UBS sets high-water mark for 2020 bank earnings 9 Apr 2020 Outgoing CEO Sergio Ermotti unveiled a one-third jump in first-quarter profit. Market volatility has boosted trading income, while wealth clients shifted more money around. Yet both are temporary. With more pain to come, it makes sense to bow to regulators by trimming dividends.
Investors can live without U.S. bank dividends 7 Apr 2020 Only a months-long severe crisis would make JPMorgan consider cutting quarterly payouts. It’s similar for many U.S. lenders, which are well padded and don’t pay big dividends. Yet that makes turning off the tap a fairly painless way to wean investors off an illogical fixation.
Jamie Dimon sets virus playbook benchmark 6 Apr 2020 Covid-19 has prompted JPMorgan’s boss to pen his most useful letter to shareholders in 14 years atop the $275 bln bank. He is talking his book, especially on regulation, but Dimon has laid out what customers, investors, employees, and even voters, have a right to expect.
Viewsroom: Lingering lockdowns 2 Apr 2020 Breakingviews journalists around the globe check in with Editor Rob Cox to discuss Silicon Valley’s response to the coronavirus, how European regulators are forcing banks to hoard dividends, and one of the biggest corporate rescues yet of the crisis: Singapore Airlines.
Big Oil might be a weird stock market haven 2 Apr 2020 Shares in the world’s big five listed crude producers are down by over a third since January. Yet despite the global oil slump, their dividends look secure for now. Rock-bottom prices would have to last well into 2021 for credit ratings or payouts to be in serious doubt.
Insurers are next in line for virus dividend chop 2 Apr 2020 Regulators told the likes of Allianz and Aviva to think twice about giving cash to shareholders. Most payouts look safe even after steep market falls. Yet bond downgrades loom, and pressure to help the economy will sap profitability. Unlike banks, cuts may not fall evenly.
Corona Capital: Rich vs. poor, Carnival 31 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: The rich may save even more while the coronavirus rages while the poor will be further squeezed, and Carnival tries to bail out its sinking cruise business with a big sale of equity and debt.
Global dividend drought could rival 2009 30 Mar 2020 Companies like Ford, H&M and UniCredit have cancelled payouts. Government curbs and the need to conserve cash mean more will follow. Distributions had more than doubled since the last crisis-induced drop. Pension funds and other income investors will feel the lack of cash flow.
EU bank dividend pause could add $300 bln to loans 30 Mar 2020 Lenders like UniCredit and ING will follow regulators’ advice and halt payouts. That could add $30 bln to euro zone bank capital, supporting 10 times that sum in lending to virus-hit firms. Those who stick with their dividends, like UBS, will regret it if the crisis persists.
Scrap bank dividends to help save the world 24 Mar 2020 Spain’s $39 bln Santander may pause 2020 payouts, freeing up capital to support lending amid the pandemic. A more radical move would be for banks to all cut 2019 dividends. Investors need cash less than virus-hit firms, and U.S. and European share prices already factor in a hit.
Corona Capital: Religious aid, Ad-spending slump 23 Mar 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. Vice President Mike Pence wants Americans to donate to religious institutions to bolster community aid. But churches have their own fiscal problems. Plus: TV ad revenue look set for a pounding.
Occidental divi cut puts Buffett in driver’s seat 10 Mar 2020 The oil driller slashed its payout in response to crude prices plummeting. That is the last straw for CEO Vicki Hollub, who staked her credibility on a debt-fuelled purchase of Anadarko. Oxy now looks like an appealing M&A morsel, though all hangs on kingmaker Warren Buffett.
Virus only strengthens Peugeot merger logic 26 Feb 2020 The $17 bln French automaker warned of lower sales growth and margins. The effect of the coronavirus will be a further blow. Still, combining with Fiat Chrysler should lead to a more profitable and resilient group. Investors aren’t giving boss Carlos Tavares enough credit for it.
Daimler’s dividend reverse may be just the start 11 Feb 2020 The Mercedes maker slashed its payout by 2.5 bln euros after 2019 earnings fell by nearly two-thirds. It’s a painful but necessary step to conserve cash while investing in electric vehicles. If projections of stable sales prove too rosy, CEO Ola Kaellenius may need to cut deeper.
Intesa will cope with weak economy test 4 Feb 2020 The $45 bln Italian bank reported healthy net profit for the fourth quarter. Its rich valuation means investors already reward CEO Carlo Messina’s focus on fees and big dividends. At least proceeds from a big sale provide a buffer against economic fragility in its home market.
Boeing needs MAX insurance more than a dividend 22 Jan 2020 The $175 bln aircraft giant’s new CEO, David Calhoun, says he won’t cut its $4.6 bln a year dividend. Yet Boeing will burn cash as long as the 737 MAX remains grounded. Borrowing more can paper over problems, but cutting the payout would be prudent in case of further delays.
Sinking Thyssenkrupp needs more than a quick lift 21 Nov 2019 The German group’s shares fell after it cut its dividend. Selling its elevator unit will raise cash but leave a loss-making rump. With restructuring, the steel-to-ships maker could be worth much more than the current 7.5 bln euros, but boss Martina Merz faces an arduous climb.
New Molson Coors boss mounts Big Beer’s laggard 26 Sep 2019 The $12 bln brewer’s valuation trails industry peers. A renewed emphasis on marketing might make the difference but could mean less cash for controlling family shareholders. Incoming CEO Gavin Hattersley’s prior record, though, may leave a thirst for higher returns unquenched.
Centrica’s CEO exit is only partially deserved 30 Jul 2019 Under-fire boss Iain Conn will leave the UK utility next year. Had he quit oil and gas production sooner, Centrica shares might not have dived 70% during his tenure. But preparing an ageing utility for the energy transition while battling state price caps was a thankless task.
Gazprom payout pledge yet to catch fire 31 May 2019 After a management shake-up, the $78 bln gas company says it will pay out half its net income in dividends in coming years. That would please the state, which has been pushing the issue. But the implied dividend yield of 15% suggests investors doubt the bonanza will happen.