Commerz’s $1.5 bln fine brings state sale closer 13 Mar 2015 The German bank had largely provisioned the $1.45 bln in fines paid to U.S. authorities for sanctions and other breaches. Yet closure should help Berlin sell its 17 pct stake. The return of bank M&A is another plus, though Commerz’s huge balance sheet means it is a distinct case.
Euro zone recovery may dampen reform drive 13 Mar 2015 Governments are slowing reform across the euro zone. Brighter economic prospects and loose monetary policy seem to lessen the urgency for tough political choices. Yet the opposite is true: better times should make reform easier and less costly.
Feuding clearers and dealers need a capital umpire 12 Mar 2015 The hot debate at a derivatives jamboree is whether shops that net out swap and futures risk should put up more cash to cover losses. With neither side budging, regulators may have to step in to soothe banks and investors. Forcing clearing firms to be less opaque also would help.
Spain may give UK banking the challenger it needs 12 Mar 2015 Sabadell has offered to buy old-new UK bank TSB for 1.7 bln stg. Half-owner Lloyds has to sell anyhow. The Spanish lender would add foreign reach, while a fully owned TSB could focus on growth, not dividends. That could help it compete against a rash of newly listed peers.
Bank earnings need more stress than dividends 11 Mar 2015 The Fed has approved plans by the 31 biggest lenders to return capital, if not all they’d wanted, to shareholders. As important as the news is to investors and to CEO egos, ensuring bottom lines are robust is more crucial. That’s still an abiding hurdle for the industry.
Deutsche Bank’s main stress test still to come 11 Mar 2015 The German lender flunked Fed stress tests for risk management, along with Santander. It’s bad but not disastrous news – first timers often fail. However it may hand ammo to those at its forthcoming strategy day who’d prefer Deutsche hacked back its outsized investment bank.
Santander’s U.S. woes a cautionary M&A tale 11 Mar 2015 The Spanish bank’s stateside lender is struggling to pass the Fed’s stress test for the second year in a row. A flawed bank takes time to fix. But Santander let it drag on too long. New bosses should help. The tardy response, though, keeps Santander on the takeover sidelines.
Politicians can learn from Wall St’s email snafus 11 Mar 2015 Banker scandals are routinely unearthed because correspondence must be logged on sanctioned platforms. However the brouhaha over Hillary Clinton’s emails plays out, it should be a nonpartisan, teachable moment for the political establishment on the risks of hacks and opacity.
Mark Carney’s triple-bind is recipe for BoE stasis 11 Mar 2015 The UK economy is doing pretty well, which argues for a rate hike. But sterling’s export-denting rise against the euro is a reason to consider extra stimulus. And risks to the housing market abound either way. The Bank of England chief may just leave policy on hold for a while.
UK can get by without homegrown investment banks 11 Mar 2015 Downsizing at RBS and Barclays means Britain has lost two full-scale universal banks. That may upset the odd corporate relationship and dent national pride. But a successful UK-owned broker-dealer is like Andy Murray winning Wimbledon: nice to have, but not essential.
Winner of "Survivor: Mega-Banks" may be loser 10 Mar 2015 Brady Dougan’s departure from Credit Suisse leaves JPMorgan, Goldman and Wells with the last pre-2008 bosses. Dimon, Blankfein and Stumpf have overcome challenges but also are approaching a decade at the helm. One lesson from the crisis was the danger of sticking around too long.
Germany’s problem banks are running out of friends 10 Mar 2015 The ropey Landesbanken lack a business model and access to capital: state owners that paid for previous bailouts are maxed out. Now some of their other stakeholders – Sparkassen savings banks – want to cap their exposure. That could hasten much-needed consolidation.
Credit Suisse finds CEO industry fears – but needs 10 Mar 2015 Tidjane Thiam, who will replace Brady Dougan in July, has no ties or loyalty to investment or private banking. And he has a reputation for making bold moves. It’s a combination that should send shivers not just through Credit Suisse, but the City and Wall Street, too.
Next Prudential chief’s job harder than it looks 10 Mar 2015 Tidjane Thiam’s successor inherits a business with a good strategy that generates lots of cash. As moving the Pru’s domicile is off the agenda, the new CEO’s plan should be more of the same. That makes it difficult to make a mark – but with plenty of downside if things slow down.
Credit report firms finally score one for consumer 9 Mar 2015 America’s Equifax, Experian and TransUnion will heed borrower beefs and lighten up on unpaid medical bills under a deal with NY’s top lawyer. The reforms are overdue and will take too long to implement, but they should at least make getting loans fairer rather than just easier.
UK retreat from RBS is more important than value 6 Mar 2015 Chancellor George Osborne now wants to return the bank rapidly to private hands after May’s election. Both strategy and governance have been flawed. Britain is wary of starting to reduce its 79 pct stake at a loss. But that’s a price worth paying to put RBS on a stable footing.
BPI twist makes breakup an option 6 Mar 2015 The Portuguese bank says it’s worth 2.26 euros a share to Caixa, way above its suitor’s pitch. That’s a punchy 40 pct premium to forward book value. BPI was recently trading at a 50 pct discount. The bluster makes a deal for the group harder, but not a sale of its Angola assets.
Fed stress tests should induce less anxiety 5 Mar 2015 All 31 lenders passed phase one, imagining what might happen to their capital in a deep recession. Last year, Citigroup, BofA and others stumbled in round two. Experience and better guidance from regulators mean a fail this year could be especially ugly for bank chieftains.
EU bonus policy becomes a comedy of errors 5 Mar 2015 Capping variable compensation makes scant sense for bankers; it makes even less sense for asset managers. Doing so, as European authorities are now proposing, will do little for stability but push up compliance costs. The final irony is EU lawmakers didn’t even want it.
BlackRock should embrace its pushy tendencies 4 Mar 2015 Larry Fink, boss of the $4.7 trln asset manager, generally opposes activist investing. At the same time, BlackRock is finding new ways to needle corporate boards by, for example, leaning on long-tenured directors. The quiet approach can work, but it may be time to speak up.