Financial Services

HBOS audit probe shows limits of bank accounting

19 September 2017

KPMG was right to accept the UK bank as a “going concern” shortly before its near-collapse in 2008, a watchdog has concluded. Pre-crisis audits deserve scrutiny, but accountants cannot replace regulators. Besides, publicly flagging HBOS’ frailty would have accelerated its demise.

Jefferies signals a tighter squeeze on Wall Street

19 September 2017

Sharp rises in underwriting and deal revenue helped the investment bank double profit in the latest quarter. While bond trading was depressed, the firm led by Richard Handler seems to be picking up market share in the advice business. These are bad omens for bigger rivals.

EU aims torpedo at asset managers’ Brexit defence

19 September 2017

Europe’s market regulator may be given new powers to prevent national watchdogs from turning a blind eye to funds that outsource jobs to the UK in the hope of luring business to their shores. London-based funds could face more upheaval than expected after Britain leaves the EU.

What we’ve learned about Brexit so far

19 September 2017

Britain’s divorce from the European Union is reaching the critical stage where talks are meant to shift from principle to detail. Progress is being slowed by bickering, technicalities and economic fog. Despite the risk of Brexit fatigue, five clear lessons stand out.

Review: Dalio writes ultimate baby boomer’s guide

15 September 2017

The Bridgewater founder is true to his generation. He wants you to decide what you want and help you get it. To that end he offers his life and work principles – all 525 of them. It's a bid for immortality, like the algorithm he's designing to run his $160 bln hedge fund.

Lure of scale drives Axa asset management union

15 September 2017

The insurer may seek a partner for its European fund arm, Bloomberg reports. Joining forces with French rival Natixis would create a European giant with assets of more than 1.5 trln euros. The threat to margins from low-cost passive investments makes cost savings unavoidable.

Time isn’t always on Warren Buffett’s side

12 September 2017

Berkshire Hathaway’s bid to buy a fifth more of Home Capital was rejected by the Canadian lender’s shareholders. The setback comes weeks after Texas utility Oncor was snatched out from under Buffett's conglomerate. His opportunism is sometimes exposed on closer inspection.

Equifax boss in danger of getting Stumpfed

12 September 2017

The U.S. credit-scoring agency has now lost a fifth of its market value since revealing a massive hack. A bumbling response leaves CEO Rick Smith on the back foot as lawmakers and consumers demand answers. Under similar circumstances, Wells Fargo's John Stumpf paid with his job.

What’s with Ray Dalio’s Wang Qishan obsession?

12 September 2017

The Bridgewater billionaire says he gets "closer to cracking the unifying code that unlocks the laws of the universe" when he speaks with the anti-corruption czar of China's Communist Party. The odd confession may offer insight into Dalio's ardor for investing in China.

SoFi is the Uber of finance in more ways than one

12 September 2017

The founder of the private online lender is resigning amid a harassment lawsuit and claims he fomented an inappropriate work vibe. As with Uber, the danger is that Mike Cagney, who will remain CEO until a replacement is found, will still cast too long a shadow on his creation.

Goldman’s trading overhaul needs more substance

12 September 2017

Lend more to companies and get more trading clients: that’s how the Wall Street firm hopes to plug gaps in the bonds, forex and commodities unit that caused recent earnings blushes. But such drawbacks have been clear for a while. Goldman’s belated fix is pretty underwhelming.

U.S. banks suffer summer squalls of their own

11 September 2017

A less destructive Hurricane Irma than expected should be a relief for lenders from Citi to SunTrust. Interest rates and trading revenue are falling, though, as global tensions and credit costs rise. Dimming hopes for major policy change also keep the industry forecast cloudy.

Goldman’s biggest asset in UK banking is lateness

11 September 2017

The investment bank will start taking British deposits under the Marcus brand next summer. A startup with Wall Street infrastructure is an appealing mix. Sure, it’s a sign Goldman’s main business is looking limp – but baggage-laden UK lenders should not be too dismissive.

Italy’s latest bank bailout is gentle on taxpayers

11 September 2017

The country’s deposit fund is forking out 640 mln euros to clean up three small banks before they are sold to Credit Agricole. Prepping a target for a foreign rival looks generous and the fund’s returns are uncertain. At least taxpayers will be spared a hit this time.

Equifax hack provides an Exxon Valdez moment

8 September 2017

Sensitive personal data of 143 mln consumers may have been compromised at one of the big U.S. credit-grading agencies that double as gatekeepers. Just as the oil shipwreck spurred anti-pollution policy, Equifax could be the best catalyst yet to rethink corporate cyber security.

Irma alone can’t wash away reinsurance excess

7 September 2017

Take a plentitude of capital and a paucity of disasters. Mix in a Florida building boom and massive hurricane, and the result looks like a giant hit to reinsurers. But the history of catastrophes suggests underwriting won’t become much more rational when the storm clears.

Deutsche Bank CEO tells truth to robotic employees

7 September 2017

John Cryan wants the German bank to embrace a “revolutionary spirit” as people lose their jobs to artificial-intelligence technology. His comments reflect the competitive reality – but Deutsche’s whopping 86 pct cost-to-revenue ratio makes its staff among the most vulnerable.

Nordea shows governments who rules the roost

6 September 2017

The Swedish bank is moving to Finland. The move will save $1.3 bln and lower capital charges, but the real winner is Europe’s regulator, which was the main draw. It’s a tangible demonstration that banks and investors want common rules, and a warning to governments that go it alone.

Nasdaq signals information is the real market

5 September 2017

The tech-heavy exchange is paying $705 mln for eVestment, a data provider to asset owners and managers. It’s pricey at over 16 times adjusted EBITDA. But CEO Adena Friedman sees more value in information that brings buyers and sellers together than in acting as a trade conduit.

Vanguard slowly flexes corporate-governance muscle

1 September 2017

Index funds can’t choose to sell stocks. But the $4.5 trln fund giant is engaging more with companies and in the past year voted against management at Exxon Mobil, Viacom and Wells Fargo on climate change, pay and the like. It’s hardly activism but it beats pure passive investing.