European banks turn tables on Wall Street 24 Apr 2013 Credit Suisse and Barclays had a good first quarter in investment banking, holding up well against Wall St peers. Barclays still lags its Swiss rival in restructuring the business. But Credit Suisse is showing how it is possible to reshape, resize and still make good returns.
UK lending superchargers may still misfire 24 Apr 2013 The Bank of England’s reworked Funding for Lending Scheme may finally be aimed at the right target: credit-starved small firms. Yet if the companies don’t want to borrow, it still won’t work. And it looks too easy for FLS cash to leach out into less deserving sectors.
Kazakh miner nears endgame with chairman’s exit 23 Apr 2013 The hapless 3.8 bln-pound ENRC is losing its board boss and two directors. That further dents its reputation and value. The onus is now on the board to wring a decent price from the founders - if a mooted buyout appears. If no bid arrives, ENRC has a huge repair job to do.
New groat plan could suit an independent Scotland 23 Apr 2013 The UK exaggerates the difficulties of operating a “sterling zone”. But an independent Scottish currency - call it the groat - is workable. Though there are risks, a new money order would bring advantages for self-determination, macro policy, growth and employment.
Justin Welby’s UK banks sermon welcome but flawed 23 Apr 2013 Britain’s new Archbishop of Canterbury has called for a big UK bank to be split up. Welby is financially literate, and a little authoritative radicalism is welcome in this debate. But RBS is almost free of past sins. It’s probably too late for this penance.
This time the ENRC board has to show real mettle 19 Apr 2013 A possible bid led by one or more of the troubled Kazakh miner’s dominant shareholders could offer minorities a welcome exit. But there’s a serious information gap to cross. The cleanest way for the board to secure a robust asset valuation is to get an auction going.
Toyota-isation of banking brings reputational risk 19 Apr 2013 Forget financial models derived from quantum physics. The solution to low returns in banking may be found in the car industry of 30 years ago. A production-line revolution replacing people with machines could drive profit in a low-growth world. But society may suffer for it.
Barclays shake-up marks key milestone in revamp 18 Apr 2013 The departures of Rich Ricci and Tom Kalaris will remove two top lieutenants from the Bob Diamond era. New CEO Antony Jenkins had to impose regime change in the investment bank. Now that’s done, he must show he means it when he says the unit is central to the strategy.
Tesco’s short-term pain could yield long-term gain 17 Apr 2013 The UK’s biggest retailer saw annual profit dip for the first time in 20 years, and shuttered its disastrous U.S. foray. Yet it’s better to kitchen-sink now than later. And if a facelift for its UK stores improves sales, Tesco could return excess cash to investors in 2015.
CVC takes opportunistic tilt at Betfair 15 Apr 2013 The buyout giant is eyeing the high-tech bookmaker. A 35 pct premium would imply a 1 bln stg bid. Betfair has had a terrible run since floating. But its luck may be about to change. A turnaround strategy is in place. Persuading key investors to fold now might be tricky.
UK revival policy has avoided Thatcher’s mistakes 12 Apr 2013 Many UK Conservatives look back to the Thatcher era as a better time. But the Iron Lady did lasting harm with some of the methods deployed to tackle the big problems the country faced. The current administration has been able to pursue a tough fiscal policy with fewer bruises.
Why buy ENRC if its assets may soon be on the slab? 11 Apr 2013 The London-listed Kazakh miner is a regular bid-talk target. But buying it makes little sense if its assets can be bought later for less. Reports that Chairman Mehmet Dalman has threatened to resign may be wide of the mark. But ENRC has yet to present a convincing revival plan.
M&S looks prime target for shareholder spring ’13 11 Apr 2013 The UK retailer’s fourth quarter was better than its third, helped by a strong performance in food. But M&S’s non-food sales are just as bad, and its shares are pedestrian. CEO Marc Bolland’s clothing revamp will need to be an instant hit to head off investor ire at July’s AGM.
Bosses need to do more than Crosby to show remorse 10 Apr 2013 What is 70 pct of 580,000 pounds? A very comfortable living for James Crosby, the ex-HBOS CEO who has volunteered to take a 30 pct cut in his annual pension income. At current levels of top corporate pay, a persuasive show of remorse requires a much bigger sacrifice.
Crosby’s mea culpa shows need for pension clawback 9 Apr 2013 The former HBOS chief executive wants to hand back his knighthood and 30 pct of his pension. At least he has taken the initiative. But he will still have a mammoth retirement income. Regulators need ways to recoup executives’ entitlements if they leave behind a mess.
Thatcher’s economic revolution was not bloodless 8 Apr 2013 Her ultra-high interest rates and strong pound devastated industry, then her 1986 reform gutted the City of London. But her tax cuts and defeat of the unions restored Britain’s economic vitality. Her government was Schumpeterian: it destroyed and created.
HBOS top brass reap what they sowed 4 Apr 2013 A report by the UK’s banking commission lays the blame for the lender’s collapse squarely on its two chief executives and its chairman. James Crosby, Andy Hornby and Dennis Stevenson may yet escape fines. But the report makes the scale of their responsibility clear.
Deal prospects make Vodafone look cheap 4 Apr 2013 Speculation about the mega-mobile operator is rife. There’s talk of a U.S. exit, a takeover by partner Verizon, or a breakup bid. Optimistically, shareholders could get a third more value - or nearly 32 bln pounds. But getting there would entail huge deals, with headaches to match.
New review of old Barclays roughs up Diamond era 3 Apr 2013 The Salz review of Barclays’ culture pulls few punches. The bank grew too fast, vested power at the top and became difficult to manage, it says. Hard-nosed Barclays bankers may scoff at the findings. But it provides helpful ammunition for those who want to change the bank.
R.I.P. the FSA: the watchdog with little bite 2 Apr 2013 So farewell then, the UK Financial Services Authority. You gave the world “light-touch” regulation and suffered the consequences. The belated zeal you found to issue fines and tackle insider trading was too little, too late. Few - bar the odd fraudster - will mourn your passing.