Ackermann jibe evokes ghost of Deutsche past 27 Nov 2012 Deutsche Bank has erred by choosing not to send co-CEO Anshu Jain to a parliamentary hearing on Libor. Jain wasn’t directly called, but it still looks evasive. And it has given ex-boss Josef Ackermann the chance to revive an unseemly Deutsche custom of undermining new leadership.
Lehman’s Archstone saga twists till the end 27 Nov 2012 The U.S. apartment empire that buckled the investment bank is being sold to two rivals for $6.5 bln. Accounting changes and poor disclosure muddle the valuation. Lehman creditors also will be left investing in the real estate. It’s a perfectly confounding denouement.
EU must ensure Basel III is delayed not derailed 27 Nov 2012 Brussels is set to follow the U.S and push back the start of vital global bank reforms. While not ideal, a delay of months rather than years would be bearable. The danger is that Basel III haters and self-serving banks use the confusion to water down what remain worthy reforms.
Pay bankers in CoCos to manage moral hazard 27 Nov 2012 Bond investors are worried that banks could deliberately run down capital to trigger a bail-in of their contingent convertibles. Checks and balances mean the risk is small. But it’s still real. Banks could address it by aligning bonuses with CoCos.
UK should resist yet another bank levy hike 26 Nov 2012 The coalition’s annual tax on lenders’ balance sheets started life as a smart way to raise cash while geeing banks to slash risky short-term funding. But bankers now expect the rate to be raised for the third time. That undermines incentives. Better to focus on stimulating lending.
Barclays’ investment bank is too good to lose 26 Nov 2012 Antony Jenkins is feeling the heat from investors. The Barclays CEO is under pressure to cast his investment bankers free and pursue the high street’s more staid returns. But with investment banking making up three-fifths of group revenue, Jenkins can’t afford to set it loose.
How about Mitt Romney for Treasury Secretary? 23 Nov 2012 The beaten Republican candidate certainly has the right resume, and a re-elected Obama will need a new finance chief. Markets would celebrate the pick as a shocking pivot towards bipartisanship. But neither man may have the restraint to keep from wringing the other’s neck.
Monte dei Paschi finds patriotism doesn’t pay 23 Nov 2012 The venerable Italian bank hoped to receive state bailout cash without much dilution for existing investors. But Brussels looks likely to nip this in the bud. Banks in the euro zone periphery will think twice before loading up on public debt to help their struggling governments.
HP’s accounts bombshell: a guide for the perplexed 22 Nov 2012 The U.S. tech group says it was duped into overpaying for Autonomy. The $9 bln row centres on three allegations relating to how the UK group presented its sales. Unpick them, and HP has work to do to show Autonomy went beyond being aggressive in its accounting.
RBS’s Citizens unit all dressed up, nowhere to go 21 Nov 2012 The U.S. bank, with its $120 bln balance sheet, is a prize asset. That should mean a bidding war if UK taxpayer-owned RBS sells it. But the need to pay cash, keep their own investors happy and satisfy watchdogs may give buyers pause. Citizens could remain foreign for a while.
JPMorgan CFO rejig leaves only Dimon unpunished 20 Nov 2012 Promoting Marianne Lake ticks several boxes. It sidelines another top dog, Doug Braunstein, who failed to spot the London CIO mess; adds another woman to the c-suite; and restores the CFO’s place in the hierarchy. Clawing back some of Dimon’s pay would at last harpoon the whale.
HP-Autonomy row suggests bankers did not compute 20 Nov 2012 There’s plenty of blame to go around in the explosive bust-up between the U.S. tech giant and the British data-sifter. But it raises tough questions for the M&A advisers who shepherded the $12 bln deal, chiefly Frank Quattrone’s Qatalyst, Barclays and Perella Weinberg.
UBS rogue trader verdict leaves open question 20 Nov 2012 Kweku Adoboli was found guilty of committing a fraud that led to a $2.3 billion loss at UBS. But he was acquitted of false accounting. The trial shows Adoboli did something wrong, but it did not determine whether he worked in a bank, and industry, with a defective culture.
Credit Suisse shrinks to fit new realities 20 Nov 2012 The Swiss bank has to deal with straitened times and regulatory pressure for more capital and simpler structures. So it is slashing headcount, including three big chiefs, and making businesses more separate. It looks like the beginning of the end for the one-bank strategy.
HSBC needs to put numbers on China ambition 19 Nov 2012 The emerging market lender is in talks to offload its $9.2 bln stake in insurer Ping An. A sale fits HSBC’s focus on capital efficiency. But now CEO Stuart Gulliver should explain why the bank’s even larger shareholding in Bank of Communications still makes financial sense.
BNP and SocGen smiling after Hollande U-turn 16 Nov 2012 Remember how France’s president promised a war on banks? Now his finance minister says Paris will only crack down on proprietary trading, leaving market-making untouched. This could undermine the Liikanen report’s call for market-making to be ring-fenced across the EU.
Prokhorov’s RenCap grab likely prelude to a sale 15 Nov 2012 The Russian oligarch has had it with propping up RenCap. He is taking control after the investment bank, hit by sluggish emerging economies, slipped in its domestic core market. For the now politically-focused billionaire, a quick turnaround-and-sale is the order of the day.
Goldman grail gets holier – but less rewarding 14 Nov 2012 The Wall Street firm named 70 new partners, the smallest class since its IPO in 1999. Goldman’s total headcount is shrinking and fewer of the old guard are moving on. While a partnership’s still a ticket to riches, lower profit means it’s tougher to achieve and less of a bonanza.
Inequality hits home for Wall Street middle class 12 Nov 2012 Pity all those 30-ish Greg Smiths who entered the industry after the dot-com bust and tirelessly served MDs minting record bonuses in the leverage boom. Now comp is down and their bosses aren’t moving. Even Goldman’s partnership must make way for the new realities of finance.
UBS puts seven banks in the FICC firing line 9 Nov 2012 The Swiss bank’s shares are up 20 pct since plans to cut back fixed-income emerged. That piles pressure on peers with subscale debt businesses. Credit Suisse and BNP can cling on. But RBS and Credit Agricole look under real pressure, followed by SocGen, Nomura and Morgan Stanley.