Goldman should relish being lost in crowd for now 17 Apr 2012 The firm is used to standing out, but couldn’t match JPMorgan’s Q1 investment banking returns. Goldman’s prudent approach to risk and taxes, however, may offset concerns over treating clients like muppets. It could be welcome relief after a spate of governance and image problems.
Temasek tinkering could put StanChart in play 17 Apr 2012 The Singaporean fund’s latest asset reshuffle has revived talk about its $10 bln stake in the emerging market lender. Banks from the U.S. to Japan would like to get their hands on StanChart. But with the exception of China’s biggest lenders, most would struggle to pull it off.
Brazilian billionaire banker tests investor mettle 16 Apr 2012 Just days ahead of an IPO of his BTG Pactual, Andre Esteves has been fined for insider trading by Italian watchdogs. The firm shrugged off the case and says the boss will appeal. But JPMorgan’s Ian Hannam resigned to fight similar charges. The risks look big for this high-flyer.
Citi gets back on slow track to bumper returns 16 Apr 2012 The megabank recovered in Q1 after a dismal end to 2011 and a poor showing on the Fed’s stress test. That should reassure shareholders it’s making its way to handing back $12 bln a year to them. But with equity returns low and bad assets still a drag, it probably won’t be soon.
Maybe banks needn’t overly fear new U.S. watchdog 16 Apr 2012 Crass resistance to the Consumer Financial Protection Bureau looks even more overblown following one of its first big proposals. The agency will crack down on deceptive practices on riskier loans but is OK with banks charging fees for them. That strikes a reasonable balance.
Wells Fargo justifies its premium to JPMorgan 13 Apr 2012 The top two U.S. banks performed solidly enough in Q1. But both posted ho-hum 12 pct returns on equity flattered by government programs and extra risks. Wells, however, has better core growth and relies less on trading. That makes it deserving of a higher valuation than JPMorgan.
EU bonus assault would lead banks astray 13 Apr 2012 Brussels is reportedly mulling a proposal to cap bonuses at 100 pct of salary. Investment banking still has a problem with the way it pays staff. But this plan will put further upward pressure on salaries and limit flexibility. That’s clearly the wrong solution.
JPM, Wells boards are hurdle to governance revamp 12 Apr 2012 Both banks navigated the crisis well. But that doesn’t mean they don’t need separate chairmen and CEOs. The firms’ boards are stuffed with company honchos used to holding both titles. It may take shareholder votes to open their eyes to the clear merits of splitting the top jobs.
Lloyds forced disposals inch towards quasi-auction 12 Apr 2012 The race to buy 632 branches the UK bank must sell to meet state-aid rules had seemed all but won by the Co-op mutual group. Now new entrant NBNK is detailing a rival pitch. The odd nature of the two bidders may rule out a hot auction. But at least Lloyds has a choice of buyer.
Barclays short of options over pay time bomb 11 Apr 2012 The UK bank faces a potentially toxic protest vote against seemingly unjustified bonuses for CEO Bob Diamond and CFO Chris Lucas at its AGM. Barclays tends to tough out such rows. But this time it could mitigate its fault by being an early adopter of proposed UK pay reforms.
Greece’s battle to save its banks gets creative 11 Apr 2012 Greek bank shares jumped on hopes that bailout cash might be used to insure lenders against sovereign losses, rather than just finance immediate recaps. That’s no magic bullet. But if this cuts lenders’ capital shortfalls, some equity investors could yet dodge total annihilation.
Will Zaoui Freres join the boutique brigade? 10 Apr 2012 Yoel Zaoui, one of Europe’s top M&A bankers, is leaving Goldman Sachs. The firm’s reputational battering hasn’t stopped it bagging big deals, nor will this. But it may mean a bit more competition if he joins older brother Michael to create yet another go-it-alone advisory firm.
World Bank wackiness explains odd U.S. choice 9 Apr 2012 If the competition for the World Bank’s presidency were a normal process, Jim Kim wouldn’t stand a chance. But geopolitics and the bank’s mandate explain why the doctor who couldn’t stop Dartmouth frat boys from consuming “vomelets” may actually be an inspired choice.
Jamie Dimon lets smaller rival grab his pulpit 5 Apr 2012 The JPMorgan chief’s closely watched annual shareholder letter falls a bit flat this year. It rehashes old gripes and doesn’t lay much new ground. Step up Robert Wilmers, boss of regional bank M&T, whose take on the state of finance makes it the must-read missive of the season.
Rothschild Anglo-French union secures family grip 5 Apr 2012 The investment bank is merging its French and British subsidiaries into a single listed vehicle, Paris Orleans. But the new group’s limited partnership structure guarantees airtight family control - regardless of who takes over from current chairman David de Rothschild.
Wall Street hangs in limbo despite market rebound 4 Apr 2012 Investment banks have started 2012 far better than they ended 2011. Revenue should be higher in all but M&A and equities. A more stable Europe has helped. But even if the recovery sticks this time, most firms will need considerably more trading and deals to earn decent returns.
Who will fill Ian Hannam’s shoes? 4 Apr 2012 The JPMorgan banker’s resignation leaves a hole in the London market. Candidates to fill it are rival investment banks and Hannam himself, assuming he clears himself of market abuse charges. But it’s also possible that some of the business he generated just won’t come to London.
JPM insider non-trading case puts banks on notice 3 Apr 2012 Britain’s regulator has fined Ian Hannam for sharing price-sensitive information about a client. The penalty looks harsh since the JPMorgan dealmaker’s slip was accidental and nobody traded on the tip. Even if Hannam wins his appeal, advisers may have to re-think how they work.
EU banks should disclose ECB earnings boost 3 Apr 2012 Some lenders are enjoying a temporary uplift from buying high-yielding sovereign debt financed by the central bank’s cheap three-year loans. Banks are reluctant to spell out the extent of the improvement. But as first quarter results approach, investors should demand clarity.
Goldman follows board stitch-up with smackdown 2 Apr 2012 The Wall Street firm just avoided a push to split the chairman and CEO roles by simply renaming its top director. Now it has given the job to the wrong guy. James Schiro is already on the board, and his record hardly proves he’ll ask tough questions. Goldman isn’t getting it.