Buyout barons like the sound of a blank check 2 Sep 2015 David Bonderman’s TPG and Alec Gores’ eponymous firm are the latest to jump on the shell-company bandwagon. A cutthroat M&A scene and the success enjoyed by the likes of Martin Franklin have amplified the siren call. Not all acquisition nous is necessarily the same, however.
Novo Banco has issues – Chinese owner or not 2 Sep 2015 Insurer Anbang is no longer in line to acquire the bailed-out Portuguese bank. Yet given rival Chinese group Fosun remains in the race, Chineseness is unlikely to be the problem. Any buyer for Novo Banco needs to get comfortable with its uncertain capital and litigation bills.
Poland makes bank investors political playthings 1 Sep 2015 Warsaw could force lenders to cough up $5.9 bln to relieve borrowers with Swiss franc mortgages not obviously in distress. With elections looming, the party ahead in the polls wants to tax banks’ balance sheets. It may be pure politics, but the danger is that foreign money flees.
Markets are a test of central bankers’ backbone 27 Aug 2015 Equities are rallying after a Fed official cast doubt on the need for a September rate rise. China’s slowdown and sliding commodities may warrant circumspection among global central bankers. But market gyrations don’t. Monetary policy inaction should be for the right reasons.
China’s sensible rate cut sends dangerous signals 25 Aug 2015 The central bank has lowered interest rates by a quarter point and reduced the amount lenders must hold in reserve. It helps ease the slowdown and offsets capital outflows. But by responding to two days of stock market turmoil, policymakers run the risk of stoking moral hazard.
Zurich buys protection with 5.6 bln pound RSA bid 25 Aug 2015 The Swiss insurer has made a 550 pence-per-share indicative offer for its UK peer. At that price, it could achieve a 10 pct return with fairly undemanding cost savings. Twitchy markets may help Zurich clinch a deal that both sides’ shareholders can argue is a fair result.
Credit doomsayers offer confusion not foresight 24 Aug 2015 Investors were selling corporate bonds before the latest global stock market slide. That could be an echo of the 2008 financial crisis, when equities ignored warnings in credit markets. The message, though, is mixed. Credit pros aren’t reliably prescient Cassandras.
ABN Amro’s IPO could prove sweetly timed 21 Aug 2015 The Dutch bank’s second-quarter earnings doubled to 600 mln euros, justifying state zeal for a reprivatisation. ABN’s first sale may end up a third below the government’s in-price, like the UK’s selloff of RBS. But with the domestic economy firing, pressing ahead makes sense.
Portugal offers drama without a crisis 20 Aug 2015 Debt is too high, investment too weak, and reforms patchy. Still, the country’s politics are relatively stable, the economy is growing and unemployment is falling. Lisbon has done more to avoid collapse than Greece but has yet to find a way of lightening its fiscal burden.
Raiffeisen’s bonus plan is a capital idea 20 Aug 2015 The Austrian bank’s listed arm will only pay bonuses if its balance sheet position improves. That safety-first policy befits its considerable exposure to Russian borrowers. Over-reliance on any single target for setting pay can be risky, but this is a step in a helpful direction.
New bank M&A powerhouse leaves rivals for dead 18 Aug 2015 Regional U.S. lender BB&T’s $1.8 bln swoop for National Penn is its fourth deal in a year. The acquisition makes financial sense and is more proof the Fed supports industry tie-ups. The longer other banks stay on the sidelines, the more it’ll look like they fear rejection.
Carlyle hedge fund speed bumps morph into sinkhole 18 Aug 2015 Claren Road lost money on Fannie and Freddie, energy and Greece. That doesn’t explain how assets tumbled from more than $8 bln to potentially $2 bln in a year. The saga shows how a scatter of small doubts can quickly erase a solid record – even amidst unthreatening broader markets.
Sizing up FX rigging damage is imperfect science 18 Aug 2015 There are ways of guessing how much currency rate manipulation cost some investors on some days. Settlements by banks in the U.S. have set the ball rolling. But these are just estimates, and sometimes there may have been gains. Nuisance value may matter more than client losses.
Peripheral EU banks get reminder of their frailty 18 Aug 2015 Lenders stuffed with government bonds have gained from falls in yields since 2012, but Greek volatility hurt their book values in the second quarter. Right now, ECB quantitative easing means bond prices won’t fall far. If this ended and bond markets crashed, things could get trickier.
Goldman’s bank deal swaps one risk for another 14 Aug 2015 Snapping up $16 bln of deposits from GE Capital helps cut the firm’s costs and reliance on bond market financing. Regulators may be happy, but the more deposits it has, the more Goldman, like Morgan Stanley, can use them to fund some trading. That poses systemic issues, too.
Greek bank bail-in threat starts to recede 13 Aug 2015 Savers have rightly feared their deposits may get turned into equity. Draft proposals for Athens’ new bailout imply this may be unnecessary. It probably isn’t enough to entice private investors, but boosting depositor confidence is an important step in clearing up Greece’s mess.
Aegon gives peek at insurers’ new capital gremlins 13 Aug 2015 The Dutch insurer’s shares slumped after it adjusted down its estimated capital ratio under new Solvency II rules. Before the new metrics go live next year, more insurers could unearth nasty surprises. Even after, capital positions are set to be more volatile.
SunGard LBO club may yet find reason to cheer 12 Aug 2015 The seven private-equity owners are selling the financial software firm to FIS for $9.1 bln. The 10-year investment yielded a dismal 4 pct internal rate of return. Getting out may alone offer relief, but the firms hold a big, spun-off unit that could still sweeten the end result.
GE loans injection gives Capital One health boost 12 Aug 2015 The bank is buying the conglomerate’s $8.5 bln portfolio of medical loans. Using them to replace lower-yielding bonds on its books should provide an immediate fillip to earnings. As long as the healthcare industry keeps growing, the 6 pct premium CapOne is paying looks justified.
Hackers show news-release business past deadline 12 Aug 2015 Cyber thieves stole company announcements before PR Newswire and others could make them public, reaping some $100 mln from illicit trades. The distributors’ security flaws may give clients more reason to dump the pricey services - especially with social media options on the rise.