UBS’s golden ratio shows cuts are vital 3 May 2016 The Swiss bank is rejigging its wealth unit after trading income as a percentage of invested funds dipped to historic lows. Group return on equity was just 5.1 pct in the first quarter. UBS depends on rich folks being active. When they aren’t, the only option is to trim expenses.
BNP keeps capital catch-up plan on track – just 3 May 2016 The French bank’s revenue shrank less than costs, reversing the dynamic from the previous quarter and helping returns to improve. BNP needs profits to bring solvency in line with peers. But it would help if earnings were driven by a higher top line, not just lower bad debts.
Aberdeen’s big problem is emerging "meh" 3 May 2016 The UK asset manager’s stock has slumped, despite a recovery in its core emerging market investment business. The good news is that outflows have slowed, and Aberdeen is hacking costs and diversifying. The bad news is that the recovery is tepid, and clients come back only slowly.
Who cares who invented bitcoin? 2 May 2016 The whole point of the cryptocurrency and related technology is that they now live a life of their own. That makes Australian Craig Wright’s claim to be bitcoin creator Satoshi Nakamoto a curiosity at best. There is, however, a caveat related to the originator’s personal stash.
Washington starts hitting fintech where it hurts 2 May 2016 The FTC is probing PayPal’s fast-growing payment app Venmo. Customers and big bank bosses including Jamie Dimon and Brian Moynihan have complained about lax data protection at financial upstarts. The watchdog’s move serves as a warning not to favor speed over security.
RBS sale delays hit credibility more than finances 29 Apr 2016 The part-state owned UK bank says it may miss an EU-mandated timeframe to dispose of 300 branches. Even if it takes another 12 months, RBS’s capital position should be OK. But for investors to believe the path to dividend reinstatement, it needs to avoid any missteps.
Deutsche Bank’s zeal to reform takes odd detour 29 Apr 2016 The German bank has parted company with the head of its integrity committee, following criticism of his “overzealous” approach. Deutsche has new executives and says it is committed to addressing past scandals. If so, there should be a place at the table for such ardour.
Euro zone needs better glue than Canadian kindness 29 Apr 2016 Portugal’s eligibility for ECB bond-buying hangs on the rating of Toronto-based agency DBRS. Effectively, the ECB has outsourced the decision of whether to cut off a country. It works to a point: it’s hard to imagine the ECB abandoning Italy or France whatever their ratings.
Private equity gets loco with pricy Spanish IPOs 29 Apr 2016 Telepizza’s dismal IPO debut joins a list of recent duds sold on the market by buyout barons. Investors in other IPOs like Parques Reunidos are getting more cautious. By pushing for high prices, buyout barons may be shooting themselves in the foot.
Deutsche Bank upgrades from dire to depressing 28 Apr 2016 The German lender made first-quarter earnings of 236 mln euros, confounding forecasts for a loss about that size. But Deutsche’s capital position fell, return on equity was just 1.4 pct and the only bit that really beat revenue expectations was Postbank, which is on the block.
Lloyds’ dividend promise has Brexit caveat 28 Apr 2016 The UK bank’s payout growth hinges on keeping its capital ratio at 13 percent - which it barely managed in the first quarter. Lloyds’ potential to generate lots of capital is undimmed. But if Britons vote to quit the EU, those earnings may have to be diverted to running repairs.
BBVA finds pain in Spain and USA 28 Apr 2016 Shares in the Spanish lender dropped after it disclosed weak first-quarter profit. Currencies and lower trading income have hurt, but business in Spain is sagging and provisions grew in the U.S. It’s an inauspicious start to what was supposed to be a strong year.
Goldman may find some dark alleys down Main Street 27 Apr 2016 The Wall Street titan is going mass market with GSBank.com to fund itself with more deposits and fewer short-term loans. It also invites scrutiny from more regulators, including the CFPB, DFS and other state enforcers. It’s not yet obvious the tradeoff is worthwhile for Goldman.
Euro zone cracks show in QE plaster 27 Apr 2016 The ECB’s money printing has squashed interest rates for countries and companies, even in the south. Yet the difference in borrowing costs between riskier sovereigns and Germany is rising. Bond-buying has not made investors insensitive to risk. It may not prevent default either.
Barclays inches forward as rivals inch back 27 Apr 2016 The UK lender’s first-quarter investment banking performance was less calamitous than peers’, but group return on equity was a sparse 3.8 pct. It should tick up if boss Jes Staley can keep selling unloved assets. If speed sometimes takes precedence over price, that’s okay.
Santander coping with trifecta of pain 27 Apr 2016 The Spanish bank’s three main markets of Brazil, the UK and Spain all face headwinds. Yet earnings fell a better-than-expected 5 percent in the first quarter and capital improved. The rest of the year may be rocky, but Santander deserves some credit.
Citi shareholders slow bank breakup momentum 26 Apr 2016 A proposal simply to study a split of the mega-bank led by Mike Corbat won just 3.5 pct support. That’s a broad rejection of rhetoric from the U.S. presidential race and elsewhere. Bigger is better probably will prevail until Wall Street and Main Street can agree otherwise.
Bangladeshi heist updates notorious robber’s maxim 26 Apr 2016 Willie Sutton held up banks “because that’s where the money is.” After its network was used to try and steal $1 bln of South Asian funds from the New York Fed, SWIFT is warning customers about attacks. Rich governments are as vulnerable as big lenders in the age of cyber hacks.
Confucius say: Don’t confuse Ant with unicorn 26 Apr 2016 The $60 bln implied value of Chinese fintech group Ant Financial suggests PayPal-style innovation on steroids. It’s not so simple, though. The Alibaba affiliate’s fortunes may be tied more closely to the vagaries of PRC state capitalism than to private-sector disruption.
Perella Weinberg scratching M&A itch in oil patch 26 Apr 2016 Joining forces with Tudor Pickering, as is being discussed, would combine energy expertise with restructuring know-how and global reach in one shot. A Goldman Sachs imprimatur also could help unite the boutique cultures. The logic suggests there’s more to it than just doing a deal.