Credit Suisse takes right leaf out of rival’s book 30 Jul 2020 CEO Thomas Gottstein will cut costs and deploy more capital in wealth management. A slimmer investment bank would make the lender look more like UBS, which has a higher valuation. To close that gap faster, the new boss could hand savings to investors instead of reinvesting them.
UBS offers bank investors safe haven at a price 21 Jul 2020 The $43 bln Swiss lender avoided the virus-induced bad debt plaguing peers, and should pay a dividend sooner than most. That protects its shares from a sector-wide slump. But, given its relatively rich valuation and weak growth prospects, any upside will now depend on cost cuts.
Europe’s private-equity share premium is temporary 16 Jul 2020 Sweden’s EQT and Swiss Partners Group fetch price-earnings multiples way above KKR, Blackstone, Carlyle and Apollo. That’s justified by faster growth and a higher proportion of management fees, which are more predictable than carry. As the newer funds mature, that will erode.
Bankers’ share sale boom hints at fragile recovery 27 May 2020 Saint Gobain sold $2.7 bln of shares in Sika, one of several recent so-called block trades. Such deals are a quick way for banks to win business but, as Citi’s experience with the Swiss group shows, carry risks. Companies’ rush to exit suggests stock market gains may be fleeting.
Cox: Quarantine in Switzerland is surprise luxury 19 May 2020 As the country reopens, the cliché of neighbours chastising you for not sorting recycling properly is to be praised. The key takeaway: a society that prizes self-responsibility, respects rules and institutions and plans for rainy days is a good place to shelter from the storm.
The Exchange: Corona-nomics 27 Apr 2020 Kevin Warsh, Jason Furman and Laurence Boone join a wide-ranging panel discussion with Breakingviews to size up the global monetary and fiscal responses to the economic lockdowns enforced to halt the spread of Covid-19; and to map out a recovery back to something like normal.
Keeping it local gives Nestlé a temporary lift 24 Apr 2020 Sales grew 4.3% in the first quarter as consumers in Europe and the U.S. stockpiled products like coffee and pet food. The $320 bln Swiss giant’s localised production and inventory helped it meet increased demand. But lower sales in Asia suggest the bounce will not last.
Private banks’ loan push will survive virus scare 23 Apr 2020 Plunging markets triggered margin calls on lending to rich clients. Yet Credit Suisse’s modest first-quarter provisions on such loans show big wealth managers can manage the pain. The promise of quick credit should ensure billionaires like SoftBank’s Masayoshi Son keep borrowing.
Glencore mine grab would have a tiny silver lining 20 Apr 2020 Zambia may seize assets, including the commodity giant’s Mopani copper mine, to help with Chinese debt relief, the WSJ says. That would make the African state a pariah and confirm fears of debt-trap diplomacy by Beijing. At least Glencore might win some useful U.S. sympathy.
Hoarding to extend sell-by date of tired brands 17 Apr 2020 Consumers stockpiled pantries and freezers with long-life grub, boosting dowdy products like frozen Hot Pockets. Unilever and Nestlé had been tilting towards higher-end brands. Lockdowns will force CEOs and investors to reconsider the value of what’s in their cupboards.
UBS sets high-water mark for 2020 bank earnings 9 Apr 2020 Outgoing CEO Sergio Ermotti unveiled a one-third jump in first-quarter profit. Market volatility has boosted trading income, while wealth clients shifted more money around. Yet both are temporary. With more pain to come, it makes sense to bow to regulators by trimming dividends.
Wall Street stuck with Luckin Coffee dregs 7 Apr 2020 Morgan Stanley, Credit Suisse and others face big losses after the founder of Starbucks' Chinese rival defaulted on $518 mln of loans amid fraud charges. The lenders are stuck offloading a huge stack of share collateral in a falling market. It’s the price of blindly chasing fees.
China’s wannabe fashion empire unravels 3 Apr 2020 Two years after agreeing to buy Swiss luxury brand Bally from JAB for $600 mln, Shandong Ruyi has failed to nail down financing. Its large and complex debt structure looks increasingly shaky. Even an HNA-like fire sale for the Lycra and SMCP owner will be tough in these times.
EU bank dividend pause could add $300 bln to loans 30 Mar 2020 Lenders like UniCredit and ING will follow regulators’ advice and halt payouts. That could add $30 bln to euro zone bank capital, supporting 10 times that sum in lending to virus-hit firms. Those who stick with their dividends, like UBS, will regret it if the crisis persists.
Exclusive: UBS CEO tips Swiss to better governance 2 Mar 2020 Sergio Ermotti will become chairman of Swiss Re after his 9-year term ends. It would have been tempting to hold out for the chance to chair Switzerland’s largest bank. But this allows him to embark on a new chapter without complicating life for his successor Ralph Hamers.
Cox: Anyone on Wall Street want a Swiss bank? 24 Feb 2020 UBS and Credit Suisse have attractive wealth and asset management businesses, but their investment banks suck up capital and weigh on valuations. Goldman Sachs, Morgan Stanley and others could unpick some of that value. They’ll be closely watching the Zurich pair’s new bosses.
Julius Baer gets off lightly for dirty money sins 20 Feb 2020 The Swiss finance watchdog demanded better controls and barred the bank from embarking on major deals for now. That’s mild punishment given the systematic failings that were uncovered but reflects limits on what the supervisor can do. The regulator could really use sharper teeth.
GAM does just enough to become a takeover target 20 Feb 2020 The Swiss asset manager saw profits fall 92% as a compliance scandal caused clients to pull funds. New CEO Peter Sanderson is pledging to cut costs and boost margins, but his targets look optimistic. Still, if Sanderson can steady the ship, GAM could look appealing to a buyer.
New UBS CEO is best answer to a difficult question 20 Feb 2020 The $50 bln group’s ideal successor to Sergio Ermotti would have experience running a big lender along with wealth management and investment banking chops. That’s a rarity. ING’s Ralph Hamers brings cost-cutting and tech savvy. Holland’s pay rules made him an affordable asset.
Glencore split could spring-clean dusty valuation 18 Feb 2020 The commodity giant’s coal operations dragged in 2019. Spinning them off into a separate entity would underline the low-carbon potential of the copper and cobalt assets left behind. That could leave billionaire CEO Ivan Glasenberg with a more valuable overall cake.