Financial Services

Credit Suisse’s Archegos albatross is hard to dump

29 July 2021

A clampdown on risk after the lender lost $5.5 billion on Bill Hwang’s fund contributed to outflows of client assets and lower investment-bank revenue. And a review of the sorry saga found deep cultural failings. That complicates Chair António Horta-Osório’s efforts to move on.

Capital Calls: U.S. GDP

29 July 2021

Concise views on global finance: Supply chain woes are tripping up solid U.S. economic growth. GDP grew 6.5% in the second quarter, a big miss from estimates of 8.5%.

Robinhood at $32 bln more option than meme-stock

29 July 2021

The digital brokerage’s IPO values its 21.3 mln customers at about $1,500 each, below one-tenth of peer Interactive Brokers. Robinhood users have less in their accounts, but demographics are on their side. For investors unfazed by its quirks, Robinhood’s beachhead has real value.

Evercore’s pay has the sweet kind of inflation

28 July 2021

The biggest impediment to the M&A trade now is not a lack of deals but a shortage of bankers to execute them. That’s why pay is surging. The $6 bln boutique is threading the needle with comp jumping less than revenue. But keeping talent, even at Evercore’s top, won’t be easy.

Cost control gives Barclays edge over Deutsche

28 July 2021

Robust capital markets helped boost both lenders’ earnings in the first half. But the German bank run by Christian Sewing likely needs top-line growth to hit its 2022 profit goal. Rival Jes Staley’s tighter efficiency means the UK group is less reliant on unreliable revenue.

Capital Calls: Bank mergers, GlaxoSmithKline

28 July 2021

Concise views on global finance: U.S. lender Citizens helps make the case for consolidation with its $3.5 billion acquisition of New Jersey-based Investors Bancorp. A pandemic drug bounty may help the UK pharma group’s CEO Emma Walmsley see off activist Elliott.

Slimdown can help Worldline get fit for M&A battle

27 July 2021

The $26 bln Paris-listed payments group may sell a unit that makes handheld kit for card transactions. A sale could boost its shares and raise $5 bln to replenish CEO Gilles Grapinet’s war chest. That would help him hoover up smaller players and fend off rivals like Italy’s Nexi.

Capital Calls: Duolingo IPO valuation

26 July 2021

Concise views on global finance: The language learning app has increased its price by almost 20%.

European payments jewels are wasted in bank vaults

23 July 2021

BNP, SocGen, Santander and others process billions of card transactions but the potentially valuable units get no credit within stodgy banks. CEOs may resist spinoffs for fear of missing future growth. Yet sitting on a subscale business means losing ground to digital upstarts.

Capital Calls: Covid fibs, M&A flop, Hard seltzer

23 July 2021

Concise views on global finance: Forcing social media to take down vaccine misinformation is a good step on U.S. content rules. Meanwhile, a German real estate deal fails to get enough shareholder votes, and Boston Beer’s hard seltzer sales fizzle.

Capital Calls: Twitter, Domino’s Pizza

22 July 2021

Concise views on global finance: Jack Dorsey’s social network reported a 74% bump in revenue despite a slowdown in adding new users; meanwhile, Domino’s Pizza shows one thing that hasn’t abated in 2021 is customers’ love of takeout pies.

China’s nimbler Robinhoods have arrows in reserve

22 July 2021

E-brokerage firms Futu and Up Fintech shed a combined $3.4 bln in market value after Beijing's tech crackdown. Growth may slow, but diverse business models spanning wealth management, IPO underwriting and managing employee stock schemes set them apart from the U.S. firm.

Jamie Dimon’s $50 mln award is sane in a mad world

21 July 2021

That’s the rough value of stock options the JPMorgan CEO will receive for sticking around for a “significant” time. It’s better structured than some packages handed out by big U.S. firms. But it’s not clear he needs the inducement, and the it’s-all-relative argument rings hollow.

EU dirty money watchdog sounds less toothless

21 July 2021

Brussels wants to set up a single agency to prevent future Danske Bank-style scandals. The new body will take time to set up and could be watered down by politicians. But direct oversight of the EU’s riskiest financial entities and scope to levy big fines are a step forward.

UBS’s Ralph Hamers is a CEO in search of a problem

20 July 2021

The $50 bln Swiss bank is one of the few in Europe trading at book value and earning its keep. The Dutch boss could cut more expenses, but it won’t get him anywhere near U.S. rivals’ profitability levels. The path of least resistance is to change little and talk a lot about ESG.

India’s Paytm is smaller, sturdier version of Ant

20 July 2021

The fintech posterchild with 333 mln customers is delivering decent growth as it slashes marketing costs. Unlike its Chinese backer, Paytm is well set to expand rapidly in financial services without a rude regulatory shock. Still, a mooted $25 bln IPO price tag looks rich.

Reckoning looms for Chinese developers’ loan dodge

20 July 2021

Forced to cut interest-bearing debt, Chinese real estate companies like Evergrande borrowed $556 bln from their suppliers last year. Now they are struggling to repay, prompting a crackdown. Offloading land assets could raise cash quickly, but developers have cause to resist.

Capital Calls: Intel, SPAC lobby

16 July 2021

Concise views on global finance: Buying GlobalFoundries would boost Intel’s ambitions to make chips for other firms, but spinning it off afterward might please investors more; a new D.C. group sets up shop to defend the blank-check craze.

Viewsroom: Finance’s first-rate second quarter

15 July 2021

Earnings of Wall Street’s largest banks confirmed that animal spirits among corporate chiefs and global investors are running high, while pandemic-shy consumers are getting their mojo back. John Foley walks Rob Cox through JPMorgan, Goldman, BofA, Wells Fargo and Citi results.

Morgan Stanley has its fingers in the best pies

15 July 2021

The Wall Street firm’s investment bank, like peers, did well in the second quarter. CEO James Gorman made less money than Goldman from M&A and trading but twin bets on wealth and investment look more durable. That explains the growing premium his company commands over its rival.