If only banks were more like chemical factories 1 Mar 2024 New York Community Bancorp and paint-materials maker Chemours both ousted their CEOs after discovering flawed internal controls. Economic importance and heavy regulation distinguish the two $3 bln companies. One crisis mostly affects shareholders; the other should worry everyone.
Meta enters the dividend multiverse of madness 8 Feb 2024 The first payout from Facebook’s owner is a small $5 bln sign of financial restraint. Benefits from regularly returning cash to shareholders, however, are about as tangible as the metaverse. Zeal for dividends simply perpetuates inefficiency and irrationality in markets.
Signature Bank’s savior finds bigger isn’t better 31 Jan 2024 Less than a year after buying the innards of a failed lender, New York Community Bancorp is slashing its dividend and conserving cash to match its enhanced heft. Giants like JPMorgan face less risk of indigestion. The moral: don’t get a small bank to do a big bank’s job.
GM’s big buyback is welcome dose of realism 29 Nov 2023 The Detroit carmaker is falling further behind electric supremo Tesla, its robo-taxis are on ice, and wages are up. Its response: buy back $10 bln of stock. Returning money to investors suggests CEO Mary Barra thinks they can spend it better than she. They would probably agree.
HSBC invites shy investors to turnaround party 1 Aug 2023 Boss Noel Quinn is upping targets at the $160 bln bank after first-half pre-tax profit more than doubled. It’s good timing: pushy shareholder Ping An and its breakup hopes may have been effectively silenced, but other owners need convincing that Quinn’s overhaul has legs.
Shell makes risky pitch for the middle ground 14 Jun 2023 The $195 bln group’s new CEO Wael Sawan boosted shareholder payouts and refrained from new oil output cuts. His bet is that Shell can echo US peers by lingering in oil, while placing its green bets on less tricky low-carbon areas than European rivals. It’s not certain to work.
Capital Calls: Amazon, Aramco 9 May 2023 Concise views on global finance: Rising costs and cautious consumers are driving the e-commerce giant to sell goods through mobile games and push incentives; the $2 trillion Saudi oil company’s new dividend policy is one way to interest investors in future share sales.
Guest view: Why bank investors have it the hardest 21 Apr 2023 Lenders were supposed to be boring after 2008. Recent collapses exposed that vision as a fantasy. Shareholders grapple with high leverage, opacity, erratic regulators and intangibles like trust. Seemingly low valuations may not be low enough, argues former analyst Rupak Ghose.
UniCredit’s share-price surge has further to run 31 Jan 2023 Boss Andrea Orcel wants to hand more than 5 bln euros to investors through dividends and buybacks, after reporting stellar 2022 earnings. Further Russia writedowns are a risk, but the bank’s bottom line looks solid. A valuation of just over half tangible book value looks too low.
Capital Calls: U.S. labor market softens, slowly 8 Dec 2022 Concise views on global finance: Joblessness data suggests Americans are taking longer to find work. That’s good for inflation, but sluggish progress means the Fed will have to keep tightening monetary policy.
Capital Calls: DWS fixes what it can 7 Dec 2022 Concise views on global finance: The 6 bln euro German asset manager unveiled some punchy new targets, but its biggest challenge will be to unshackle itself from controlling shareholder Deutsche Bank.
ECB’s bank loan-loss worries look overdone 7 Dec 2022 Chief supervisor Andrea Enria fears that BNP, ING and others are flying blind into a 2023 default storm. But rate hikes will give the 10 largest lenders a 120 bln euro profit buffer before their capital gets hit. The big banks can afford to keep going with dividends and buybacks.
Total’s Russia foot-dragging is investor problem 18 Oct 2022 The French energy giant owns a stake in gas group Novatek, and is in theory entitled to a $430 mln dividend. CEO Patrick Pouyanné won’t say whether he’s selling. He may hope that long-held Kremlin ties can secure a clean exit, but the uncertainty is a shareholder concern.
HSBC’s cross-border ties are paying dividends 1 Aug 2022 CEO Noel Quinn promised a 12% return on tangible equity and higher payouts to shareholders as the global bank rebuffed Ping An’s breakup call. Higher U.S. interest rates help, but if the Chinese insurer has spurred the $125 bln bank to raise its game, all investors will benefit.
Capital Calls: Spotify hums along 27 Jul 2022 Concise views on global finance: The music service led by Daniel Ek added more subscribers and revenue in the quarter outperforming Netflix and Twitter.
UAE’s $20 bln chemical IPO is pricey for a reason 26 May 2022 ADNOC and Borealis’ joint venture Borouge is to be Abu Dhabi’s largest listing. The company is priced at a premium to rivals like BASF and SABIC, at a time when higher shipping costs are starting to bite. Yet the group’s cash and dividend profile support a princely valuation.
Dubai’s $34 bln utility float tees up IPO drive 25 Mar 2022 State-owned DEWA will be the emirate’s largest listing since 2007. Its pricing muscle and generous dividend are drawcards, as is the cheap valuation. That reflects the political desire for the debut to set the stage for follow-up IPOs, and puts rival regional bourses on notice.
Generali CEO’s bold plan may just save his neck 15 Dec 2021 Philippe Donnet is pledging to grow earnings per share by up to 8% through 2024, ahead of Allianz, and to return capital. It won’t soothe rebel shareholders including Leonardo Del Vecchio, who want him out. But it ups the chance other investors will stick with the status quo.
Viewsroom: European bank M&A, De-Dutching Shell 18 Nov 2021 Big lenders in the euro zone are doing deals, but not the kind investment bankers dream about. BNP Paribas is in U.S. retreat, BBVA bulks up in Turkey and KBC goes Bulgarian. Liam Proud explains. George Hay explains why the Anglo-Dutch oil major is dropping the Dutch bit.
Aviva’s next challenge is to show it can grow 12 Aug 2021 CEO Amanda Blanc is returning 4 bln pounds to investors in the British insurer after flogging assets worth more than 7 bln pounds. The knottier problem is to extract more earnings – and dividends – from a smaller, simpler business. Reduced debt leaves some room for acquisitions.