Europe’s bad-loan struggle risks backfiring 1 Dec 2017 Italy is leading the resistance to a European Central Bank plan to shrink banks’ bad debts. A victory will be empty, though. Ignoring defaulted loans hurts new lending. Failing to clean up legacy balance-sheet risks could also kill off the euro zone’s bank deposit scheme.
Investment bank weighs on Credit Suisse turnaround 30 Nov 2017 CEO Tidjane Thiam played down the Swiss bank’s capital markets business in a shareholder presentation on Nov. 30. Yet the unit brought in 45 percent of net revenue in the first nine months of 2017. Achieving double-digit return targets depends on Thiam finding more costs to cut.
Julius Baer CEO bows out at private banking peak 27 Nov 2017 Whizzkid Boris Collardi is leaving the Swiss group for smaller rival Pictet after eight years in charge. Bold deals and aggressive Asian expansion boosted earnings and lifted shares to record highs. Toppy markets and intense competition will make life harder for his successor.
Big Food should resist organic Thanksgiving feast 23 Nov 2017 Natural-foods businesses have grown faster than processed purveyors of late. That makes $4.3 bln organic producer Hain a tempting target for Nestlé or others. But high valuations, changing consumer tastes and the looming threat of Amazon warrant moderation over M&A indulgence.
Nestlé makes grown-up changes to infant business 15 Nov 2017 The $260 bln KitKat maker is splitting up its global baby-food unit. Regional differences make that sensible. Competition is a factor, too. Nestlé is also the third big food-and-beverage group to shake things up in a month – a sign of traditional consumer-goods firms’ struggles.
Belt-tightening gives Tidjane Thiam breathing room 2 Nov 2017 The Credit Suisse boss delivered an 80 pct jump in third-quarter pre-tax profit despite lower revenue. An activist seeking to break up the Swiss lender can point to a misfiring investment bank. But cost-cutting and higher wealth management earnings give Thiam the upper hand.
Novartis avoids danger with nuclear M&A option 30 Oct 2017 The Swiss drugmaker is paying $3.9 bln for France’s Advanced Accelerator, which uses radiation to fight tumours. The deal is at a hefty 47 pct premium, but it’s logical and ticks financial boxes. It won’t drive investors wild, but they don’t need to run for the shelters, either.
Clariant-Huntsman gives way to post-activism chill 27 Oct 2017 The scrapped $14 bln merger between two chemicals makers is not worth mourning; Clariant has other ways to create value. The near-term risk lies in activist duo White Tale, whose 20 pct stake killed the deal. Investors can’t tell whether they will be a catalyst or an inhibitor.
UBS investors benefit from smaller investment bank 27 Oct 2017 An inflow of cash from wealthy clients helped boost the Swiss lender’s pre-tax profit by 39 percent in the third quarter. UBS also profited from the lack of big trading operations which have hobbled some rivals. Shareholders stand to be rewarded with a higher annual dividend.
Novartis gets brief respite from problem children 24 Oct 2017 The Swiss drugmaker’s troubled eyecare unit performed better in the third quarter, reducing pressure for a quick sale. Its generic business still faces challenges despite beating forecasts. The group’s devotion to its stake in rival Roche, however, remains hard to justify.
ICOs validate old-school “follow the money” mantra 19 Oct 2017 One of the biggest so-called initial coin offerings to date, $230 mln for what are known as tezzies, has led to a spat between its architects and a Swiss foundation that controls the digital cash. Where crowd-funding and crypto-currencies meet IPOs, traditional motivations apply.
Credit Suisse breakup faces trading conundrum 17 Oct 2017 An activist investor wants to split the Swiss bank into three parts. On paper, the private banking and asset management units alone justify its $41 bln market value. But the ailing investment bank – including an estimated $250 bln of derivatives – would struggle to stand alone.
Syngenta puts Beijing’s unspoken promises to test 10 Oct 2017 The Swiss seed company’s Chinese parent and its state backers disagree over whether they stand behind its legal bills. It’s a dynamic found across China’s financial system: implicit guarantees are common, and rarely tested. The government has good reason to keep things ambiguous.
Nestlé can pre-empt Dan Loeb with refreshed board 3 Oct 2017 The Kit Kat maker’s directors are light on consumer and digital expertise. Half of them are Swiss, a market worth just 2 percent of sales. Nestlé’s latest revamp plans are far from radical, and the activist may next seek boardroom changes. The company could beat him to it.
ABB’s short-term value push takes $2.6 bln detour 25 Sep 2017 The Swiss group is shelving a $3 bln buyback programme to acquire GE’s non-core industrial solutions unit. On the surface it’s a strange move for a company that’s faced calls to simplify and boost margins. But a low price and high synergies mean ABB investors might still prosper.
Nestlé’s L’Oréal stake is ready for a makeover 22 Sep 2017 The head of French cosmetic group’s founding family, Liliane Bettencourt, has died, reviving the debate about the Nescafé owner’s 23 pct stake. The best solution is to offload it. The challenge for Nestlé boss Ulf Mark Schneider is how to distribute 24 billion euros of value.
Blue Bottle gives Nestlé little more than a buzz 14 Sep 2017 The Swiss food giant is buying control of the hipster coffee chain at a high-octane $700 mln valuation. It's a premium upgrade for the Nescafé maker, which is also offloading its U.S. candy arm. It may prove challenging, though, for such a niche brand to jolt the bottom line.
Breakdown: Killing Libor is a long, messy business 14 Aug 2017 Obituaries for the discredited global benchmark are premature. Its successors will take years to become as ubiquitous as a rate that is still the basis for trillions of dollars of financial contracts. Breakingviews spells out the legal pitfalls – and the trading opportunities.
Thiam has yet to move Swiss banking mountains 28 Jul 2017 The Credit Suisse boss has made the bank much more like its wealth management-heavy rival UBS. Yet his returns are less than half as good, and investors see it in second place. Lingering unwanted assets are one reason. The lender’s past U-turns in strategy may be another.
Nestlé is behind in consumer goods bake-off 27 Jul 2017 In a slow sales environment, global food giants need a new growth recipe. Danone and Unilever are both buying higher-growth companies and using fashionable cost cutting philosophies to improve profitability. Bigger rival Nestlé is trying too, but less convincingly.