Commerzbank u-turn on Eurohypo makes sense 15 Nov 2005 The German bank was talking about selling down its E2bn stake in the mortgage lender. Now it s snapping up almost all of the rest. Depending on the price Commerzbank ends up paying, thought to be about E5bn, this could be a relatively safe use for its excess capital.
Morgan Stanley tries to turn itself into Goldman 14 Nov 2005 That is one reading of the new strategy involving a much bigger focus on proprietary business that Mack is expected to unveil. Morgan clearly needs to make more money, not least to win the talent war. But piling on risk involves, well, more risk.
Beware the rally in UK banks 14 Nov 2005 The sector may look like it has momentum, but really it's just recovering from a selloff driven by hedge funds last month. It is hard to envisage any good news to justify a rerating. The risks remain firmly on the downside.
DrKW results show why restructuring is needed 11 Nov 2005 Sure, the Q3 figures were better than the Q2 bloodbath. But only because DrKW cut prop trading, which meant its revenue lagged peers. That's DrKW's problem in a nutshell: it isn't profitable enough. This is why integration with Dresdner makes sense.
Braggiotti comes back to bite Lazard 8 Nov 2005 The Italian banker s plans to create his own firm from a Milanese brokerage are backed by a list of former Lazard investors and clients. If these characters are backing Braggiotti, how long before Lazard employees follow suit?
Dresdner integrates DKW with corporate bank 8 Nov 2005 The German bank used to talk about spinning off its investment banking arm. Now it is crunching it into the midmarket banking operations. This isn t necessarily a negative move. Much depends on why it is being done and who will run it.
NYSE should force vote on Sovereign deal 7 Nov 2005 Sovereign Bank should be made to consult shareholders on the sale of a 19.8% stake to Santander. Doing otherwise would allow Sidhu to get away with gaming change of control rules.
Still early days for CSFB recovery 2 Nov 2005 Credit Suisse s investment bank has delivered an impressive performance in the third quarter. But market conditions favoured the areas targeted by Wall Street s comeback kid. The real test will be how CSFB copes with tougher markets.
UBS u-turn on fixed-income strategy adds up 1 Nov 2005 Six months ago, the Swiss bank was trumpeting its decision to pull back from fixed income and commodities. Now it s going the other way. But a change of tack is wise, given thirdquarter results again show UBS punching below its weight in investment banking.
Houlihan Lokey sells out to Japan’s Orix 31 Oct 2005 The significance of the $500m deal is that the US investment bank is a restructuring specialist. The Japanese appear to be positioning themselves for an era of increased corporate morbidity, which may be just around the corner.
New wave of US bank M&A starts on wrong foot 29 Oct 2005 Sovereign s $3.6bn takeover of New York s Independence destroyed value and ran roughshod over shareholders. A flat yield curve will tempt other banks to do deals. But they shouldn t take their cue from Sovereign and overpay.
Deutsche delivers sparkling trading result in Q3 28 Oct 2005 The bank s consistently excellent proprietary trading results belie fears about its exposure to this potentially volatile earnings stream. Deutsche should hit its 25% pretax ROE target this year. The risk is that it has curbed longterm investment in the franchise to get there.
Blackberries may go black 27 Oct 2005 The US Supreme Court dropped a bomb on the investment banking fraternity with its refusal to hear Research in Motion s copyright appeal. But not to worry. Before thumbs stop tapping on Wall Street it s likely a settlement will be reached, though RIM investors may not like it.
Santander courts trouble with US deal 24 Oct 2005 A stake in Sovereign Bancorp might not be the bargain it appears. There are good reasons for Santander to hold fire. Minority investments are no longer as popular. And it will be supporting a board which is in part to blame for Sovereign s discount.
La Caixa should be privatised 24 Oct 2005 Spain s biggest savings bank, or caja, is powerful, efficient, successful and profitable but also unaccountable. Gas Natural s hostile bid for Endesa has highlighted La Caixa s and other cajas political links. Privatisation is an obvious solution.
BPI reveals E1.8bn of controversial financing 20 Oct 2005 The beleaguered Italian bank invested E925m in hedge funds, some of which was used to buy BPI shares. Another E850m was lent to a property magnate, who owns BPI shares. No wonder shareholders have run for the exits.
JP Morgan speeds up Dimon’s succession 19 Oct 2005 The bank's stock has lagged its peers this year, so Sandy Weill's former protege needed a strong set of quarterly results. Having achieved them, he will become CEO six months early. But now he has no scapegoat if future results disappoint.
Merrill reports record quarterly results 18 Oct 2005 The bottom line certainly looks good. But how Merrill got there still leaves questions about its ability to generate revenue. The top line only grew because of rising financial income. The operating divisions were flat overall. Merrill is still a costcutting story.
Citigroup should consider a break-up 14 Oct 2005 The global banking group trades at a substantial discount to the sum of its parts. The reason? It's too big and complex to manage. The group thinks scale confers an advantage. It's not clear that it does. Unless Citi closes the discount, the calls for a breakup may grow
Deutsche’s shameful role in BPI bid exposed 13 Oct 2005 It helped the Italian bank artificially inflate its capital strength before a bid for Antonveneta, Italy's stock market regulator has found. Coming so soon after Parmalat, Deutsche Bank should have learned it doesn t pay to gamble your reputation in return for fat fees in Italy.