Review: Big Bang broke City cartels and morals 9 Sep 2016 Share-trading reforms launched 30 years ago helped dysfunctional and parochial London become a dynamic metropolis, argues Iain Martin. "Crash, Bang, Wallop" also shows how the changes eroded loyalty, stoked greed and pushed banks to grow too big. The effects are still being felt.
MPS rescue needs more than a fresh face 9 Sep 2016 The Italian bank's chief Fabrizio Viola is resigning ahead of a 5 bln euro recapitalisation. A new head may be better placed to lead what will be MPS's third rights issue. There's another daunting task: devise a credible business plan, and carry off a tricky debt swap.
Freak euro bonds show ECB’s power – and its limits 8 Sep 2016 The central bank’s negative rates and bond-buying have forced down borrowing costs: German bearing maker Schaeffler is paying around 3 pct on risky notes that roll up interest payments. Yet smooth credit markets have not boosted investment. Europe’s governments need to step up.
Banks ask for Brexit clarity they can’t have 8 Sep 2016 Big financial groups want Britain’s chancellor to say what kind of settlement he wants after an EU exit. That’s understandable: they want to make plans. But it wouldn’t be smart for Philip Hammond to be too specific ahead of what will essentially be a poker game with EU peers.
Credit Suisse exit prolongs internal upheaval 7 Sep 2016 The Swiss bank has ditched trading head Tim O'Hara six months after boss Tidjane Thiam declared total confidence in him. His replacement oversaw big losses as head of Credit Suisse's securitised business. A plus may be that the struggling markets unit could now be pruned further.
Past returns don’t justify a wrong Birla merger 6 Sep 2016 Kumar Mangalam Birla's history of delivering strong returns is no reason to let pass a $9 bln merger of two holding companies. The deal gives the Indian tycoon more control of a hot finance arm at the expense of minority shareholders. On its own terms, the deal doesn't stack up.
Barclays’ JPMorgan-isation has limits 5 Sep 2016 The UK lender has named the U.S. group’s equities head Tim Throsby as its new investment bank chief. With six of Barclays' 10 top execs JPMorgan alumni, CEO Jes Staley looks to be cloning his old bank. But Barclays' lesser scale - and various headaches - is a check on imitation.
May’s migrant musings a cautious positive for City 5 Sep 2016 The UK prime minister has cast doubt on the efficacy of a so-called points-based immigration system post-Brexit. That sounds good for UK financial firms hit by restrictions on non-EU workers. The catch is Theresa May has little choice but to get net migration down somehow.
Deutsche capital fix lies in asset management sale 2 Sep 2016 Germany's biggest bank has considered selling its funds business. The upside for Deutsche Bank is a one-off capital boost; the downside a potential ratings downgrade and loss of steady earnings that offset investment bank volatility. But selling part of it could still make sense.
China banks’ shadow addiction needs harsher remedy 2 Sep 2016 Recent curbs on lucrative shadow lending haven't done the job. Shadow loan portfolios at some smaller banks nearly doubled in the first half of this year. The $2 trillion business poses a growing threat to financial stability. Stronger medicine is needed.
Deal math stumps rocket scientist Elon Musk 1 Sep 2016 Lazard spotted a $400 mln error in a SolarCity valuation used for its $2.6 bln sale to Tesla. The Musk-orchestrated deal already is fraught with controversy over governance, finances and industrial logic. If anyone should know how important basics are, it's an acclaimed engineer.
Nets IPO offers defensive front in payments war 1 Sep 2016 The Nordic payments firm is listing after just two years of private equity ownership. Valued alongside card network and processing peers, its equity could be worth $5 bln. New rules on digital banking may explain the timing, but Nets is less at risk than more niche players.
Stars are aligning for German bank merger fest 31 Aug 2016 Commerz and Deutsche Bank held talks earlier this month on a possible tie-up. These may have come to nought, but low rates and a bleak outlook make consolidation an increasingly good idea. The two biggest players may prefer other tie-ups, though.
Warsaw charm offensive shows London’s strengths 30 Aug 2016 Poland hopes to woo investment banks from the UK to its capital city. Credit Suisse, Goldman and BNP Paribas each have 300 or more staff in-country. But most are IT support, not revenue creators. The point is that financial hubs are built on far more than low costs.
China’s interbank market may spread financial flu 30 Aug 2016 The repo market could transmit stresses from weak lenders to the wider financial system before authorities can intervene, a new report argues. Wacky products funding long-term projects with short-term money could fail, sparking a credit crunch.
Tokyo’s analysts outperform on a bad metric 30 Aug 2016 Sell-side researchers everywhere are under pressure to be kind to companies. Yet Japan stands out for the uniformity of opinions, a Breakingviews analysis shows. More than half of big stocks in the country don't have a single negative rating. No wonder short-sellers are circling.
BlackRock’s governance activism finds big target 29 Aug 2016 The manager of $5 trln of funds withheld votes from two Exxon directors at the $360 bln oil giant's annual meeting. CEO Larry Fink has spoken out against management short-termism and recently took on a Hong Kong gold miner. BlackRock is slowly and quietly finding its voice.
Eddie Lampert is more whaling captain than hedgie 29 Aug 2016 Once upon a time, the investor was hailed as the next Warren Buffett. His decade-plus obsession with Sears resembles Ahab's with Moby Dick. Extending another $300 mln loan to the flailing retailer is the latest sign that Lampert just doesn't know how to let go of the harpoon.
China’s big banks enjoy calm before the storm 26 Aug 2016 Net profits at CCB and BoCom are stable, as are bad-loan ratios: a pleasant surprise given the wider backdrop. This partly reflects a growing gulf in asset quality between large banks and their smaller peers. The giants are probably also putting off recognising bad debts.
Handelsbanken partly untangles knotty problems 25 Aug 2016 The Swedish lender has sold its 6.8 pct stake in Industrivarden, distancing itself from the conglomerate’s corporate jet scandal. This also boosts its capital, ahead of potentially punitive reforms. But Handelsbanken’s new boss still needs to prove he is his own man.