Financial Services

Blackstone’s conversion is less than it seems

18 April 2019

Turning into a corporation should broaden the buyout shop’s investor base and win inclusion in indexes. Yet a similar move hasn’t done much for rival KKR, and power stays in hands of boss Steve Schwarzman and insiders. They, not passive investors, will decide Blackstone’s value.

Veteran Indian bank CEO pushes the limit

18 April 2019

Aditya Puri has been at the helm of the high-performing $90 bln HDFC Bank over two decades. He’s now nearing retirement age. Stunning returns favour a mooted rule change allowing him, and others, to stay on, but blowups elsewhere suggest timely succession may be better.

Morgan Stanley takes lemons, makes weak lemonade

17 April 2019

James Gorman’s bank took a hit from weak equities trading, as did rivals. Its advisory business fared worse than theirs, and fixed-income trading did only a little better. What helped was decent wealth-management profit, cost cuts, and comparison with the preceding poor quarter.

German banking tie-up brings out balloon-floaters

17 April 2019

ING may have taken a sniff at Commerzbank, in talks to merge with Deutsche. Shareholders won’t relish a healthy Dutch bank chaining itself to an ailing German one. But it’s a chance for Commerz to appear in demand, and for ING to troll local politicians about rigid bank rules.

Short hit pollutes China’s second-hand car lot

17 April 2019

Uxin’s stock lost a third of its value after a research firm accused the newly U.S.-listed auto outfit of fudging numbers. True or not, fumes around an industry backed by Tencent and big buyout names are becoming noxious. It’s reason to steer clear of rivals waiting to go public.

BofA boss’s next challenge is to ditch mediocrity

16 April 2019

It has taken Brian Moynihan almost a decade to shake off the $280 bln mega-bank’s crisis hangover. He has turned BofA into one of the country’s most efficient banks. While it’s now solidly profitable, though, matching JPMorgan’s bumper returns is a whole other level of difficulty.

UniCredit outperforms U.S. sanctions-hit benchmark

16 April 2019

Italy’s biggest bank by assets is paying $1.3 bln to settle a U.S. probe, and its German arm will enter a guilty plea. That’s a similar slap to previous European bank settlements. But with the fine less than UniCredit provisioned for, it will actually boost the bank’s capital.

Small is beautiful for BlackRock in China

16 April 2019

Foreigners can finally control mainland asset managers, but few are likely to sell given the $3.7 trln market’s promise. CICC could be an exception. Its fund arm is tiny, but it has licences that Larry Fink’s firm prizes. If BlackRock buys the outfit, similar deals should follow.

Goldman Sachs supertanker starts to turn

15 April 2019

The Wall Street firm’s revenue shrank in the first quarter, but its shift from investment banking is gaining speed. Goldman gets $6 of every $10 in revenue from stable business lines, including interest. Boss David Solomon has more to trim, but what’s underneath is encouraging.

Italian bank tie-ups offer exit from profit torpor

15 April 2019

Merging bailed-out Monte dei Paschi with local peers UBI or BPM could boost combined net profit by up to 50 pct. Suitors fear state meddling, a multibillion-euro cash call and legal risks. But scaling up is the only way to address chronic underperformance in a stagnant economy.

Wells Fargo earnings make for a neat job ad

12 April 2019

The $217 bln U.S. bank’s first-quarter showing looks fairly limp next to JPMorgan’s. Yet Wells Fargo, under Fed orders not to grow its balance sheet, isn’t doing too badly with what it has. Whoever replaces departing CEO Tim Sloan has a clear path to bring returns up to a shine.

Santander’s $2.9 bln Mexico bid is easy to refuse

12 April 2019

The Spanish lender wants to swap the 25 pct of its Latin American unit it does not own for shares in the group. Despite a 14 pct premium, the offer is a lower multiple of book value than when Santander listed it in 2012. Given robust profitability, Mexican investors can hold out.

UK subprime M&A party closed to gatecrashers

12 April 2019

Provident Financial shares are trading more than 10 pct above smaller rival Non-Standard Finance’s 1.2 bln pound offer. One theory is that investors are hoping for a higher bid. But given over 50 pct have already accepted the offer, a white knight has probably left it too late.

Viewsroom: Wells Fargo searches for a leader

11 April 2019

The U.S. bank may be tempted to recruit from splashy peers like Goldman Sachs. But there are better reasons to poach from smaller firms. Meanwhile, the $170 bln Chinese liquor maker Kweichow Moutai is worth more than Diageo. Breakingviews columnists discuss the firewater’s draw.

Deutsche Boerse FX deal stretches financial limits

11 April 2019

The German stock exchange operator has confirmed negotiations to buy foreign exchange businesses from Refinitiv. CEO Theodor Weimer could afford to spend around 1.5 billion euros and stay within his debt target. A bigger outlay could mean shareholders stumping up.

Franco-Italian nexus gets its own bankers

11 April 2019

Mediobanca is buying Paris M&A boutique Messier Maris in another high-profile cross-Alps deal. Despite close cultural ties, board rows at EssilorLuxottica and Telecom Italia show getting along is hard. Therapists may be as useful as bankers in bringing Italy and France together.

Bank bosses find only modest safety in numbers

10 April 2019

Seven top Wall Street executives faced a congressional grilling armed with strong balance sheets but only bland answers. Wells Fargo’s Tim Sloan quit after he appeared alone. His peers had company. But that highlighted some issues, like pay distortions, as an industry problem.

Payments duo hush European IPO bankers’ lament

10 April 2019

Nexi and Network International are selling shares worth $4 bln amid a dearth of new issues in 2019. The Italian and Middle Eastern groups have reliable revenues and high margins, drawing interest even from edgy investors. Network’s superior growth rate merits a higher multiple.

Wells Fargo CEO is a B-lister’s job of a lifetime

9 April 2019

Whoever replaces Tim Sloan atop the $222 bln U.S. lender needs three qualities: banking experience, an ability to deflect political brickbats and patience for financial rewards. Those chasing status needn’t apply – which rules out most of Wall Street’s leaders-in-waiting.

SocGen trading cuts are just a start

9 April 2019

The bank run by Frederic Oudea is streamlining its investment bank and axing 1,600 jobs. Shutting down commodities and proprietary trading is overdue for a unit that earned a 6 pct return on equity last year. The bank’s slim capital buffer may rule out a deeper restructuring.