HSBC continues to wind back the clock 9 Jun 2015 Four years since he started pruning the bank, CEO Stuart Gulliver is cutting risk-weighted assets by a quarter and shedding 50,000 employees. HSBC is returning to its roots as an Asia-focussed trade lender, though investors will have to wait almost three years to feel the effect.
Anshu Jain has an embarrassment of job options 8 Jun 2015 Deutsche Bank’s departing co-CEO can follow so many paths. John Thain downsized. Bob Diamond went to Africa. Huw Jenkins and Alan Schwartz took No. 2 roles elsewhere. John Mack got techie. Jes Staley turned hedgie. And then there’s the Stan O’Neal and Ken Lewis option. Bow out.
Anshu Jain’s painful lessons for new Deutsche boss 8 Jun 2015 The co-CEO’s departure has pleased investors irked by the bank’s lack of progress on cutting costs and boosting capital. Jain was slow to re-engineer what proved to be a flawed business model for the post-crisis era. New broom John Cryan can learn from his predecessor’s mistakes.
Deutsche CEO switch eases only two of its problems 7 Jun 2015 Joint bosses Anshu Jain and Juergen Fitschen are being replaced by ex-UBS CFO John Cryan. It’s oddly timed, but logical after poor results, scandals and rising investor ire. Cryan, though, needs to swiftly fill in the gaps of a questionable strategy that isn’t entirely his own.
For bonds, crowds are more dangerous than Draghi 4 Jun 2015 The ECB chief’s relaxed attitude to volatility is fuelling gyrations in euro zone debt markets. But Mario Draghi is only stating the obvious. Supposedly risk-free assets have become some of the most perilous. The biggest hazard for investors is being part of too big a herd.
Apax’s new fund looks cheap for a reason 4 Jun 2015 The private equity firm is selling shares in a 611 mln euro fund at a 13 percent discount. That’s sensible for an asset class as chequered as listed private equity. Buyers will have to balance value against an untested strategy and little control. They shouldn’t count on a pop.
Overbanked tech IPO may rival Goldman’s deal 3 Jun 2015 Cybersecurity firm Sophos has six banks selling at least $125 mln of stock. That’s an average $21 mln per firm, a light workload. Facebook’s 33 underwriters shifted far more. Perhaps only the 128 banks on Goldman’s 1999 IPO did less. But the numbers hide a broader farce.
Lloyds legal fail takes gloss off 2009 Houdini act 3 Jun 2015 A UK court says the bank can’t redeem 4 bln pounds of CoCo bonds that helped it evade an even bigger crisis-era bailout. Without them, Lloyds would be much further off escaping its state shareholding. But it’s still left paying 200 mln pounds a year for near-useless capital.
Elite FX club is better with China in than out 3 Jun 2015 Adding the yuan to the IMF’s reserve currency basket this year would be an easy win. It’s a big symbol for China but costs little for other constituents. Moreover, officially designating China as a lynchpin of the world’s financial system may convince it to act the part.
Apollo strains to heed LBO mission control 2 Jun 2015 Leon Black’s private equity shop is paying a headline valuation of 9.4 times EBITDA for specialty chemicals maker OM Group. Side deals will lower the multiple but Apollo’s avowed discipline looks tough in a pricey market. It’s a small buyout that illustrates a bigger industry problem.
Dick Fuld spits right into perfect storm 28 May 2015 Lehman’s former CEO turned up for a rare public appearance since his bank went bust seven years ago. Most of Wall Street has moved past his distorted version of the crisis. Voices like Fuld’s could risk lessons learned being forgotten faster – if anyone takes them seriously.
Russian banks find fragile shelter in macro storms 28 May 2015 Higher funding costs predictably hurt interest margins at the struggling state’s two biggest lenders in the first quarter. The pain at Sberbank and VTB was limited by trading gains, as the rouble and oil price both rose. But bad debts and political tension remain big threats.
RBS would be good fit for Northern Rock leftovers 28 May 2015 The UK state-held bank may bid for a 13 bln stg mortgage portfolio held by its fellow state-run entity. That sounds weird, but Granite could boost RBS’s weak profitability. That in turn could give a helpful shove to the UK’s efforts to sell the bank back to the private sector.
Edward Hadas: Why Lehman Brothers lives on 27 May 2015 Almost seven years after the U.S. investment bank failed, the reputations of financial markets, central banks and economic theorists remain deeply tarnished. Worse, the shock permanently damaged already-weak governments, ever-fragile labour markets and the frayed social fabric.
Congress makes Wall St look like paragon of virtue 26 May 2015 U.S. lawmaker Paul Ryan and colleagues claim a recent court ruling exempts them from a self-imposed ban on insider trading. That’s lame in any event, but also hypocritical: They’re mulling bills to expand constituents’ liability. They should get their own houses in order.
Rob Cox: Bolivarian bank dream faces Andean climb 26 May 2015 Brazilian lender Itaú has pursued a strategy to create the first truly pan-Latin America financial institution. Its biggest effort to date is at an impasse. The merger it thought it cleverly struck with Chile’s CorpBanca is backfiring in ways that may cost it treasure and face.
Euro pessimists are taking the long view 26 May 2015 The single currency is below $1.09 for the first time in nearly a month. Its short-term fortunes may depend as much, if not more, on when U.S. rates will rise as what happens in Greece. But options prices reveal that euro bearishness is becoming more and more entrenched.
M&A dealmakers fight different battle of bulge 22 May 2015 With his energy-focused startup, ex-Barclays bigwig Skip McGee can exploit a trend of smaller advisers winning business from banking supermarkets. There’s new competition by size in the indie world, too, though. Bigger players like Lazard and Rothschild are reclaiming dominance.
Cult of central bank transparency is too powerful 22 May 2015 Rate-setters around the world are in a bind. The zeitgeist demands they share every twist and turn of their deliberations. But too bright a light can be blinding. Hard talk is often best done in private. While some transparency is good, more is not always better.
UK can use bank reform as EU bargaining chip 22 May 2015 France objects to Britain adopting its own extra-tough bank structural reform, reports say. But there’s little to gain from ring-fencing retail lenders, and a flexible UK can negotiate a better deal with Brussels. A British retreat could kill two birds with one stone.