Morgan Stanley’s $700m deal for mortgage firm stacks up 9 Aug 2006 True, the mortgage market is slowing. But as a mortgage servicer, Saxon is not so exposed to rising credit concerns. Morgan Stanley will be able to service its $45bn mortgage portfolio inhouse. Savings from this should more than cover the deal premium.
ECB language games point to faster rate hikes 4 Aug 2006 The Eurozone Central Bank said it would monitor very closely . The very is significant. It translates into action in October. The ECB has to be especially careful with its words. As a laggard in global tightening, it can t afford to lose its credibility.
RBS’s charm offensive snags on soft US performance 4 Aug 2006 It's easy to see why investors have gone cool on the UK bank doing big foreign deals. The Charter One purchase in the US hasn't delivered. Sir Fred Goodwin has foresworn his overseas adventures. That will help, but the US will need to start performing before he is let out again.
Barclays’ strong H1 builds case for higher rating 3 Aug 2006 The UK bank s investment businesses had a bumper period. And the group appears to be getting to grips with its UK retail weak spot. With Barclays now reaping half its earnings abroad, there's less pressure to do a deal. The discount to other UK banks looks unjustified.
Credit Suisse misses chance to get investors onside 2 Aug 2006 The Swiss bank's traders never looked likely to repeat their bumper Q1. Even so, the 36% dip in Q2 revenues looks soft compared with peers. This may hurt Credit Suisse s chances of closing its discount to UBS and opening a premium to Deutsche Bank.
Deutsche Bank hit by Q2 equity trading loss 1 Aug 2006 It s not a disaster for the German bank. But it does disclose a higherthanexpected dependence on prop trading. That not only means more of its profits come from low value sources. It s also more exposed to any trading downturn.
ABN fails to exorcise its efficiency demons 31 Jul 2006 Rationalisation would make sense. ABN boss Groenink seems to be edging that way, with his comments about focusing on Italy. He should act. The Q2 results gave more fire to sceptics who see the Dutch bank as a group of subscale banks scattered round the globe. Costs remain high.
HSBC’s investment bank hasn’t proved itself yet 31 Jul 2006 The division had a solid first half with revenues up 25%. But it s far too early for the global bank to take its foot off the pedal. The improvement is patchy and is heavily dependent on trading. HSBC is still a fair weather investment bank.
Credit Agricole made to pay up for Emporiki 27 Jul 2006 The French bank s raised bid has earned it the backing of the Greek government, putting it in on course to scoop the E3bn deal. But the sweetened terms leave Credit Agricole looking generous. That may haunt the bank next time it opens its cheque book.
Corriere ouster symptom of Italy’s ills 24 Jul 2006 The forced resignation of Corriere s globallyrespected boss illustrates the incestuous relationship between Italy s media and business. If the country is to modernise, it needs bosses like Vittorio Colao and a media that isn t so intertwined with big business.
Bernanke has restored his credibility, right? 20 Jul 2006 The Fed chief s latest words on inflation have gone down well in the markets a nice change from Bernanke's initial stumblings. But, in fact, he is taking quite an optimistic view of inflation prospects. If he is wrong, his credibility will be severely challenged.
JPMorgan heads in the right direction 19 Jul 2006 But JPMorgan is slowly starting to deliver. Its returns are improving, and even showing signs of consistency. True, the bank still doesn t eke out as much money as its peers. That s why it rightly trades as the dog of Wall Street.
Goldman’s Europe reshuffle may strengthen client side 19 Jul 2006 The appointment of Gnodde to run the region alongside Sherwood seemingly indicates a desire to balance the power of the traders. This looks good PR following the appointment of Blankfein, a trader, to run the firm globally and a series of corporate mishaps in Europe.
Merrill’s discount to Citi is unwarranted 18 Jul 2006 Despite the tumult in the stock market, the investment bank reported robust results in equities and M&A, and record overall revenues. Yet its book value trades at a lower multiple than lacklustre Citigroup. That seems undeserved. Yet it undeservedly trades at a lower multiple of book value than lacklustre Citigroup.
SG’s Cowen IPO debuts poorly 13 Jul 2006 The boutique broker s stock dropped 5% on its debut. And that was after the French bank cut the price by almost a fifth. That should dampen enthusiasm for upcoming share sales from rivals like Evercore Partners and Keefe Bruyette.
UK government looks for pennies from heaven 11 Jul 2006 Involuntary contributions from the dead and forgetful aren t something for nothing. They re a manipulation of the money supply. Well, it wants to take £400m from dormant bank accounts to fund good causes. The sum is small and the economics are poor. Involuntary contributions from the dead and forgetful aren t something for nothing. They re a tax.
Goldman’s private equity boss retires hurt 7 Jul 2006 Sharp s decision to stand down is understandable, given his reluctance to commit to a new fund for another five years. But he was also the main target of the recent spank from Hank and may not have enjoyed having his wings clipped.
Credit Agricole withdrawal leaves A&L on the shelf 5 Jul 2006 The French bank is right to scrap plans to buy the UK mortgage lender. It would have paid a rich price for a weak bank in a fierce market. This should help Credit Agricole get investors onside. But without an obvious suitor, A&L may struggle to hold on to much of its premium.
Will commodities M&A boom end like dotcom one? 30 Jun 2006 Companies like Phelps and Anadarko are making huge bets by financing takeovers with heaps of debt at the commodities peak. The buyers are hedging their bets. And they are buying real assets with synergies to reap. But it still looks like boomtime behaviour.
Morgan Stanley’s gap to Goldman widens 21 Jun 2006 While it improved its position in advisory and equities, Goldman s stunning fixedincome trading machine has kept it leaps ahead. The firm s core investment banking business made strides in the Q2 to narrow the revenue gap with its chief rival.