UK bank upstart seeks two-step path to Lloyds deal 6 Sep 2011 NBNK is mulling an offer for the UK assets of National Australia Bank. A successful deal could give the bid vehicle an advantage in acquiring the branches Lloyds is being forced to sell. But in tough markets, convincing investors to cough up the cash looks a challenge.
U.S. mortgage suits inflict super-damages on banks 6 Sep 2011 The latest U.S. regulatory assault for mis-selling mortgage securities has dragged down bank stocks. But damages previously sought from UBS, and the performance of the underlying loans, suggest the impact of this particular banking nasty is now more than priced in.
Exxon’s Russian coup rubs salt in BP’s wounds 31 Aug 2011 The U.S. oil group’s Arctic exploration agreement with Rosneft mimics BP’s aborted deal but without the $16 bln share swap. Instead, there’s Russian access to U.S. drilling projects. Assuming no hidden snags, Exxon could become the big winner from BP’s botched Russian strategy.
Vodafone’s Greek tie-up tests mobile M&A limits 31 Aug 2011 Vodafone is proposing a small Greek wedding. The resulting mobile-market duopoly might be hard for Europe’s competition police to swallow, even given Greece’s exceptional problems. But consolidation means big savings. A go-ahead for Vodafone here could spur larger European deals.
Goldman chips away at fixed cost problem 26 Aug 2011 The bank is trimming base pay for some senior UK bankers. The 2009 shift from bonuses to higher fixed comp was a bit slippery, but the move back rightly reinstates pre-crisis flexibility. Rivals should follow but may struggle unless they, too, foresaw the need in the small print.
UK/Swiss deal good for taxpayers, banks and crooks 25 Aug 2011 Two years ago UK investors with untaxed assets in Swiss bank accounts looked like they would lose their anonymity. Instead, they will now pay almost the full tax rate to the UK, helping it cut its deficit. The Swiss banking model is protected - but dodgy money will remain shielded.
HP stock sell-off looks like overkill 19 Aug 2011 The tech giant has seen about a quarter of its market value, almost $16 bln, vaporized in two days. Shareholders have fled following another profit warning, a huge and pricey acquisition deal, and a strategic U-turn. That makes for plenty of warts - but HP now looks too cheap.
Rivals unlikely to crash HP’s punchy Autonomy deal 19 Aug 2011 Autonomy would be a nice-to-have for Oracle or IBM. But Hewlett-Packard’s $11.7 bln offer for the UK software group is already rich, and rivals don’t need Autonomy quite so badly. Add in falling markets and the ugly reaction of HP shares, and a bidding war doesn’t compute.
UK should avoid handwringing over Autonomy sale 19 Aug 2011 It could have been Britain’s Google, say those who mourn the Cambridge software firm’s sale to HP. Maybe. But Autonomy’s founder has a right to an exit, while public companies have a duty to accept rich takeover bids. Its success is still an inspiration to would-be entrepreneurs.
HP says goodbye Compaq, hello IBM 19 Aug 2011 The U.S. tech giant may spin off its PC unit and stop making some mobile devices. It has also offered to buy UK data search software group Autonomy for $10 bln. Leaving the cutthroat hardware market for higher margin software can work, as IBM shows. But it won’t be quick or easy.
Barclays’ star trader exit won’t be the last 17 Aug 2011 The UK bank is parting company with big-shot commodities trader Todd Edgar. Curbs on proprietary trading are one factor, and his contract terms may make it logical to go now. But with revenues in trading under pressure, the underlying trend is shrinkage in any case.
London’s safe-haven status faces another threat 9 Aug 2011 Images of rioting across the capital have been beamed around the world. It’s another factor that could make London less attractive for globally mobile workers and investors. Though the government should not hesitate in its austerity policies, it needs to prove the city is safe.
London riots strike another blow to confidence 8 Aug 2011 A third day of violent clashes and looting around the city are being put down to anti-police sentiment, social division, summer boredom and BlackBerry-coordinated unrest. Whatever the causes, the images from the financial capital can only hurt already fragile markets.
RBS’s uncertain road ahead gets even bumpier 5 Aug 2011 Though the UK bank met expectations in the first half, its shares are being savaged in the broader market sell-off. The balance sheet clean up is going well, but euro zone exposure is starting to hurt. The bank’s goal of 15 pct return on equity by 2013 is also looking vulnerable.
Lloyds’ battering may have silver lining 4 Aug 2011 Huge one-off charges, higher funding costs and moribund markets made a mess of the UK lender’s first half. But Lloyds is weaning itself off state funding. And its depressed share price may prompt politicians to back away from plans to force the bank to sell more branches.
StanChart investors should not get carried away 3 Aug 2011 The lender’s income is growing at a double-digit clip and it is hiring, not firing. Even better, costs are under control. But StanChart’s premium valuation leaves little room for error. A first-half hiccup in India is a reminder that emerging market growth is seldom linear.
Voting equality could bring big payoff for Murdoch 3 Aug 2011 Change is needed at News Corp. Scrapping the dual share structure would signal a fresh start and could create a big slug of value. Reform could also reward the Murdochs handsomely for ceding control. A rejig would dilute today’s non-voters, but even they might end up ahead.
UK should tax the rich more intelligently 2 Aug 2011 Fresh calls for the 50 pct top rate to be abolished ignore political reality. Financially, tax cuts for the poor would do more to stimulate the economy. The real issue is that the tax system is a mess, and a property levy might tax the rich more effectively.
Barclays’ targets still look a stretch 2 Aug 2011 Falling bad debts helped the UK bank meet forecasts for H1, and underlying return on equity has jumped to 9 pct. But to achieve its 13 pct goal in 2013, Barclays will need strong top-line growth as well. That’s challenging given euro zone woes and regulatory uncertainty.
HSBC supertanker will take time to turn around 1 Aug 2011 CEO Stuart Gulliver wants to make the bank more efficient, but emerging market wage inflation means costs are still rising. Factor in new capital rules, and HSBC’s return on equity is also well below target. It’s no surprise the bank is planning to slash another 25,000 jobs.