Egg shares sink 9% on jump in bad debts 23 Feb 2005 The problem is the UK bank's unsecured personal loan book. Egg is promising to address this by tightening lending criteria. Egg s owner, Prudential, failed to sell it last year. This setback further dampens the prospects of a sale at a decent price.
Bankers resent regulatory arbitrage 21 Feb 2005 They say they are overregulated full stop. But what really gets them is the relative deterioration in their position. They have lost out to lightlyregulated private equity and hedge funds. Regulators should think about how best to close the gap.
Credit Suisse pleases with SFr6bn buyback 17 Feb 2005 The Swiss bank can comfortably afford this. It already has surplus capital. And the buyback has a lengthy twoyear timetable. But the harder and more important job is to improve operational performance in investment bank CSFB, whose Q4 results were mixed.
Citigroup five-point plan comes at a price 16 Feb 2005 The giant bank's answer to recent scandals is to impose a new culture that puts Citi's reputation above that of its individual units. But the plan could prove costly, both in terms of management time and potential lost revenues.
Sacyr throws in towel in fight with BBVA 16 Feb 2005 Giving up its attack on Spain s second biggest bank after it didn t get political support is good news for Spanish corporate governance. Not that Sacyr has come away emptyhanded. The construction group has pocketed a E150m capital gain from its raid.
Wasserstein should do more than cut pay 14 Feb 2005 Lazard s boss has cut pay to prettify its figures ahead of its IPO. But there s another problem: low productivity. Unless Lazard wrings more from bankers, it will struggle to compete with the best. But that s not easy.
Barclays settles CDO spat with Germany’s HSH 14 Feb 2005 HSH was seeking damages relating to a bundle of these esoteric credit instruments purchased from Barclays in 2000. Settling was sensible. HSH bought the CDOs when the market was immature and everyone was making rosy assumptions about its future.
Fazio hits back at EU critics 14 Feb 2005 Italy s central bank chief argues his banking system is more open than that of other European countries. But there is a big difference between investment and control. Italy has much to gain from allowing foreign banks into its domestic market.
Barclays unfairly hit by market quibbling 10 Feb 2005 Pretax profits rose 20%. But the market is disappointed because it was partly due to falling provisions. Moreover, costs are still rising. That's harsh. Lower provisions imply good credit quality. And cost growth, particularly in its investment bank, should reap future rewards.
EU steps up the pressure on Italian banks 9 Feb 2005 The European Commission is putting pressure on the Bank of Italy to drop its resistance to foreign takeovers of domestic banks. About time too. The fragmented Italian market is overdue consolidation. Foreign banks should be allowed to lead the way.
UBS cheery on investment banking outlook 8 Feb 2005 The Swiss bank's record Q4 result shows it's still reaping the rewards of investments made in the bear market when rivals were cutting back. That means UBS can enjoy the benefits of continued buoyancy in the markets without having to throw its cheque book around to hire new staff.
Goldman merges M&A and financing arms 7 Feb 2005 This is going back to the old ways. Financing and banking were separated out during the boom but that's too costly in today's world. It's not just about rationalisation. It's about using M&A to drive the financing business. Goldman 's rivals will be watching closely.
ABN does a Deutsche 7 Feb 2005 To focus investors minds, the Dutch bank is setting itself a return on equity goal mimicking its German rival s share price booster plan. But it s also reiterated its idea to tackle sluggish revenues by making acquisitions. That will be a counteracting pressure on the stock.
Deutsche Bank job cuts to total 6,400 3 Feb 2005 While the move will reduce the costbase by 7%, Deutsche s key 25% ROE target for this year still looks like a challenge. Revenues grew only 3% in 2004, and any aggressive restructuring always comes with risks.
Will foreign banks finally invade Italy? 1 Feb 2005 Investors are betting ABN and BBVA are sufficiently desperate that they might bid for Antonveneta and BNL. But flying in the face of the Bank of Italy looks easier said than done. And without a bid, shares in both banks could fall.
Citi bond trade brings back eerie memories 1 Feb 2005 A memo from just before last year's controversial trade spoke about turning the European market into something more like the US bond market. This has echoes of the 1991 cornering of the US Treasury note market. The guilty party then was Salomon Brothers now part of Citi.
Investment banks beat back universal banks 27 Jan 2005 When credit was scarce three years ago, the likes of Citigroup and JP Morgan grabbed juicy business from Goldman, Morgan Stanley and others. At the time, many thought this was a secular change. But it now looks like a temporary shift driven by the credit cycle.
Spanish government renews assault on BBVA chairman 27 Jan 2005 The Spanish bank has already come under attack from construction company Sacyr, and seen off an investigation by the securities regulator. Now the Spanish attorney general has opened a probe. This politicallyinspired witch hunt does Spain no credit.
Allianz issues pioneering E1.2bn equity derivative 26 Jan 2005 Derivatives are a common way for insurers to cut their equity exposure. But this one will be sold publicly. It's part of a E4bn fundraising, in which Allianz hopes to exploit investors' current appetites rather than dumping shares on the market.
Merrill Lynch pays for excessive cost cuts 25 Jan 2005 The firm's Q4 results illustrate the difficulty of playing catchup. Costs are rising faster than underlying revenues. Rebuilding a business is not easy. But Merrill does not appear to have learned this lesson after its brutal bond market cull of 1998.