Too-big-to-fail rules make banking less global 9 Nov 2015 New guidelines will force lenders to hold big buffers of capital in their overseas arms. American and European banks can phase in their bail-in needs, and big Chinese groups no longer get off scot-free. Even so, the regulatory regime looks set to be another balkanising force.
Dixon: Brexit debate should start with trade 9 Nov 2015 The chances of the UK voting to quit the European Union are high. The damage to business if it does leave would be high too. Trade ties, and the difficulty of replacing them from outside the EU, should be front and centre of the debate.
UK brokers take opposing bets on future of trading 6 Nov 2015 ICAP may sell its voice-trading business and related bits to Tullett Prebon for stock, some of which would go to the seller’s shareholders. The mooted deal is messy. But it allows Tullett to double down on its core competence while ICAP can bet on an electronic future.
D-day nears for Tata Steel as Europe woes grow 6 Nov 2015 The Indian steelmaker has written off another $1.3 billion at its ailing European division. Under pressure from cheap Chinese imports, the unit’s EBITDA has turned negative. Tata will need to make tough choices about the business it bought in 2007 sooner rather than later.
Barclays, not HSBC, should mull quitting the UK 5 Nov 2015 HSBC caused a scene by suggesting it might move its HQ to Hong Kong. But it makes more sense for UK-based peer Barclays to move to New York. Its new CEO is American, the U.S. is better able to house a systemically important bank, and Barclays might dodge UK bank and bonus rules.
Electra heat shifts from the board to cage rattler 5 Nov 2015 Edward Bramson has won two director seats at the UK private equity fund. Electra’s chairman, who argued firmly against Bramson’s charge, has resigned. But the shareholder vote was close. Before, the incumbents were under pressure. Now Bramson has to prove he can create value.
AstraZeneca goes two steps forward, one step back 5 Nov 2015 The UK drugmaker’s third quarter beat expectations. It raised forecast sales and earnings. But Astra was helped by old medicines declining less quickly than expected, and some one-off gains. The mixed performance shows why its discount to peers is deserved.
Boardroom gender targets only do half the job 4 Nov 2015 Bonuses paid to City executives should be linked to how many senior women they employ, according to a review commissioned by the UK government. The idea probably has more merits than drawbacks. But promoting women to the highest echelons may be easier than retaining them.
New look M&S has incomplete designs 4 Nov 2015 First-half results show the 8.5 bln stg UK retailer has done much to improve itself internally - non-food gross margin guidance was revised up, again. But Marks & Spencer needs to get the top line moving to deliver sustained returns. Fashioning external appeal is a harder task.
Mixed economic messages complicate Carney’s job 3 Nov 2015 Timing the UK’s first rate rise in eight years is especially tough for Bank of England Governor Mark Carney. Recent economic signals are muddy. Old certainties, such as links between unemployment and inflation, are in doubt. Hesitant central bankers make for choppy markets.
UK flunks Uncle Sam’s class-action lawsuit lessons 3 Nov 2015 Suing en masse is now allowed in Britain so long as losers pay winners’ fees. That and other rules may limit the perceived excesses of U.S.-style group suits, but could also make worthy cases too costly to file. If outsiders bankroll them, that risks conflicts and other problems.
StanChart faces years of pain for humdrum gain 3 Nov 2015 New CEO Bill Winters is dumping risky loans, cutting costs, and raising $5.1 bln in capital. He thinks the loss-making lender can rebound by serving affluent consumers in emerging markets. But even if all goes to plan, a modest 10 pct return on equity is still five years away.
UBS seals new banking era of utility-like returns 3 Nov 2015 Since its 2012 revamp the Swiss bank has led the EU investment bank pack. But despite a jump in Q3 net profit to $2.1 bln, it’s scaling back return objectives for the third time in two years. Macroeconomic softness and rising capital demands are skewering targets - for all banks.
Cheap oil no deterrent to Shell-BG deal 3 Nov 2015 The Anglo-Dutch major says its bid for BG Group still works at mid-$60s oil thanks to higher expected synergies. Cheaper oil means BG is probably worth less too, but cost savings will help. The deal needs a recovery in oil prices sooner rather than later for it to work.
HSBC’s slow road to China securities could pay off 3 Nov 2015 The lender is setting up a mainland joint venture more than a decade after its first rivals. Foreign investment banks have struggled to make inroads in the People’s Republic. Unusually, however, HSBC will have majority control. That could more than make up for its slow start.
Visa picks a tough time for $23 bln Europe deal 2 Nov 2015 The U.S. payments network is using an earnout, buybacks and other maneuvers to soften the blow of paying 61 times pre-tax earnings for its overseas cousin. It’s a crafty solution but the integration will take a while and distract management just as industry competition heats up.
Cleaner and leaner HSBC struggles to grow 2 Nov 2015 The absence of big fines in the third quarter suggests the global bank’s compliance drive is paying off. Other costs are down, and bad debts under control. However, market turmoil dragged on revenue. A share price recovery will depend on HSBC showing sustained expansion in Asia.
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.
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.
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.