Ponzi scheme’s latest victim: Bear Stearns 20 Feb 2007 A court has ruled Bear Stearns should have blown the whistle on Manhattan Investment sooner. But the firm did raise red flags. Bear Stearns must cough up $160m. But prime brokers have better reasons to scrutinise their clients than avoiding court penalties.
Barclays gets back on the front foot 20 Feb 2007 The UK bank s drive to shore up its weak spots is working. It s getting a grip on costs in UK retail and slowing provisions growth. That should help Barclays hold on to the rerating it gained last year. But getting further into investors good books may prove harder.
Fed shouldn’t adopt inflation target 20 Feb 2007 Bernanke is keen to follow the central bank fashion with a single numerical goal. That would make his life easier. But a simple life isn t good for bankers. They should worry about liquidity, crises and financial imbalances.
BBVA $9.6bn US deal has a whiff of empire building 16 Feb 2007 The Spanish bank is meeting its strategic aims with its buy of Compass Bancshares. But, at nearly 19 times earnings, it s paying richly. BBVA will have to work hard to make the deal add value, and get the support of its investors which the bank is again tapping for cash.
Credit Suisse boss goes out on a high 15 Feb 2007 Oswald Gruebel has surprised investors by retiring as CEO. But leaving now, as the group announces record results, has two advantages. It allows him to quit while he's ahead. And the strong performance of the investment bank unit makes its boss, Brady Dougan, a natural heir.
Geronzi and Arpe slug it out at Capitalia 14 Feb 2007 The Italian bank s chairman and its CEO would like to see the back of each other. Geronzi is opposed to a deal, while CEO Arpe is more pro. While it would be good if Geronzi went, Capitalia s shareholder pact stops either binning the other. A period of gridlock is in prospect.
Governments no match for markets in yen fight 13 Feb 2007 The Japanese currency keeps on falling 5% against the dollar since December. Investors like the highly profitable carry trade. European governments feel differently. But principles and fear keep them from intervening. They may come to regret this passivity.
UBS takes first step to making it up with investors 13 Feb 2007 The Swiss bank bounced back strongly in Q4. That will repair some of the damage wrought by bad call on US rates last year. Even so, UBS still looks to have more to do. It may not regain all its premium over peers until it shows it is firing on all cylinders.
Rothschild makes a schoolboy error 12 Feb 2007 The investment bank has been rebuked by the UK Takeover Panel for failing to warn a client that a stake above 30% triggers a full bid. This was Rothschild s third recent breach of the rules. It may suffer no financial loss, but the damage to its reputation is sure to hurt.
Can boutique bank stocks forecast M&A cycles? 7 Feb 2007 It s unlikely. Lazard and Greenhill are trading at or near alltime highs, which could imply the current boom is far from fizzling out. But being more reliant on M&A than larger rivals makes their stocks more volatile. That means they re unreliable longterm indicators.
Morgan Stanley’s the victor in Sulzberger spat 5 Feb 2007 Following a Morgan fund manager s criticisms of the newspaper s governance the Sulzbergers are pulling assets from the bank s custody. That may look embarrassing but it s really a great advertisement for the independence of Morgan Stanley s investment division.
Sberbank’s $12bn share issue looks like Rosneft re-run. 2 Feb 2007 President Vladimir Putin has endorsed the giant statecontrolled Russian bank's offering. He has said the shares are a good buy. Like with Rosneft last year, Sberbank looks to be picking a good moment to sell shares. But it is seeking a high price.
D.Bank’s efforts to broaden mix founder 1 Feb 2007 The attempt to beef up in asset and wealth management isn t paying off yet. Until it does so, the shares may struggle. The German bank did okay in Q4. But that was again down to investment banking and a little polish from oneoffs.
New recaps throw lenders a bone 29 Jan 2007 Several new loans designed to fund dividends to LBO shops have the option to pay interest in cash or in kind. They are extremely risky. So bankers are courting lenders with provisions that spur the borrowers to repay the loans quickly, most likely with proceeds from IPOs.
Mortgage lenders for sale: strong stomachs required 24 Jan 2007 Lower margins and credit quality have sent valuations plummeting. Yet some, like Barclays, are still willing to pay last year s prices. Such deals could pay off. But there is probably enough pain ahead for subprime lenders to deter all but the most optimistic buyers.
Rivals beat Citi at managing interest-rate headwinds 24 Jan 2007 That s partly because their larger cache of retail deposits allows them to fund their businesses more cheaply than the megabank can. Absent a dramatically steeper yield curve or a major US acquisition, Citi is likely to remain the laggard.
Barclay Bros smart to check into Intercontinental 23 Jan 2007 A bid by the reclusive property magnates for the UK hotels group seems unlikely. But their 5% stake may still prove a canny investment. Intercontinental is posting impressive growth. And if a bid materialises, the Barclays could be wellplaced to extract concessions.
Zaleski’s E4bn investment in Intesa may be worth following 23 Jan 2007 That s not just because the wily billionaire, who snapped up part of Credit Agricole s stake, has a track record of smart investing. The newly merged bank has great restructuring potential. As a friend of its chairman, Zaleski is well positioned to assess execution risks.
Goldman’s $1bn man steps down 23 Jan 2007 McGoldrick was the leading light in its special situations group which was rumoured to make about $1bn a year. His departure is a blow. But Goldman has a deep bench. And McGoldrick has anyway not been so active recently because of ill health.
Meet the hostile bid pitched at a 50% discount 23 Jan 2007 Hostile bids normally require fat premiums. But a Cypriot/Greek banking triangle involving Bank of Cyprus has spawned a discounted offer. The ploy will probably only buy time. That may be why Cyprus' archbishop has waded into the saga attempting to protect the island's bank.