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.
Citi’s latest management reshuffle insufficient 22 Jan 2007 Sallie Krawcheck is stepping aside as CFO. Like Chuck Prince, she was installed to steer the bank through regulatory storms. They succeeded. But if the board insists on adhering to its flailing conglomerate model it must more fully examine whether it has the right team in place.
Citigroup model isn’t working 19 Jan 2007 Fourthquarter results provide yet more evidence. Unlike another conglomerate, GE, top line growth isn t creating earnings leverage. Chief Chuck Prince says the megabank is engaged in a multiyear effort to rebuild. He d serve investors better by dismantling Citi. Fourthquarter results provide yet more evidence. Unlike another conglomerate, GE, topline growth isn t creating earnings leverage.
ABN gets in a muddle again in Italy 19 Jan 2007 It s hard to see why it s in the Dutch bank s interest to reinstate Cesare Geronzi as Capitalia s chairman. Geronzi is resolutely opposed to ABN buying the bank. This mystifying decision suggests that ABN s Italian strategy is in a mess.
Unicredit takes a bath on Fastweb 18 Jan 2007 The Italian bank has thrown caution to the winds in its E220m placing of shares in the broadband group. And it looks to have lost a packet. It s unclear why Unicredit went in so hard. It could be a cockup. Or perhaps it wanted to stay in with Fastweb boss Scaglia.
Merrill catches up with Wall Street rivals 18 Jan 2007 The investment bank no longer trades at a hefty pricetobook discount to peers. Only Goldman now commands a higher multiple. Chief Stan O Neal s call to crank up trading risk and private equity has paid off. Now he has to show that it s sustainable.
Fed faces a sticky dilemma 18 Jan 2007 Inflation is a lot stronger than expected. This may necessitate a rate hike rather than the cut the market is anticipating. Hiring is strong but activity indices and productivity are weak, suggesting the Fed s soft landing may be imperilled.
Dimon’s success paves way for JPMorgan’s next deal 17 Jan 2007 He s had a good first year in charge, fulfilling promises like ironing out trading volatility and adding commodities expertise. Earnings have impressed, and the stock has soared. Investors may still be wary, but Dimon is building a currency for his next big deal.
Chuck Prince packs up Citi’s umbrella 16 Jan 2007 Citigroup is refashioning its image by dropping its famous red umbrella and changing its name to simply Citi . The umbrella has come to represent an unwieldy set of businesses. Maybe Prince should consider disposals rather than rebranding.
Regulators pounce on Commerce’s insider dealings 16 Jan 2007 The Fed and the OCC are investigating deals involving the New Jersey bank s board, executives and others. It might be old news. Commerce details a ton of deals in its proxy. But fears the regulators have found something new might keep investors away from the stock.
Deloitte’s Parmalat settlement shows hidden value 16 Jan 2007 The E115m payment may seem small. But Citi s and Bank of America s deep pockets have still to be picked. Parmalat s shares are pricing in only a 7% recovery from its E21bn of claims. That s too pessimistic.
Tucker fights back at Pru 16 Jan 2007 Investors have been calling for the insurer s boss to do something about its underperforming UK life business. Seeking to release the £10bnodd of surplus assets in the life fund is an easy, if overdue, first step. The next moves will be harder.
BofA cries protectionism to fight US deposit cap 16 Jan 2007 There are better reasons than foreign takeovers to merit repealing a law that stops banks from buying more than 10% of national deposits. Ironically, BofA would probably use a change of the law to go after foreign rivals with desirable US assets, like Holland s ABN Amro.