lender by assets grew third-quarter revenue 8.5 pct on gains in trading, the U.S. and emerging markets. But a plan to grab investment banking market share is risky given its low capital ratio. And a skimpy equity allocation flatters the division’s returns.
LNG moves from blessing to curse for BG/Shell 30 Oct 2015 BG Group posted a big drop in third-quarter liquefied natural gas EBITDA. Earlier this year LNG, which provides a fifth of BG earnings, looked a definite plus for Shell as it completes a $70 bln takeover. Now it looks like yet another headache for the Anglo-Dutch major.
Airbus success hides growing flagship problem 30 Oct 2015 Europe’s aerospace group is getting many things right, as a 12 pct third-quarter growth in operating profit shows. But demand for its ageing long-distance A380 model has peaked. The flagship jet is overdue a $2 bln or so upgrade. Airbus can afford it, but is losing crucial time.
Spain’s big banks hit by volatile emerging markets 30 Oct 2015 BBVA’s core capital fell in the third quarter while Santander’s barely grew, in part due to falling currencies in their foreign operations. Despite robust profits, capital looks light at both banks. Worryingly, book value per share also fell. Diversification has its drawbacks.
RBS capital strength not quite what it seems 30 Oct 2015 After offloading a stake in its U.S. arm, the British bank will have a huge 16 pct solvency ratio. But RBS still faces costs to exit UK state ownership, and hefty charges for past conduct issues. Investors trying to locate when dividends will resume still require a telescope.
Energy subsidies will test Saudi’s pain threshold 29 Oct 2015 The kingdom is considering how to claw back the $107 bln it foregoes each year by subsidising the price of domestic energy. Without that support, companies would be uncompetitive and subjects angry. But the impact of low oil prices makes giveaways an unaffordable luxury.
Traders aren’t buying the idea of a euro rout 29 Oct 2015 Hints of monetary easing in the euro zone and the chance of a December tightening in the United States have pushed the currency down against the dollar. But market disconnects suggest traders are wary of betting against the euro too aggressively. Their caution is justified.
Deutsche Bank looks like tortoise to Barclays hare 29 Oct 2015 The German lender is cutting 35,000 staff and 20 pct of risk assets in John Cryan’s big revamp. Its UK peer did better in Q3 capital markets advisory, a business both seek to grow. With Barclays hit by UK ring-fencing, Deutsche’s investment bank could cope better long term.
Shell throws kitchen sink at low oil 29 Oct 2015 The Anglo-Dutch major’s quarterly results were scarred by a net charge of $7.9 billion. It’s painful, and the comparison with rival Total unflattering. Shell was able to cover dividends with cashflow in the last year, but the balancing act is only going to get more difficult.
Pfizer may pay dearly for Allergan tax-lite charms 29 Oct 2015 The U.S. drugs group is eyeing a $330 bln tie-up with its Ireland-based rival, reports suggest. Allergan, with an enviably low tax rate, can hold out for a good price. But if Pfizer stumps up for a premium of more than 25 percent, it will risk paying away the benefits of a deal.
Europe’s stricken airlines cursed with good luck 29 Oct 2015 Lufthansa and Air France-KLM reported boosts from lower oil prices and strong summer demand. The uplift is probably temporary. But try telling that to restive pilots who may push back even harder on essential cost cuts. There’s little respite for the carriers’ horrible returns.
BT has to make better case to avoid $65 bln split 29 Oct 2015 UK regulators are mulling whether the British telecoms group should be broken up. BT reiterated its dislike of the idea as it reported flat earnings growth. United, it says the UK has a good chance of better telecoms infrastructure at the best price. Its argument is unconvincing.
Shell faces tough call on what to cut next 28 Oct 2015 Shelving a high-cost Canadian oil sands project and taking a $2 bln writedown is smart amid lower crude prices. It is getting harder for the group to sift the wheat from the chaff in terms of bankable projects, but if it wants to safeguard its dividend, it has little choice.
Barclays pays tolerable price to plug CEO gap 28 Oct 2015 The UK bank is giving new boss Jes Staley 1.9 mln pounds of stock to replace shares in former employer JPMorgan. Staley ideally should have waived the award. But peers hired elsewhere have got more. Waiting until they vested would have meant another three months with no chief.
Lloyds earnings show folly of public share sale 28 Oct 2015 The UK bank’s share price fell 5 pct on weak third-quarter income. The government, set to sell part of its stake to retail investors, has focused on Lloyds’ dividends and market clout. But risks from regulation and misconduct could turn the stock into a political hot potato.
Cash-rich VW braced for dieselgate impact 28 Oct 2015 Third-quarter earnings don’t yet reflect the effect of the carmaker’s emissions scandal, besides slightly increasing its recall cost provision to 6.7 bln euros. Strong cashflow and stable demand for its cars suggest VW is in decent shape to absorb the likely financial impact.
Heineken strength justifies mega-merger abstinence 28 Oct 2015 The Dutch brewer’s quarterly sales increased 8 pct year-on-year. That’s better than latest figures from SABMiller and AB InBev. Carlsberg dropped 4 pct last quarter. While Heineken’s three global peers are chasing growth through change, the green-bottle brewer is sitting pretty.
Eni’s decoupling from Saipem is for the best 28 Oct 2015 The Italian oil major is selling a stake in the oilfield contractor while subscribing to a 3.5 bln euro rights issue. The complex refinancing will see Eni reduce its debt by a third and put Saipem’s borrowings at arm’s length. Both get much-needed balance-sheet underpinning.