Financial Services

Investors in Italy sell first, ask questions later

25 May 2018

The radical government is not yet in place, but investors are not giving it the benefit of the doubt. Fears of a clash with the EU that forces Italy out of the euro have hit the value of shares and bonds. Party leaders’ reluctance to provide reassurance adds to market jitters.

Startups bump up against myth of Southeast Asia

25 May 2018

Indonesia’s Go-Jek is moving into four nearby markets. For this, the $5 bln ride-hailing firm will spend heavily on separate brands and apps. The problem for it, Alibaba and others is that this region of 660 mln remains more of a political concept than an economic reality.

Deutsche Bank de-flabbing cuts to the bone

24 May 2018

The German lender plans to cut more than 7,000 jobs by 2019, including a one-quarter reduction in equities trading headcount. It’s a bold move by boss Christian Sewing to get costs to 22 billion euros. It could also end up damaging Deutsche’s more profitable investment banking businesses.

EMI deal calls out to 1MDB bounty hunters

24 May 2018

Sony is taking control of EMI Music Publishing. The sale could mean a $420 mln payout to financier Jho Low. U.S. prosecutors allege he used funds stolen from Malaysian fund 1MDB to make the purchase. That’s a temptingly huge sum for authorities in both countries to pursue.

Canada adds to global muddle with Chinese M&A veto

24 May 2018

Ottawa blocked the $1.2 bln sale of construction company Aecon to a Beijing-backed rival on national security grounds. The controversial decision could confound trade talks between the two countries. Increasingly, mergers are getting mixed up in the wider geopolitical realm.

Rollback of Dodd-Frank won’t roll back time

23 May 2018

The first notable revision to post-crisis U.S. financial regulation is more symbol than substance. Minor tweaks aside, large banks will barely notice. Next in the crosshairs is the Volcker Rule, but even so, market changes mean the good old days aren’t coming back any time soon.

Insurers risk retreading banks’ pre-crisis folly

22 May 2018

Companies such as AXA have a new excuse for bold M&A. Recent European rules, like bank regulations before the 2008 crash, reward insurers who spread bets across markets and geographies. The result may be similar: more complex groups, and less capital to absorb losses.

Bank investors lose the plot over $4.7 bln merger

21 May 2018

Fifth Third is paying a 24 pct premium for fellow U.S. lender MB Financial. The Chicago-based target gets the better deal – it has struggled to grow earnings and lent almost to its limits. But cost cuts and the logic of consolidation make Fifth Third’s share slump look excessive.

Ant Financial quacks like a bank

21 May 2018

The Alibaba-linked outfit is pitching itself as more tech than fin to secure a $150 bln valuation. With over 600 mln users relying on it for payments, wealth management and loans, though, Ant is part of the fabric of Chinese finance. Beijing would be wise to regulate accordingly.

PayPal takes $2.2 bln step into physical payments

18 May 2018

The online pioneer is buying iZettle, which provides mobile card readers to small merchants. The valuation is higher than U.S. rival Square, and twice the Swedish group’s mooted IPO value. For PayPal, though, it’s a worthwhile move to expand its appeal to real-world retailers.

Citi’s Hong Kong slap has lesson for new IPO boom

18 May 2018

The securities watchdog fined the U.S. lender $7 mln over a troubled 2009 flotation. One failing was a lack of oversight from senior staff. As a wave of biotech outfits, many boasting complex and unproven products, prepares to list, banks in the city will have to stay vigilant.

Speed matters for Toshiba’s new CEO

15 May 2018

Nobuaki Kurumatani’s plan for life after memory chips, while vague, suggests a welcome focus on returns. Electronics giants are slow-moving juggernauts, but with hedge funds to keep onside, he needs the $17 bln Japanese group to move faster than rivals like Hitachi have before.

Morgan Stanley has paid off smartly for MUFG

16 May 2018

Propping up the Wall Street stalwart mid-crisis cost Japan’s biggest bank more than $9 bln. Over a decade, MUFG has tripled its money and benefited from a powerful U.S. ally. As so-so annual results show, that’s a welcome offset to the difficulties besetting Japanese banks.

Trump’s signal on ZTE helps make China great again

14 May 2018

He said he'd try to get the telecom giant "back into business, fast" after fresh U.S. punishments over sanctions violations put it on the ropes. It undermines efforts by his trade negotiators to look tough. And it's too late now to stop China from seeking technology independence.

India Insight: Narendra Modi has lost the boardroom

14 May 2018

Executives who once touted him as a three-term prime minister are grumbling and wondering if he can even win a second. Modi still has broad popular support. But the relationship between New Delhi and bollygarchs is one he can’t afford to let sour for too long.

The Exchange: Indonesia’s startup boom

11 May 2018

Southeast Asia's largest economy has seen a flurry of homegrown tech successes, led by $5 billion ride-hailing firm Go-Jek. Willson Cuaca of East Ventures and Donald Wihardja of Convergence Ventures explain why, and how, Jakarta can keep the hits coming.

Trimmer Monte dei Paschi could speed cleanup

11 May 2018

The state-owned Italian bank pleased investors with a return to the black and plans to shed more dodgy loans. At 10 pct of total lending, net dud credits are still too high. If the bank cuts costs to the level of stronger peers, it will have more room to scrub its balance sheet.

Malaysia can push for a healthy China rebalance

11 May 2018

Mahathir Mohamad has accused his predecessor of selling out to Beijing, and vows to review deals. The country's strategic position and historic ties with the People's Republic gives him leverage to reset the relationship. But Malaysia needs China too, so the haggle will stay polite.

Malaysian political shock may hold sting for banks

10 May 2018

Wall Street fingerprints were all over the $4.5 bln 1MDB sovereign fund scandal. Malaysia’s new government, and others overseas, could reopen or step up enquiries – and come after lenders that raised and moved money. That poses renewed risk for Goldman and Deutsche Bank.

U.S. helps make RBS nearly great again

10 May 2018

A $4.9 bln fine for missold mortgages is less than feared and means the lender has 4 bln pounds in surplus capital. The UK’s 71 pct stake means it gains most from renewed dividends and greater chances of a share sale. It’s a small present ahead of President Trump’s July visit.