Chilean lender gets tasty-looking Colombian rollup 10 Oct 2012 CorpGroup is building on its purchase of Santander’s Colombian business with a $1.3 bln offer for Helm Bank, probably the last bank of any size available in the hot market. Though the headline price is no steal at 1.7 times book value, possible synergies make it look a bargain.
Wells Fargo in mortgage mire, just like the others 10 Oct 2012 Warren Buffett’s favorite bank trades at a premium to U.S. rivals, partly thanks to a carefully cultivated “not Wall Street” image. But a new government suit against the West Coast bank is a timely reminder that Wells had no trouble cooking up its own questionable home loans.
Switchback threat may floor UK bank lending move 10 Oct 2012 Moves to relax British lenders’ capital and liquidity requirements make sense. But banks won’t lend if they think regulators will revert to a tougher approach when things pick up. Unless supervisors can solve this basic design fault, macro-prudential policy may fail.
China’s IMF boycott undermines quest for clout 10 Oct 2012 For China’s top bankers to bail on the Tokyo summit amid a territorial fight suggests public feeling is governing policy. But the IMF is supposed to be just about finance - and Japan has strongly backed a bigger role for Asian countries. Maybe China isn’t ready for a bigger say.
Asian equities may defy region’s gloomy outlook 10 Oct 2012 The IMF and World Bank both cut forecasts for Asian growth. Vital signs are waning. But with central banks pumping out cheap cash amid glimmers of U.S. recovery, investors may turn from the haven of Asia’s bonds to the promise of its stocks.
Japan’s banks are in danger of turning European 10 Oct 2012 So warns the International Monetary Fund, which worries the country’s lenders are loading up with too much sovereign debt. Unlike Greece or Spain, Japan controls its own currency. Even so, there’s a risk the government is drawing its banks into a toxic embrace.
RBS’ investment bank strategy still half-formed 9 Oct 2012 The UK bank raised eyebrows for dumping its capital-light advisory franchise, including venerable Hoare Govett. But the move now looks clever. Still, if the investment bank is better off without M&A and equities, RBS may yet be better off exiting investment banking outright.
UK stimulus gives securitisation a good kick 9 Oct 2012 The Bank of England’s funding for lending scheme makes it easier for banks to push cash into the UK economy. But by soaking up issues of high grade mortgage-backed debt, it is helping the rebirth of more esoteric securitisations. It’s a benevolent, albeit unintended, consequence.
Wal-Mart’s banking twist curls through many cracks 8 Oct 2012 The retailer’s new venture with American Express looks a good option for poorer Americans lacking access to financial services. The card also may tempt bank customers with a model that’s neither credit nor typical debit. But with deposits uninsured, regulators must watch closely.
Greek banks need more than a megadeal to be a buy 8 Oct 2012 National Bank of Greece has offered to buy rival Eurobank in a share-swap. A deal with near-50 pct market share and colossal synergies is making investors salivate - the shares have rallied. But the combination’s benefits won’t easily translate into further share price gains.
Barclays rejig should be just the warm-up 4 Oct 2012 The UK lender’s investment bank arm is mashing fixed income and equities together and shaking up management. Boss Rich Ricci may be asserting his authority, but in reality the moves are just catching up with the rest of the pack. The really tough decisions have yet to be made.
New U.S. stress test needed: higher interest rates 4 Oct 2012 Don’t fight the Fed, the saying goes. The central bank is promising ultra-low rates into 2015. Yet the buildup of low-yielding debt on financial firms’ balance sheets means they may suffer badly if rates jump. The Fed aside, prudent bosses need to avoid fights with history, too.
EU banks still haven’t been properly stress tested 4 Oct 2012 The European Banking Authority’s latest stress test focused on sovereign woes, but not macro ones. The previous two had the opposite problem. The 2013 version should do both, as well as use consistent risk-weights of bank assets. Without all that, fear will still stalk investors.
Bank "de-regionalisation" adds to euro zone risk 4 Oct 2012 Peripheral EU banks kept buying more of their own sovereigns’ debt between December and June, new data shows. With yields sky-high that’s a nice earner, and keeps governments happy. But if the euro zone breaks up, they will have tightened the noose round their own necks.
Bankers should be made to eat their own stew 2 Oct 2012 The EU’s Liikanen review says managers should receive part of their compensation in the form of their own banks’ bail-in bonds. Since such debt would plummet if the bank needed a rescue, it would make bosses more alive to the risks their institutions are running.
Ring-fencing could reinforce EU banking disunion 2 Oct 2012 EU banks should fence off their trading assets, a European Commission advisory group says. That looks more like the tough UK Vickers reforms than banks had expected. The risk is national regulators get even more tribal in protecting their own, instead of embracing banking union.
Maybe Jamie Dimon wasn’t so clever with Bear 2 Oct 2012 JPMorgan’s CEO looked shrewd four years ago by sticking the Fed with the collapsed investment bank’s worst-looking mortgage assets before agreeing to buy it. Not only did those securities wind up making money, but New York’s top lawman just showed how Bear’s legal risks persist.
Brazil’s lending war leaves both sides looking bad 1 Oct 2012 Browbeating Bradesco and Itaú into slashing credit card rates is President Dilma Rousseff’s latest victory in making lending more affordable. But banks may raise other fees instead. And they want to lend more to riskier customers. It’s hardly a path to a stable banking system.
U.S. banks securing some deserved debt relief 1 Oct 2012 A rule that forces them to book gains and losses on their own liabilities may at last be scrapped. At best, the accounting standard, implemented just ahead of the crisis, is a needless distraction - at worst, a way to mask a bad quarter. Its demise is overdue, but welcome.
Alpha stakes claim to be least-bad Greek bank 1 Oct 2012 The Athens-based lender is close to acquiring Emporiki, Credit Agricole’s Greek unit. The terms suggest Alpha will add market share muscle and gain synergies for minimal outlay. But investors are likely to fight shy until they know how Greek banks will be recapitalised.