Bank investors sense a blockage in dividend gusher 13 Jul 2021 UK lenders like NatWest could in theory make payouts worth up to 25% of their market value, after the Bank of England lifted a ban. Despite a recent rally, they’re not getting full credit for this. Lingering coronavirus risks and IT investment needs may explain the scepticism.
Capital Calls: Infrastructure, Doximity, Deliveroo 24 Jun 2021 Concise views on global finance: President Biden’s $1 trln bipartisan plan for U.S. infrastructure is a feat of political engineering. Meanwhile, medical-themed social network Doximity finds riches in niches, and UK delivery outfit Deliveroo serves up a favorable court ruling.
Bank climate stress tests scarier than they look 11 Jun 2021 UK and European lenders that flunk green exercises will not face higher capital charges. But past evidence suggests investors will use the new disclosure to penalise funders of pollution. That will either throttle carbon financing – or shift it to the non-bank sector.
Capital Calls: SXSW 19 Apr 2021 Concise views on global finance: Rolling Stone publisher Penske Media is taking a 50% stake in hipster arts festival South By Southwest.
Capital Calls: Airline IPO, Turkey’s central bank 18 Mar 2021 Concise views on global finance in the Covid-19 era: U.S. regional air carrier Sun Country Airlines’ IPO pop is justified by positive cash flow; Turkey shows how emerging-market policymakers face trickier choices than their rich-world peers.
Insurers’ Brexit pleading deserves short shrift 24 Feb 2021 Domestic firms want the government to ease capital requirements following the UK’s departure from the EU. It’s true dividend restrictions mean they may already have ample capital. But amid a slump that’s not enough to make already confusing solvency metrics even more so.
Capital Calls: Deloitte castoff, Banks and Brexit 15 Feb 2021 Concise views on global finance in the Covid-19 era: The UK auditor chooses an unfortunate moment to offload its lucrative restructuring practice; The Bank of England pours cold water on the idea of a regulatory bonfire after Britain leaves the European Union.
BoE preps negative rate gun it doesn’t want to use 4 Feb 2021 Bank of England boss Andrew Bailey told lenders to be ready to cope with sub-zero interest rates at any point from six months’ time. The weapon will be a handy addition to his arsenal. Covid-19 variants or post-Brexit trade frictions may yet derail the growth rebound he expects.
BoE leaves UK lenders in investor purgatory 11 Dec 2020 The supervisor will let HSBC, Lloyds and others resume dividends and share buybacks next year. But its new “guardrails” will limit the sector’s overall yield to around 2%. While the original ban made sense, lingering restrictions may further raise banks’ cost of capital.
Bank of England offers plaster for Covid-19 wound 5 Nov 2020 Governor Andrew Bailey will buy an extra 150 bln pounds of government debt, allowing finance minister Rishi Sunak to keep spending during a new lockdown. But the pandemic’s structural shifts may leave behind workers who lack the right skills. Only the state can fix that problem.
Bank dividend bans have passed their sell-by date 30 Oct 2020 European supervisors in March halted payouts so that lenders could keep credit flowing and absorb losses. Yet earnings and capital have held up, while bond markets are booming. Regulators can drop the restrictions, as long as banks keep big shock absorbers and don’t cut lending.
Corona Capital: Newspaper rivals, College football 17 Sep 2020 Concise views on the pandemic’s corporate and financial fallout: the Wall Street Journal hits up the New York Times’ printing presses; U.S. college football’s Big Ten makes a comeback.
Corona Capital: Aviva’s restructuring 6 Aug 2020 Concise views on the pandemic’s corporate and financial fallout: New CEO Amanda Blanc is reinstating the UK insurer’s dividend and is even open to selling its Asian and European businesses. That’s music to investors’ ears.
UK stimulus exit talk may do more harm than good 23 Jun 2020 Central bank boss Andrew Bailey is talking about how monetary easing will be unwound, while finance minister Rishi Sunak may later this year unveil deferred tax rises. Payback is inevitable. But when flagged so clearly, it undermines recovery efforts.
Corona Capital: UK debt, Oaktree, KKR, Chanel 19 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: UK government borrowing surges past GDP; Howard Marks is sceptical about the stock market revival; KKR bets on cheap and local European holidays; Chanel takes a gloomier view than rivals on the luxury rebound.
Andrew Bailey can freeload on Fed and ECB largesse 18 Jun 2020 The Bank of England boss will buy an extra 100 billion pounds of bonds, but at a slower pace. His peers are being more open-handed. For example, banks just borrowed 1.3 trillion euros from the European Central Bank. Ample global liquidity will help Bailey contain UK debt yields.
Corona Capital: KKR, Rugby, Centene 12 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: KKR volunteers advisers to share the pain, Super Rugby heads back to the pitch, and Centene's best bet.
Corona Capital: Marijuana 5 Jun 2020 Concise views on the pandemic’s corporate and financial fallout: Cannabis retailers in California miss out on pandemic surge in vices.
Negative rates would trigger UK banking rollup 19 May 2020 British rate-setters including BoE Chief Economist Andy Haldane are contemplating taking policy rates below zero. Bank margins would suffer, but big ones like Barclays have more fee income to rely on. Stragglers like Virgin Money and Metro may have to put themselves up for sale.
Andrew Bailey will have the UK bond market’s back 7 May 2020 The Bank of England boss expects a big drop in GDP this year. His asset purchases have pushed down gilt yields despite surging public debt issuance. Investors can count on Bailey to ramp up the buying programme given how long the economy will take to recover from the virus.