Nomura offers tantalising glimpse at mediocrity 1 Feb 2024 Japan’s vibrant market helped the investment bank churn out quarterly earnings in line with its 2025 target. Boss Kentaro Okuda’s job now is not just to sustain the performance but to improve the ho-hum 6.2% return on equity that came with it. History is not on his side.
Santander progress yet to show up where it counts 31 Jan 2024 The $65 bln lender has already hit its 2025 profitability targets, yet still trades below tangible book value. Investors may fear risks like European rate cuts, or they might not buy Santander’s strategy. Until they award a higher valuation, boss Ana Botín’s job is incomplete.
Capital Calls: HSBC, Delivery Hero 30 Jan 2024 Concise views on global finance: The global bank will pay a 57 mln pound penalty for misreporting depositor protection data; the Frankfurt-listed meal delivery company has sold a 4.5% stake in rival Deliveroo, at a loss.
JPMorgan is a rare palace that warrants intrigue 26 Jan 2024 Most whispers about CEO succession amount to idle gossip, but Jamie Dimon’s management shake-ups could lead to a world-changing decision. His swagger has helped expand the $4 trln bank’s clout in the financial system and it’s increasingly doubtful his replacement will sustain it.
Commerzbank stake sale would risk M&A impasse 25 Jan 2024 Berlin may consider offloading its 15% stake in the German lender. Deutsche Bank and UniCredit are obvious potential buyers, but higher rates have made a full-blown bank merger less appealing. A market disposal would present prospective suitors with a dilemma.
Take China’s easing signal with a pinch of caution 25 Jan 2024 Beijing is releasing $140 bln of liquidity at banks, trimming some lending rates, and talking up measures to boost the appeal of stocks. It is also pressing on rebalancing the world’s second largest economy. In a grand overhaul, short-term pain can only be managed to a point.
Capital Calls: Microsoft’s Russian hacker 22 Jan 2024 Concise views on global finance: The $3 trln tech firm disclosed that a nation-state hack accessed leaders’ email, saying it showed the need for potentially “disruptive” measures. It’s a worrying acknowledgement of the still-vague costs of geopolitical tensions for tech giants.
Private credit gets the slice-and-dice treatment 19 Jan 2024 Managers like Blackstone and Blue Owl are selling ‘collateralised loan obligations’ backed by privately issued debt. Such alchemy, common in traditional lending, helps lenders raise cheap funds. It also adds complexity, and makes private credit more dependent on flighty markets.
BoE can counter banks’ unfriendly rate fire 12 Jan 2024 UK lenders like HSBC think lower borrowing costs are coming and have slashed five-year mortgage payments below 4%. That makes it harder for the Bank of England to slay inflation and, in fact, may delay any cuts. Governor Andrew Bailey could ask the City to reward savers as well.
Bitcoin ETFs only entrench one frivolous use case 10 Jan 2024 The SEC finally greenlit BlackRock, Grayscale and other funds to track the crypto price, with trading due to start this week. It’ll be easier to make – and lose – money in the volatile digital asset, but it’s no closer to being a currency, store of value or network for new apps.
Wall Street brings gun to Basel knife-fight 10 Jan 2024 JPMorgan and peers have good reason to be livid over proposed US bank rules. Some planned changes would punish them unduly, clash with existing controls, and effectively hand business to foreign rivals. With logic on their side, the risk is that banks overplay their hand.
Citi shows China too big for Wall Street to snub 5 Jan 2024 The $100 bln US lender aims to launch an onshore investment bank this year, per Reuters, even as established Western rivals turn cautious. Citi’s move underscores a simple, timely fact: despite geopolitical, economic and data concerns, the People’s Republic is a must-play market.
Capital Calls: India’s bank payouts 3 Jan 2024 Concise views on global finance: A proposed overhaul of two-decade-old dividend rules for the country’s lenders adds a flourish to a successful bad loan cleanup.
Convertibles will be 2024’s hot financial model 2 Jan 2024 Hybrid bonds, which fueled hedge fund billionaire Ken Griffin’s rise, sputtered after a $370 bln Covid-era boom. Refinancing needs are revving them back up as interest-cost savings lure new issuers like Duke Energy. New features should tempt investors to ride off with them again.
Goldman’s partnership is too much of a good thing 28 Dec 2023 The arcane and elite 420-member group bolsters the bank’s cachet, but sometimes exerts power that’s out of sync with other shareholders. Boss David Solomon already answers to his board, clients and 45,000 other employees. He would do well to cut the inner circle down to size.
Mega-bank M&A goes from impossible to imaginable 28 Dec 2023 After 2008, CEOs saw investment-bank deals as risky while regulators saw them as dangerous. UBS will prove otherwise if it safely and profitably absorbs Credit Suisse. Imitators will not get the same sweet deal, but targets like SocGen and Barclays at least come cheap.
Capital Calls: Back from the USSR 20 Dec 2023 Concise views on global finance: Austrian bank Raiffeisen’s 1.5 bln euro plan to swap assets with sanctioned billionaire Oleg Deripaska is smarter than it looks.
Capital Calls: Cevian tries ‘relaxivism’ at UBS 19 Dec 2023 Concise views on global finance: The pushy European investor has bought shares worth around 1.2 bln euros in the Swiss bank, equivalent to a 1.3% stake. Yet it seems happy to sit back and let UBS management execute their strategy.
StanChart M&A theory will finally become reality 19 Dec 2023 For years, the bank run by Bill Winters was cheap but dysfunctional. Now, it’s producing significantly higher returns on tangible equity but the valuation remains low. If that persists in 2024, it will be hard for suitors like First Abu Dhabi Bank to resist launching a bid.
Capital Calls: MUFG Down Under 18 Dec 2023 Concise views on global finance: The Japanese finance group’s latest overseas pounce is a $740 mln agreed deal for Link Administration, an investor services firm with three years of failed takeovers behind it.