CVC’s Darwinian pay policy puts rivals on the spot 26 Apr 2024 The buyout shop, which manages $200 bln, allocates 40% of fund profits to staff on a deal-by-deal basis, rather than pooling the spoils. Rivals say it hurts teamwork, but CVC’s returns suggest it works. If the newly public firm keeps out-raising peers, others may follow suit.
European banks have little to lose from rate cuts 25 Apr 2024 Tighter monetary policy boosted revenue at BNP Paribas, Deutsche and Barclays, who now face ECB and BoE loosening. Markets expect some 50 basis points of rate cuts, but that shouldn’t hurt bank income much. Deposits may get cheaper, while old loans keep rolling onto higher rates.
EU Fannie Mae idea is bad answer to good question 25 Apr 2024 A report led by former French central banker Christian Noyer advocates more securitisation to help fund $1 trln of annual green and digital investments. He’s right that bank balance sheets need unclogging. But subsidising the slicing and dicing of mortgages isn’t worth the risk.
New Hong Kong bourse CEO needs everyone onside 24 Apr 2024 Anaemic trading activity has halved the market operator’s share price, and first-quarter earnings show it can no longer count on investment income to cushion the blow. There are early signs Bonnie Chan may get support from Beijing to turn things around. Hong Kong can do more too.
World economy’s star athlete may run out of puff 23 Apr 2024 The IMF crowned the United States as the champion of global growth at last week's summit. A predicted rise in GDP of 2.7% this year is welcome as Europe and China struggle. But high debt and hard-to-repeat gains in productivity and the workforce will limit American staying power.
China trading-data restrictions are self-defeating 23 Apr 2024 The Shanghai and Shenzhen bourses will cease real-time updates of when overseas investors buy and sell shares. It looks like a ploy to shore up market sentiment. Reversing the decade-long practice, though, will decrease market transparency and undermine shareholder confidence.
Blackstone’s cash pile will buy only so much time 18 Apr 2024 The investment giant is reaching into its $200 bln war chest, but selling less. Higher-for-longer rates also threaten to slow down deals. A protracted mismatch would sharpen the divide between fund backers focused on profit and shareholders benefiting from capital deployment.
Wells Fargo has worn its dunce cap long enough 18 Apr 2024 In 2018, the US bank was banned from growing beyond $2 trln in assets as punishment for its flagrant customer abuses. Even if warranted, the Fed’s decision has led to market distortions. It’s time to scrap the limit, explain why it remains, or – if the rot persists – get tougher.
Gulf bank’s M&A hunt risks shareholder injury 15 Apr 2024 First Abu Dhabi, worth $40 bln, may be eyeing Turkish lenders following a short-lived pursuit of Standard Chartered. An overseas deal would help to diversify away from corporate and investment banking, but the cost savings look slim. Better to focus on growing at home.
MUFG and Indian credit scratch each other’s backs 15 Apr 2024 Taking a $2 bln stake in an Indian shadow lender backed by HDFC would be punchy at five times book value. Still, the South Asian country's non-banks are growing super fast. Japan's financial institutions aren’t waiting around for a payday at home from rising borrowing costs.
Société Générale CEO is pruning a decaying tree 11 Apr 2024 Slawomir Krupa agreed to sell an equipment-financing unit to local French rival BPCE for 1.1 bln euros. It’s a good price, and Krupa is right to clear out peripheral assets that languished under his predecessor. The problem is that the bank’s core isn’t alluring either.
Swiss too-big-to-fail rules are too timid to work 10 Apr 2024 Following the Credit Suisse disaster, Finance Minister Karin Keller-Sutter will give the country’s bank regulator more teeth and raise capital requirements for $100 bln UBS. It all helps. However, there’s no sign authorities will be any more willing to wind down a big bank.
Jamie Dimon sends missive from political Neverland 8 Apr 2024 The JPMorgan boss’s annual letter is a manifesto for the middle. From climate to regulation, diversity to deficits, he argues for keeping the US on top and markets working - but no more. It’s a vision a shareholder should love. But this fairytale centrism is not on the ballot.
Central banks’ noise helps dollar – and Joe Biden 28 Mar 2024 In February, traders’ hopes of rate cuts by the Federal Reserve sent the currency lower. But it has risen 1.8% in March, partly due to policymakers’ mixed messages. Until the fog clears, the greenback will rule forex markets. That curbs US inflation and may benefit the president.
Sergio Ermotti has a path to Wall Street-style pay 28 Mar 2024 UBS handed its CEO $16 mln for nine months’ work last year. That’s more than his European rivals, but less than the bosses of US lenders like Morgan Stanley, whose valuation the $100 bln Swiss bank aspires to. Tweaked terms next year give Ermotti a chance to narrow the gap.
Credit card suit takes swipe at perks programs 27 Mar 2024 A $30 bln settlement in a decades-old lawsuit will compel payment networks Visa and Mastercard to let retailers charge customers more to use certain cards – and to tell them why. As shoppers take notice, they may cool on fancy rewards programs.
Big banks’ shock absorbers are still far too slim 26 Mar 2024 Credit Suisse and a string of US regional banks failed last year. In this Exchange podcast, Stanford Professor Anat Admati argues that lenders’ equity buffers are punier than they seem – and that fixing the problem needn’t cause a credit crunch.
Bank crises proved a mixed blessing for rivals 21 Mar 2024 It’s 12 months since Silicon Valley Bank failed and Credit Suisse collapsed into the arms of UBS. In this Viewsroom podcast, Breakingviews columnists explain how bigger banks gorged on these lenders’ carcasses – and how the system’s underlying weaknesses have not gone away.
US nudges EU banks toward clean break with Russia 20 Mar 2024 Austrian lender Raiffeisen dreamt up a $1.6 bln plan to salvage value from its Moscow-based unit. But Washington dislikes it, Reuters has reported. For European banks, upsetting the US could ultimately be more damaging than the write-offs from a speedy Russian exit.
Credit Suisse carcass feeds many hungry mouths 15 Mar 2024 In the year since it collapsed, competitors have carved up the Swiss bank’s employees and clients. UBS grabbed most of the spoils, but Santander, Deutsche Bank and others have also moved in. Lasting benefits, though, depend on survivors showing restraint when activity picks up.