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.
Edward Hadas: Tom Hayes had the wrong standards 12 Aug 2015 The convicted trader said he was like most people. They just “do their job” without asking whether it is honest or dishonest. He has a point. Society requires such upward ethical delegation and it usually works pretty well. Except, that is, in the financial world.
Symantec’s Veritas sale tells truth about tech M&A 11 Aug 2015 Offloading the data storage business for $8 bln to Carlyle and Singapore’s GIC ends a decade-long disaster of a deal. Like HP, eBay, Microsoft and others, Symantec discovered it’s often harder to buy than build. Trouble is, breakups and writedowns tend to perpetuate the problem.
UK death-insurance merger makes future less morbid 11 Aug 2015 Partnership and Just Retirement are combining in an all-share deal. The business of offering annuities to high-risk customers got smacked by regulatory shifts in 2014, and both trade below 2013 listing prices. Cost savings make things better, but the sector is still in flux.
Hugo Dixon: How to fix Greece’s banks 10 Aug 2015 The banks are the weakest point in the country’s economic system. They need to be repaired in order to lift capital controls, restore depositor confidence and finance a future recovery. There are some good ways of doing this, even if the best options aren’t making much headway.
Allianz takes Pimco’s fall from grace in stride 7 Aug 2015 With assets under management and profit falling, the German insurer’s Pimco arm is still reeling from boss Bill Gross’ acrimonious exit. But Allianz can ride it out. Its insurance division and a growing in-house asset manager mean it can stick to full-year targets.
MPS ploughs lonely furrow to profitability 7 Aug 2015 Shares in the Sienese bank climbed due to better-than-expected capital and falling bad loans. Yet MPS is still far from earning its cost of equity, and a high stock of bad loans will hold it back in the M&A boom expected in Italian banking. The shares look fully valued.
BoE manages to be transparent yet unpredictable 6 Aug 2015 The UK central bank has for the first time simultaneously released its policy decision, how rate-setters voted, and its inflation report. It’s transparent. But investor shock that only one person voted to hike rates suggests greater openness doesn’t mean greater predictability.
StanChart CEO’s bad numbers don’t disappoint 5 Aug 2015 New boss Bill Winters used first-half results to raise the emerging market bank’s bad debt provisions and halve its dividend. A 5 pct return on equity shows the scale of the challenge. After two months in charge, the CEO has quickly got to grips with StanChart’s biggest problems.
SocGen adds caution to racy business mix 5 Aug 2015 A bumper second quarter in equities trading pushed earnings at France’s second-largest listed bank above estimates. But SocGen is also cutting 850 mln euros of costs and boosting capital. It should make investors more relaxed about a heady focus on Russia and investment banking.
Mediobanca starts to resemble normal bank 5 Aug 2015 The Italian lender reported rising fourth-quarter net profit and loan growth. CEO Alberto Nagel’s bid to turn Italy’s old corporate powerbroker into a profitable lender is paying off. A sensible acquisition and the Italian government’s reform drive are easing the transition.
Alibaba borrows bigger brand to crack U.S. market 4 Aug 2015 Hiring Goldman Sachs former stalwart Michael Evans to grow the business overseas is shrewd. The Canadian rowing champ can open doors previously closed to the Chinese e-commerce group in the West. It’s bad practice, since Evans was an independent director - but good politics.
UK following in Uncle Sam’s punishment missteps 4 Aug 2015 Plea deals for the likes of Barclays may be coming in Britain but have already flopped in America. Promises to clean up, even with fines and monitors, often turn out empty. U.S. enforcers are now pushing JPMorgan and others to admit guilt. Both regimes could stand to toughen up.