MetLife spinoff plan hedges SIFI and activist risk 13 Jan 2016 The $50 bln insurer may offload its U.S. retail arm. Boss Steven Kandarian is fighting watchdogs over the systemic label, but carving out the parts most vulnerable to capital hikes lessens the impact of losing. And Carl Icahn’s agitation at AIG shows insurers need to stay alert.
Classic cars and cancer enrich private banking fad 13 Jan 2016 Capital efficiency and growth have made wealth management a crowded trade. Differentiation helps banks here. Credit Suisse is to lend more versus illiquid collateral, possibly even vintage cars. UBS touts impact investing in cancer drugs. Deutsche Bank needs hooks like these.
Aegon investor cheer more about cash than capital 13 Jan 2016 The Dutch insurer has divulged a higher-than-feared position under Solvency II capital reforms. A strong showing is vital, but the real point is that it means Aegon can give clarity on dividends. The ability to make payouts is becoming the de-facto sign of insurers’ health.
Guest view: Euro zone needs workable banking union 12 Jan 2016 The 19 member states have so far failed to put in place a full regime of bank oversight, argues former Citi exec William Rhodes. As U.S. and euro zone interest rate policies diverge, this is a big risk. To complete banking union, agreement on proper deposit insurance is a must.
Monte dei Paschi stuck in familiar limbo 12 Jan 2016 The Italian bank’s shares are whipsawing again. MPS doesn’t look like a bail-in candidate: it passed ECB capital tests and its bond values are steady. But with bad debts as a proportion of equity and reserves huge compared to EU peers, investor returns look set at sub-par level.
Smartphones battle web giants for China payments 12 Jan 2016 Apple and Samsung are joining the fight for mobile wallets in the People’s Republic. The smartphone makers have teamed up with state-owned UnionPay to take on dominant web groups Alibaba and Tencent. UnionPay’s card network and technology may give the new alliance an edge.
Europe’s wait for a new big boutique will go on 7 Jan 2016 Robey Warshaw ranked 11th in European M&A last year, as a merger boom benefitted boutique advisers. To weather a down cycle, the youngish outfit could tie up with fellow newbie Zaoui & Co. But the integration risk probably outweighs the chance to create another Rothschild.
Bank culture just one side of a strategic trilemma 7 Jan 2016 Britain has scrapped a state probe into banking ethics. So it should – such reviews are usually a waste of time. A better way is to see bank culture, size and shareholder value as three irreconcilable sides of a triangle. Recent history suggests banks can achieve, at most, only two.
Portugal’s creditor-mugging may prompt EU copycats 7 Jan 2016 Lisbon’s decision to trash bondholders of Novo Banco rode roughshod over creditors’ claims for equal treatment. The region’s new resolution regime is meant to be clearer. Yet it too leaves room for more bad behaviour.
Morgan Stanley revamp puts a CEO on the market 7 Jan 2016 The Wall Street bank’s boss James Gorman has chosen Colm Kelleher as heir apparent, leaving wealth management chief Greg Fleming up for grabs. Kelleher may be the ultimate survivor, but Fleming’s skills may be of use to firms from BlackRock to Amex to U.S regional banks.
EU bank profit riddle has deceptively easy fix 6 Jan 2016 Bank profitability has replaced capital as the ECB’s chief regulatory concern. Since interest rates in the region are low and economic activity is slow, the easiest way to bolster earnings is widespread M&A. But neither central banks nor lenders are likely to want to play ball.
Wall Street’s pay reveal has germ of a good idea 6 Jan 2016 U.S. banks now say how many of their staff in Europe earned 1 mln euros or more in 2014. Knowing that 1,107 bankers from the top five did so is no great surprise. But JPMorgan’s policy of cancelling bonuses if long-term return targets aren’t met could make pay more defensible.
Soros aura brings rare $4.5 bln hedge-fund startup 5 Jan 2016 Scott Bessent, the famed investor’s ex-CIO, has raised one of the biggest totals ever for his firm, Key Square. That’s remarkable in an era of subpar hedgie returns, even if $2 bln comes from Bessent’s former boss. It’s also evidence of the lasting power of industry pioneers.
Dixon: EU enters brave new world of bank bail-ins 4 Jan 2016 Europe has wasted too much taxpayers’ money rescuing failing lenders. So it is right to try to get investors to help foot the bill in future. But the tough new regime carries political risks which could make the rumpus caused by recent bail-ins in Italy and Portugal look minor.
Asian bankers will shift from deals to distress 4 Jan 2016 Cheap credit helped drive Asia’s merger boom. As growth slows and debt becomes more expensive, bankers are limbering up for a wave of restructurings. The work can be lucrative, but arranging corporate burials requires a very different set of skills than presiding over marriages.
Review: Making Big Data visible and tangible 31 Dec 2015 Projecting selfies onto a screen in real time shows both the value and vulnerability of today’s flood of ones and zeros. A London exhibition explores the good, the bad and the infrastructure of data from inventive angles. It makes a vital unseen world visible – and scary.
Jamie Dimon, 10 years on, is hard bank CEO to beat 30 Dec 2015 Looking back on a decade running JPMorgan, the boss has had missteps like the London Whale, big legal fines and clashes with regulators. Yet Dimon has fashioned a bank with leading market share, top-tier returns and a head start in fintech. It’s well placed for the next 10 years.
Fund glut will send Asia’s buyout barons off-piste 30 Dec 2015 Local private equity firms are flush with unspent capital. Though that’s a global issue, it’s more acute in Asia due to a dearth of sizeable takeover targets. Firms will be tempted to overpay for assets, buy businesses from rivals, or drift into unfamiliar kinds of dealmaking.
Capital drought will spark unicorn M&A orgy 23 Dec 2015 Plentiful money has detached valuations on many hot private tech firms from reality. About a third of the 144 private startups worth at least $1 bln are valued at precisely that much. As capital dries up, selling to bigger rivals or mating with other unicorns becomes appealing.
Banks’ low UK tax bill hands ammo to EU exit camp 23 Dec 2015 Seven big investment banks paid just $31 mln of UK corporation tax on profit of $5.3 bln in 2014, Reuters has found. Historic losses reduced the bills, and taxes paid by employees remain chunky. But the revelations will help those agitating for Britain to quit the European Union.