BBVA’s Abengoa swerve cements risk-oversight kudos 27 Nov 2015 Unlike its domestic peers, the Spanish bank didn’t lend to the teetering engineering group. Nor did it invest in Bankia’s failed IPO or Spain’s bad bank, Sareb. Luck may be an element, but BBVA’s risk controls and an independent-minded chairman are probably helping, too.
Barclays money-laundering rap is oddly reassuring 26 Nov 2015 The UK bank has been fined for cutting corners on a 1.9 bln stg deal for politically sensitive clients in 2011. The temptation for banks to bend the rules for VIPs is just as strong today. But more vigilant regulators are chipping away at the idea that this is business as usual.
ECB has bright idea for targeted bank-bashing 26 Nov 2015 Imposing a staggered penalty on banks that hoard cash is one of many ways to ease policy being discussed by the European Central Bank. Such levies have drawbacks. But at least a split-level charge would encourage the biggest hoarders to boost cross-border lending.
Bank regulator’s blunder sums up Europe’s troubles 25 Nov 2015 Lenders’ capital ratios are higher than previously calculated, the European Banking Authority has said. The watchdog’s technocratic remit makes the error galling. Such confusion could deter investment just as the region’s financial institutions are doing more to deserve it.
Europe’s terrible banks look their best in years 25 Nov 2015 Capital levels, profitability and lending rose in the six months to June, the European Banking Authority says. Bad loan ratios are almost double those of U.S. banks, and more EU quantitative easing could be bad for business. Even so, lenders are proving surprisingly healthy.
CalPERS gets what it pays for from private equity 24 Nov 2015 The U.S. pension giant revealed that $24.2 bln of net gains from the asset class over 25 years came at the cost of $3.4 bln in so-called carried interest for fund managers. Private equity is pricey and hitherto opaque, but CalPERS’ analysis so far helps justify the fees.
Time for Germany to let EU banking union fly 24 Nov 2015 The European Commission wants a mutualised deposit insurance scheme for banks by 2024. Berlin may be averse to the idea of financing non-German busts. But there are some safeguards, and unpicking the link between banks and states would better avoid trouble in the first place.
Allianz coal ban will change investment climate 24 Nov 2015 The German insurer is to pull $4.3 bln out of investment in coal companies, ditching its scepticism against blanket anti-carbon policies. This rethink suggests big asset managers are taking climate change seriously. Other carbon-heavy industries like oil and cement may be next.
BBVA’s UK buy sees digital banks going mainstream 24 Nov 2015 The Spanish lender has bought 29.5 pct of mobile-only UK player Atom Bank. The 45 mln stg outlay is tiny beside Sabadell’s purchase of TSB. But BBVA joins Woodford Investment, Toscafund and Jon Moulton in backing Atom. Digital banks may find a way to carve out a valuable niche.
Italy’s zero-cost bailout is too good to be true 23 Nov 2015 The Italian bank resolution fund will cough up 3.6 billion euros to restructure four failing lenders. Officially, public funds won’t be used, but the burden will hit a sector already struggling with low rates and weak demand. Rome could find itself on the hook too.
Transatlantic ATM merger unlocks fortress Germany 23 Nov 2015 U.S. cash dispenser maker Diebold is buying Germany’s Wincor Nixdorf for $1.8 bln. It’s the first deal of its kind done for a target without an anchor shareholder. Nixdorf was initially sceptical. Its acceptance suggests German boards no longer see independence as sacrosanct.
German co-op bank M&A shows Landesbanken the way 20 Nov 2015 The merger of cooperative banks DZ and WGZ is a lesson for Germany’s state-owned lenders. The deal generates 100 mln euros of annual cost benefits. Ropey Landesbanken are bogged down by regional vanities but cannot afford to leave that money on the table by dodging mergers.
UK shuts stable door after HBOS horse has bolted 19 Nov 2015 Regulators are to look at whether those responsible for the bust lender’s demise should face censure. Judging by another report into why HBOS failed, the answer may well be yes. But the meaningful penalties remaining – pension clawbacks or big fines – look legally tricky.
Willis could kill merger-of-equals conceit 18 Nov 2015 The UK-based insurance broker’s $18 bln union with U.S. consultancy Towers Watson is on the rocks. Investors have turned some $5 bln of promised synergy value into $1 bln of value destruction. A rescue would probably unbalance the economics, undermining the promised equality.
UK fund fee crackdown a welcome detour from TBTF 18 Nov 2015 Asset managers this year managed to avoid too-big-to-fail status. The FCA’s focus on whether they deliver a good service is a worthier target. As savers take more investment decisions themselves and banks expand in a capital-light sector, duff performance is a bigger problem.
Wall Street gets early warning from Veritas LBO 17 Nov 2015 Banks are on the hook for $5.6 bln of debt after pulling the refinancing for Carlyle’s buyout of the data-storage unit. It may be a blip, but raises fears of a high-yield market stall. It’s also a reminder of the risk lenders take helping pile leverage on low-rated companies.
China margin finance squeeze is partial solution 17 Nov 2015 Regulators have halved the amount punters can borrow to buy stocks on China’s A-share market. That’s a step towards preventing another speculative bubble. But greater transparency and acceptance of short-selling are also necessary to put equity markets on a more stable footing.
Russia’s big lenders get help swallowing the weak 16 Nov 2015 Sanctions have vaporised 80 local banks this year, with sturdier players mopping up deposits. Big lenders aren’t immune to sketchy liquidity, capital and loan books. But the Kremlin looks supportive, and the strong will only get stronger if Russia and the West can see eye-to-eye.
Portugal’s ropey bank rescue comes home to roost 16 Nov 2015 The “good bank” part of bust lender BES needs another 1.4 bln euros, EU regulators say. If it ends up being sold cheaply, fellow banks that part-financed its rescue could suffer. Had Lisbon taken a tougher line with senior creditors last year, it would be in less of a mess.
Megabanks set example to Japan Inc. on share sales 16 Nov 2015 Japan’s three top lenders plan to slash their huge holdings in client companies. That’s good: the shift should boost the banks’ returns, shield them from market swings, and give more power to regular investors. Even better if smaller banks and non-financial outfits follow suit.