Standard Chartered selloff has gone far enough 8 Aug 2012 Accusations of sanctions busting and a threat to its New York licence wiped almost a quarter off the bank’s market value. StanChart’s squeaky-clean reputation will be hard to regain. But emerging market growth - and perennial takeover speculation - should support the shares.
StanChart anti-U.S. rant will resonate 8 Aug 2012 The reported denunciation of “f—ing Americans” shows a disrespectful attitude to the U.S. ability to impose financial rules well beyond its own borders. It’s hard to fight against the economic superpower, but the cavalier U.S. approach could eventually be self-defeating.
StanChart can’t avoid the long arm of the Lawsky 7 Aug 2012 The New York state regulator threatens to yank the bank’s license over claims it hid Iranian transactions. It’s a brash move that grabs the spotlight from federal enforcers like the DOJ. But if StanChart wants to do business on Wall Street, it has to play by local rules.
StanChart sanction crisis poses cultural questions 7 Aug 2012 The bank strongly rejected a U.S. regulator’s claim it hid $250 bln of payments for Iranian clients. But communications quoted in the probe suggest an arrogant, dissembling culture. With StanChart’s top team little changed since then, the burden of proof lies with the bank.
StanChart joins banking march into mire 6 Aug 2012 New York regulators accuse the UK-based lender of covering up $250 bln of sanctions-busting transactions with Iran. It’s a big setback for one of the last global banks to have dodged financial and legal woes. Even just a fine for StanChart will leave the industry lacking halos.
Itaú’s aims would be badly served by Citizens 6 Aug 2012 The Brazilian bank has been tipped as a possible buyer for the U.S. retail arm of RBS. While Citizens might come cheap relative to Itaú’s own valuation, competing in a saturated country with the likes of Wells Fargo and BofA would be unwise. Better to stick with emerging markets.
Knight makes most of an abysmal situation 6 Aug 2012 The $400 mln rescue underscores the painful cost of its trading debacle and dilutes existing investors. But the saviors CEO Tom Joyce assembled include a good mix of rivals and clients. That should give him scope to rebuild Knight without having to bow to a rapacious cabal.
Hugo Dixon: How to clean the banking cesspit 6 Aug 2012 Faced with a stream of financial scandals, the public is growing impatient with the slow pace of change. Some pundits want to clear out the entire old guard and break up the banks. While something must be done, these knee-jerk approaches are not the best way forward.
Bank breakups – a guide for the perplexed 3 Aug 2012 Sandy Weill created the Citigroup financial supermarket in 1998 by calling the bluff of U.S. lawmakers and ignoring the Glass-Steagall Act, which limited what banks could do. Washington soon repealed the law. Now, Weill says big banks should be broken up. What gives?
Time for UK government to hold its nerve over RBS 3 Aug 2012 Weak domestic growth and redressing mis-selling and technical glitches pushed the UK bank further into the red in H1. Though rate-rigging liabilities are a concern, RBS’s shift from shaky to secure bank is almost complete. Strengthening the state’s grip would be a costly error.
Goldman shows not all innovation in finance is bad 2 Aug 2012 A $9.6 mln loan to the Big Apple is a canny use of pocket change. The bond will yield a tidy profit only if criminal recidivism in the city declines. It may be PR, but Goldman has a chance to prove not all Wall Street concoctions are weapons of financial mass destruction.
French banks only solve first existential crisis 2 Aug 2012 Euro zone turmoil gave BNP Paribas and Societe Generale a mighty scare a year ago. First-half results show how they have turned their capital and liquidity positions around. But the euro is far from fixed, and they are still lumbered with subscale investment banking arms.
Barclays’ Qatari baggage gets even heavier 2 Aug 2012 Gulf funds spared the UK bank a state bailout in 2008. But the capital always looked costly and an “advisory” relationship with Qatar slim value. If a regulatory probe into disclosure discredits what’s left of Barclays’ top team, the deal will look even more like a Faustian pact.
Loser Citi lawsuit sends SEC back to drawing board 1 Aug 2012 A jury cleared a banker of misleading CDO investors, while also urging the U.S. watchdog to bring more financial fraud charges. But quantity isn’t the issue. The SEC has filed over 100 crisis-related suits. What’s too often lacking, as with the Citi example, is a solid case.
StanChart finds buffer against Asia slowdown risk 1 Aug 2012 The emerging market lender delivered its customary strong growth in the first half, with income up 9 percent. The worry is that continued expansion comes at the expense of ever-higher bad debts. But StanChart is also benefiting as European rivals retreat from Asia.
Deutsche Bank still lagging in capital race 31 Jul 2012 The German lender is responding to the investment banking slowdown by slashing 3 bln euros off costs. But investors have to wait until September for the vital details. And Deutsche’s new co-CEOs have missed a chance to lift the bank’s capital buffers closer to those of its peers.
Facebook costs UBS some of its new friends 31 Jul 2012 The Swiss bank worsened an already tough quarter by losing 350 mln Swiss francs on the social network’s IPO. UBS has boosted its capital and is once again attracting wealthy clients. But the risk of further nasty surprises in its investment bank casts a shadow over its recovery.
Worst global Dodd-Frank fears start to take shape 30 Jul 2012 The Swiss are balking at new U.S. derivatives rules, the first overseas authorities to sound off about them. But U.S. watchdogs want foreign arms of domestic dealers to follow the new plan. If global regulators won’t sign up, however, it will create an unlevel playing field.
HSBC held back by developed-world headaches 30 Jul 2012 The bank’s earnings are strong enough to absorb a $2 billion charge for mis-selling in the UK and money-laundering in the U.S. After HSBC’s sub-prime woes, it’s another reputational stain. Yet the setback will only reinforce the bank’s strategic shift to emerging markets.
Jamie Dimon to Sandy Weill: drop dead 27 Jul 2012 A shake-up at JPMorgan leaves investment banking boss Jes Staley the odd man out. More significantly, Dimon is lauding the idea of knitting together JPMorgan’s parts more tightly just as his former mentor reignited a push to break up big banks. Consider the fight fully rejoined.