Caixabank fail heralds fantasy Portuguese bank M&A 24 Jun 2015 Caixa’s withdrawn bid for BPI makes a merger of the latter with bigger rival BCP more likely. Meanwhile, the race to acquire the good bits of bust lender BES is hotting up. Both sagas remain unresolved, but Portugal’s bloated banking sector could soon be whittled down.
Uncle Sam wastes home-loan crisis 23 Jun 2015 Tackling expensive rent is a better policy goal than pushing mortgages – and would arguably create more jobs. Instead, Washington has stoked growth in home loans with low down payments and less creditworthy borrowers provided by shadow banks. That’s counterproductive.
UK’s imperfect bank pay rules still pack a punch 23 Jun 2015 The Bank of England’s code for investment bank remuneration introduces a sliding scale of deferral and clawback periods that hinge on seniority. Keeping bankers from their winnings for 10 years may still not be enough. But it positions the UK as significantly tougher than peers.
Rob Cox: Don’t underestimate Exor’s John Elkann 23 Jun 2015 Fiat Chrysler CEO Sergio Marchionne is the one leading a coercive charm offensive for car industry consolidation, but it wouldn’t be happening without the Agnelli scion’s support. Exor’s hostile bid for PartnerRe signals a hard-nosed approach that GM and others shouldn’t dismiss.
Living wills face do-or-die moment 22 Jun 2015 The biggest U.S. banks will soon submit the latest drafts of how to limit contagion if their firm collapses. Most flunked previous rounds but suffered no consequences. If regulators don’t punish failure this time, living wills risk becoming a farce worth forgetting.
EU top brass take a sunny view of banking union 22 Jun 2015 The bloc’s five most senior leaders are calling for a common deposit guarantee scheme for euro zone banks. That would push EU harmonisation forward - a much needed tonic with Greece on the brink of an exit. Yet political suspicion over fiscal transfers may still muddy their rosy vision.
SocGen’s asset management exit could prove shrewd 22 Jun 2015 The French lender is to list the remaining 20 pct stake it holds in Amundi, valuing the asset gatherer at 7 bln euros or more. Most banks have bulked up in capital-efficient funds businesses. But bond market outflows and heightened liquidity risk make it a less obvious bet now.
ConAgra’s smorgasbord is ready to carve 19 Jun 2015 The Hunt’s-to-Swiss Miss conglomerate’s $6.8 bln acquisition of Ralcorp in 2013 has left a bad taste for shareholders. Pushy Jana Partners is ready to shake up the board. ConAgra’s myriad brands probably fit better elsewhere. The question is how to slice it.
Lloyds CEO ring-fences rivals with reform praise 18 Jun 2015 Antonio Horta-Osorio reckons rules forcing some UK banks to erect a firewall around retail deposits will cut their risk and capital needs. Easy for him to say: the rules won’t hit Lloyds much. But carving big lenders into bite-sized chunks will help tackle complexity discounts.
Guest view: Apollo is fleecing OM shareholders 17 Jun 2015 The $1 bln buyout undervalues the specialty chemicals maker, writes Jeffrey Bronchick, whose Cove Street owns a 1.5 pct stake. The implied price Apollo is paying for the main magnetics unit is just 1.7 times EBITDA. Barring a revolt, a go-shop provision is the last best hope.
Fed hikes may flummox newbies and old hands alike 17 Jun 2015 Many people in the financial markets have never worked through U.S. policy rate rises. Unhappily, training and textbooks are of limited use, because there are no precedents for the end of so many years of ultra-low rates. Besides, crisis and regulation have transformed trading.
China mixes up crowdfunding and groupthink 17 Jun 2015 Helping small companies raise equity online promotes innovation and indulges the Chinese dream of getting rich quick. Alibaba and JD.com are getting in on the act. But as property developers join in, crowdfunding may become a way to get the public to provide a financial lifeline.
Rob Cox: Colt failure more mismanagement than guns 16 Jun 2015 The 179-year-old maker of the revolver that won the U.S. West has filed for a fast-track bankruptcy. Sciens, the buyout firm that sucked Colt dry with dividends and fees and now owns its headquarters, is the default bidder. That could mean déjà vu for the gunmaker and lenders.
Wall Street lead over EU banks looks set in stone 16 Jun 2015 European trading and advisory revenue is down 30 pct since 2010 while U.S. investment banking has grown. Now Deutsche Bank and HSBC are cutting further, even more ground will be ceded. The region’s tentative recovery and capital markets project offer only slim hope of a reversal.
Greek bank bad debts as scary as liquidity woes 16 Jun 2015 If and when Greeks stop draining deposits, the country’s banks still face a big problem: not enough equity to absorb losses on bad loans. Soon 40 pct of assets will be in trouble. Some will recover with the economy, but lenders need lawmakers to amend bank-unfriendly rules too.
Zimbabwe’s 15-digit money woe is mercifully rare 12 Jun 2015 The African nation is paying one U.S. dollar for every 35,000,000,000,000,000 of its old scrapped scrip. Zimbabwe is a byword for monetary disaster but the outcome is unusual. It shows it takes truly exceptional incompetence to create hyperinflation.
UK strikes right balance on bank/taxpayer pain 11 Jun 2015 Chancellor George Osborne is to reprivatise RBS, but has held back from scrapping a bank levy that is prompting HSBC to consider redomiciling. Both decisions could mean a loss for the taxpayer. But selling RBS makes long-term sense, and there’s still scope to keep HSBC in the UK.
Vatican moves toward higher tone in tax debate 10 Jun 2015 The Church garnered a well-deserved reputation for financial misdeeds over the ages. Now it’s signed up to obey tough U.S. tax rules. The Holy See has never lacked noble words on the matter: “He that hath ears to hear, let him hear.” Now it has actions to back them up.
HSBC’s exit exposes Brazilian banking conundrum 9 Jun 2015 The UK lender’s low returns, small market share and lack of global clients are driving it from Latin America’s biggest economy. Yet local banks are enjoying one of their best years ever. Large size and high interest rates are the main reasons. A recession could change all that.
Canadians add imagination to GE’s buyout work 9 Jun 2015 CPPIB is spending $12 bln to buy the U.S. conglomerate’s mid-market private equity lender. The manager of pensions for half Canada’s population gets both an investment and scope to expand. Assets of C$265 bln allow it to scale in-house rather than paying up for outside managers.