Financial Services

Barclays adds risky spice to insipid valuation

24 Jun 2022

The UK bank is scooping up specialist lender Kensington for nearly $3 bln. It’s small, and CEO C. S. Venkatakrishnan is right to try to gee up his low-valued shares with retail assets. Still, he’s also bulking up in the riskier end of the market amid a potential house price dip.

Capital Calls: Hydrogen IPO, Call centre M&A

20 Jun 2022

Concise views on global finance: Despite Thyssenkrupp postponing its clean energy listing, De Nora is still pressing on with its own one at a lower 3 bln euro valuation; customer-service group Sitel agrees to buy 2.6 bln euro rival Majorel in a cash-and-stock deal.

Western bankers’ long wait for Gulf gold pays off

20 Jun 2022

Not long ago, U.S. and European lenders’ Middle East jobs meant low-paid work and no play. Now, oil-funded deal flow in Riyadh and Dubai is robust even as it falls elsewhere. That’s a boon for the likes of JPMorgan and Citi, who stuck it out and are now boosting their teams.

Wirecard exposed finance’s scary credulity

17 Jun 2022

The payments group collapsed in 2020 after admitting $2 bln of its cash was fake. “Money Men”, a book by the FT journalist who uncovered the scandal, describes a chaotic and unsophisticated fraud. All the more shocking that analysts, advisers, auditors and regulators were fooled.

Santander picks anti-Orcel as new CEO

17 Jun 2022

After bungling the hiring of the former UBS banker in 2019, Executive Chair Ana Botín and the board have picked a safe choice in Héctor Grisi. The insider won’t require a hefty payout and has experience running a retail bank. He’ll need it given Santander’s lowly share price.

Italian banks face return of sovereign embrace

14 Jun 2022

A decade ago, soaring government bond yields threatened to drag down domestic lenders. Today, banks have shrunk state debt to less than 7% of total assets, while cutting dud loans and building capital buffers. As the ECB retreats, the pressure to load up again will increase.

Apple pay-later foray blurs tech-finance boundary

9 Jun 2022

The $2.4 trln iPhone maker will use its balance sheet and data on user spending to offer short-term instalment loans. Fear of regulation and humdrum returns have largely kept big U.S. tech firms out of the lending business. Banks will be watching with interest – and trepidation.

Capital Calls: Fertilizer woes plant seed of doubt

8 Jun 2022

Concise views on global finance: Scotts Miracle-Gro’s profit warning nods to wide effect of commodities price surge.

LME’s best hope is to pay up, then shape up

7 Jun 2022

Elliott Management is suing the London Metal Exchange for voided nickel trades. If it wins its judicial review, the LME could take a flood of further legal blows. Its Hong Kong owner’s best defence may be to pre-emptively compensate angry traders, whilst rebooting governance.

DWS CEO exit is helpful deterrent for greenwashing

1 Jun 2022

Asoka Woehrmann resigned from the $7 bln asset manager as regulators probe allegations it exaggerated its sustainable investing skills. Fund groups have benefitted from booming demand for ESG investments. The fallout at DWS gives other bosses an incentive to tone down the hype.

Credit Suisse capital hike would speed turnaround

31 May 2022

The bank is considering raising $1 bln of equity, Reuters reported. That would be painful at such a low valuation, and the company denied it. But bigger balance-sheet buffers could fund faster shrinkage of the accident-prone investment bank, reducing its share-price drag sooner.

Angola bank IPO ends very long march to capitalism

30 May 2022

Eight years after its birth, the African oil producer’s stock market is finally getting its first listing. Given the delay, floating 10% of lender BAI is a coup for President Lourenço’s reform drive. At under $1 bln, the valuation is low enough to ensure it completes the trip.

Financiers may pave U.S. campaign trail with gold

27 May 2022

With ex-Bridgewater boss David McCormick questing for a Senate seat, more Wall Streeters could try their hand at politics. Wealth built in bull-market times can give even novices a lift. And from Ken Griffin to Jamie Dimon, there’s no shortage of finance bosses with strong views.

HSBC’s jarring ESG message, Davos in spring

26 May 2022

The bank’s head of responsible investing believes policymakers are exaggerating the financial risks of climate change. In this Viewsroom podcast, Breakingviews columnists discuss the ramifications of those remarks. Plus: The World Economic Forum is back, but the mood is dour.

Alibaba’s overseas growth push faces European test

25 May 2022

The $223 bln Chinese e-commerce giant hopes to offset sluggish growth at home by expanding in the region via its Southeast Asian offshoot, Lazada. But with a European market share of less than 5%, and entrenched rivals like Amazon, Alibaba may struggle to justify the investment.

BoE pours cold water on bank global-warming panic

24 May 2022

The watchdog’s stress test showed UK lenders can weather a chaotic climate switch without a capital hit. For bank CEOs copping flak for funding polluters, it’s a let-off. The other lesson is that governments will get little help from financial regulators in greening the economy.

How to stop margin calls from blowing up markets

23 May 2022

After 2008, regulators pushed derivative trades away from banks and onto clearing houses with the power to request collateral. That cut the risk of blowups, but liquidity is still scarce during panics. The fix is to boost margin during good times, reducing the need for big calls.

HSBC’s green loose cannon misfires at a bad time

23 May 2022

The $123 bln bank has distanced itself from a senior executive who said investors needn’t fear climate risk. His message jars. The energy crisis gives lenders cover to go slow on restrictive net-zero goals, but stakeholders may demur if they fear this is what they really think.

Review: War on digital payment fails to hit target

20 May 2022

Brett Scott’s “Cloudmoney” seeks to remind the world of the value of physical cash. It’s true that an overly automated system of money carries risks like the potential for surveillance. But the campaigner underestimates consumer demand for digital transactions.

Capital Calls: Stablecoin’s safety measures

19 May 2022

Concise views on global finance: As crypto assets wobble, Tether, with $75 bln worth of digital tokens in circulation pegged to the U.S. dollar, is boosting its reserves of cash and U.S. Treasury bills while shrinking its commercial paper holdings.