Greenhill owners buckle up for roller coaster ride 27 Jan 2016 Delayed deals have sent the bank’s stock into a deeper dip of late than rivals’ shares. Positive signs in last quarter’s results may reverse the drop. If shareholders can’t grasp the boutique’s quirky business, though, they’ll keep ending up with their stomachs in their mouths.
United’s pesky investors chart risky flight path 27 Jan 2016 Altimeter Capital and another fund are pressuring the No. 2 U.S. airline, whose stock has sagged amid the CEO’s health problems and lower traffic at its Houston hub. Cheap oil creates room for share-lifting payouts, but United could use the cushion when future turbulence strikes.
Ackman inadvertently makes case for index funds 27 Jan 2016 The Pershing Square boss rails against passive portfolio managers in his latest missive. Bill Ackman also blames his own woeful 2015 performance on bad market timing and hedges that didn’t work. That encapsulates why most investors should stick to the likes of the S&P 500.
Italian bad bank satisfies both Rome and Brussels 27 Jan 2016 Italy has a plan to make its lenders healthier by letting them sell toxic debt to new securitisation entities. But overly cushy terms would break state-aid rules. Rome’s fix is a guarantee for which the banks pay a premium – but whose cost is reduced via a sleight of hand.
Even hedgies have (Tudor) Joneses to keep up with 27 Jan 2016 An annual ranking of the 20 most profitable hedge-fund managers ever, including Ray Dalio and George Soros – but this time excluding Bill Ackman – suggests they have made almost as much as the rest combined. Would-be investors take note: The 0.1 pct have their own 0.1 pct.
Phibro deal resurrects Wall Street’s worst ways 27 Jan 2016 Morgan Stanley’s ex-commodities boss is acquiring assets of the oil-trading shop that once bought Salomon Bros. Breathing life into this old brand is misplaced sentimentality. Phibro’s history is stuffed with coups, excess pay, trading hubris and the buy-high, sell-low mentality.
Santander has been punished enough 27 Jan 2016 It has been easy to construct a bear case around the Spanish bank based on its Brazilian exposure, weak capital and frail home market. But with shares trading below those of peers, the bad news is already priced in.
RBS bad news is actually a small positive 27 Jan 2016 The state-owned UK bank has pre-announced a host of charges that will deplete capital and knock 2.5 bln stg off earnings. But RBS has a buffer. The closer it gets to addressing its main uncertainty – U.S. mortgage litigation – the closer dividends and reprivatisation will look.
Generali CEO exit bearish sign for corporate Italy 26 Jan 2016 Mario Greco’s imminent departure from the Trieste insurer to rival Zurich is a direct transfer of Italian talent across the Alpine border. His new employer could use the help. But concerns that Generali’s board was returning to its “salotto buono” days would be worrisome.
AIG makes late push toward mediocrity 26 Jan 2016 The mega-insurer unveiled plans to sell businesses, slash costs and return $25 bln to shareholders. That’d be a lot for most companies under siege from an activist like Carl Icahn. It’ll only get AIG to a subpar return on equity of 9 pct. This breakup story has further to go.
Banks give U.S. regulators a deal to cherish 26 Jan 2016 Buying cross-state rival FirstMerit for $3.4 bln should make Huntington Bancshares big enough to compete without being too big to fail. With some $100 bln in assets, it’ll be a stronger rival in important Midwestern cities. Even if shareholders have worries, watchdogs shouldn’t.
Santander’s animal spirits face capital constraint 25 Jan 2016 The Spanish bank is mulling a bid for RBS bank branches in the UK. The deal makes sense, but funding it may be tricky. Boss Ana Botin walked away from the deal in 2012 and her bank is tight on capital. A rights issue could do it, but Botin needs to get the share price up first.
UniCredit is acid test for EU hybrid bank bonds 22 Jan 2016 Yields on the Italian bank’s AT1 debt have jumped. Given these new instruments allow coupons to be turned off at any time, it’s logical for investors to fret about banks near trigger points. But it will show if banks and regulators are ready to use the weapons at their disposal.
Italy nears bullet-biting time on bad debt mess 21 Jan 2016 Rome hopes to get the nod from Brussels for a bad bank to sort its lenders’ toxic debt. The snag: lenders may have to sell at even bigger discounts than Ireland’s did. After years of trying to avoid robust state action, Italy is realising that only brusque treatment will work.
Goldman and rivals’ pay cut may have bright side 20 Jan 2016 Staff compensation at the Wall Street firm is 8 pct less on average than in 2014 and down almost 11 pct at Morgan Stanley. JPMorgan workers fared better but still took a hit. With share values way down, though, those paid in stock may get a great deal – barring another crash.
Italy’s banks hit by home folly and European fist 20 Jan 2016 Italian financial stocks are collapsing amid fears that an ECB probe into their huge bad debts will undermine dividend plans. Rome’s weak growth and slow reforms are partly to blame. But European rules preventing bad banks and requiring bail-ins are fanning the flames.
U.S. bank laggards prove cuts alone don’t cut it 19 Jan 2016 Morgan Stanley and BofA had pitiful fourth quarters despite slashing more costs. Bosses Gorman and Moynihan have some decent businesses – as does Citi, another weak performer. Even with leaner operations, though, they aren’t eking out anything like the returns investors expect.
Credit Agricole’s tortuous saga takes hopeful turn 19 Jan 2016 The French group is mulling the sale of its stakes in over three dozen regional banks, echoing a similar 2013 disentanglement by Natixis. It wouldn’t end Credit Agricole’s cumbersome mutual structure. But greater simplicity, plus a potential cash payout, would be welcome.
NAB sets suitably low bar for Clydesdale float 18 Jan 2016 The Australian lender will IPO its UK arm for as little as 0.6 times tangible book value, a discount to rivals even after recent price falls. Clydesdale’s restructuring means it may eventually deserve better; its current numbers and buy-to-let exposures suggest it doesn’t yet.
Too-big-to-fail cabal nursing $130 bln in damages 15 Jan 2016 That’s the amount of market value swiped from the top six U.S. banks in the past two weeks. All but Wells Fargo now trade below book value. It’s not a reaction to lackluster fourth-quarter results, but a sign investors expect a year of pain. Whether they’re right is a toss-up.