Spain misses golden chance with bank tests 28 Jul 2011 The problem in Spain was not excessive softness on sovereign exposure, but on property. So long as the nettle isn't fully grasped, confidence in the sector will remain low and the government itself will be vulnerable to infection.
Fixed income doubts will hamper Credit Suisse 28 Jul 2011 Slow markets, tough capital rules and a strong franc led the Swiss bank to cut 2,000 jobs. But it still wants to be a big fixed income player, despite falling revenue. Its ibank will struggle to make its cost of equity. The 15 pct ROE goal for the group is a tall order too.
PIGS turn European banks into lemmings 27 Jul 2011 Most lenders spent the past year slashing their exposure to the euro zone periphery. Yet stress test disclosures show a number ramped up their holdings. Technical factors are partly to blame. But some banks have also been forced to inflate their portfolios for their own survival.
Santander must do more to protect itself from Spain 27 Jul 2011 Profit at the Spanish bank fell short of expectations because of a oneoff charge in the UK. But Spain is the real worry spot, even if it is a fraction of Santander's global business. It should bulletproof its business at home by increasing provisions.
UBS right to concede trading ambitions to Deutsche 26 Jul 2011 The Swiss bank won't make its midterm 15 billion Swiss franc pretax profit target. The German lender repeated its 10 billion euro pretax goal. Deutsche's bet on being a global trading powerhouse looks like paying off. UBS should shape its ibank to support the private bank.
Bank of Ireland’s new backers aren’t loopy 25 Jul 2011 The Irish lender is getting 1.1 billion euros from asyetunnamed overseas investors. BoI still has big funding problems, but its main difficulty is its weak sovereign. If Ireland's politicians can keep their credibility, buying in now makes longterm sense.
Vocal shareholders quieted but not silenced 25 Jul 2011 A U.S. court quashed a rule making it easier for investors to challenge corporate boards. It's a right worth fighting on for but the SEC's plate looks pretty full. All isn't lost, though. The watchdog provided an alternative, if clumsier, path to oust unwanted directors.
Joe Ackermann shouldn’t be Deutsche Bank chairman 25 Jul 2011 The chief executive of Deutsche Bank is to be succeeded by Anshu Jain and Juergen Fitschen. But Ackermann remains in line to lead the German lender's supervisory board. He would be a poor choice. He could prove to be an interfering backseat driver.
Banks escape Greece with a minor trim 22 Jul 2011 Large lenders have signed up to a plan that gives them a 21 pct haircut on their Greek bonds. Though ratings agencies will declare it a default, the outcome is better than the 50 pct loss markets had been pricing in. But unless Greece recovers, the pain has only been postponed.
Morgan Stanley’s trading win is a nice distraction 21 Jul 2011 A decent fixedincome showing helped the bank beat Q2 estimates and show up archrival Goldman. Strip out funnies, though, and it's less impressive. Either way, trading targets will have less impact on Morgan Stanley's bottom line than cranking wealth management up to full speed.
Regulators chip away at U.S. financial reform 21 Jul 2011 Tim Geithner says the president should veto Republicans' efforts to defang DoddFrank. His boss may get that chance if reelected next year. But rulewriters are already making the reforms weaker than their creators intended. That in turn could cool the desire to roll them back.
Rigid banker pay will turn slowdown into cull 21 Jul 2011 Sluggish markets and higher capital charges are forcing investment banks to cut expenses. In the past, they could save cash by pruning bonuses. But bigger base salaries and more deferred compensation mean banks have little choice but to axe headcount.
EU banks’ stress test hangovers aren’t equally bad 20 Jul 2011 The European Banking Authority's health check of the sector left a number of banks looking undercapitalised. Over half of them, however, can point to actions they are taking that will improve matters. But not all the banks' capitalraising schemes look equally solid.
Year-old Dodd-Frank punches, if below its weight 20 Jul 2011 With a final 848 pages of law and over 3,300 pages of rules (and counting), the U.S. financial reforms passed a year ago are cumbersome. But they can't be written off as a useless doorstop. Despite flaws and financial industry bleating, sound new measures are taking shape.
BofA boss needs to kick it up a notch – or two 19 Jul 2011 CEO Brian Moynihan has spent much of his tenure cleaning up his predecessor's mess. Despite the yeoman efforts, he hasn't persuaded investors he's turning the firm around and another lackluster quarter hasn't helped. He may be running out of time to win them over.
Goldman bankers overshadow stumbling traders 19 Jul 2011 Fixed income revenue declined a whopping 63 pct in Q2, causing the bank to miss Wall Street's expectations for the second time in a year. Goldman's M&A advisers delivered the only bright spot. If the trend keeps up, it could rekindle an internal battle for dominance.
Greenhill misplays its mini-crisis hand 18 Jul 2011 The boutique's decision to announce earnings early, and on a Sunday, smacks of panic in response to investors' overreaction to a few senior departures. With no deposits or dodgy assets, Greenhill had time to play with. It's not the best example to set for potential clients.
U.S. consumer agency enters world leaderless 18 Jul 2011 Banks didn't want Obama to pick a Harvard lawyer to run the new U.S. consumer finance regulator. They won't like the Ohio attorney general who's getting nominated much better. Especially in the current climate, Republicans will likely give the former quiz show champ the buzzer.
Spain’s Bankia set to pass its own stress test 18 Jul 2011 The country's largest savings bank has cut its IPO price by 15 pct to drum up more demand from foreigners. The snag is that it will raise less capital. But a successful float is crucial to restructuring Spain's banking sector. Getting it away in a dire market is no small feat.
Europe’s banks could cope with a Greek haircut 18 Jul 2011 If EU stress tests had used market prices for sovereign bonds, 27 lenders would need 25 bln euros of extra capital much more than in the official tests. But that is still manageable. The only real problems would be in Greece itself and Cyprus.