StanChart M&A theory will finally become reality 19 Dec 2023 For years, the bank run by Bill Winters was cheap but dysfunctional. Now, it’s producing significantly higher returns on tangible equity but the valuation remains low. If that persists in 2024, it will be hard for suitors like First Abu Dhabi Bank to resist launching a bid.
Banks’ hidden losses are surprise survivor of 2023 13 Dec 2023 The same paper deficits that helped fell Silicon Valley Bank in March still burden lenders worldwide. Bank of America alone sits on $130 bln; US banks nurse a record sum. Investors are now better at telling what’s scary from what’s not, but fuzzy accounting remains unhelpful.
Bank CEOs channel movie mobsters in Basel fight 7 Dec 2023 New capital rules are beset by inefficiencies and inconsistencies. Yet eight US bank chiefs appearing before the Senate delivered a more populist warning: water them down, or regular Americans will be impoverished. It’s disingenuous at best; counter-productive at worst.
Qatar Barclays sale raises turnaround stakes 5 Dec 2023 The Gulf state almost halved its holding in the British bank ahead of a strategy update. It suggests little faith that the $27 bln lender will tackle its lowly valuation and investment banking reliance. CEO C.S. Venkatakrishnan needs a bold plan to keep investors happy.
UniCredit G-SIB downgrade tests CEO animal spirits 1 Dec 2023 The Italian lender has lost its global too-big-to-fail designation. Yet the Bank of Italy wants UniCredit to hold even more capital than before. At least with over 10 bln euros of spare cash, Andrea Orcel has plenty of M&A firepower to buy his way back to the big league.
Private-asset binge exposes insurance to new risks 30 Nov 2023 US insurers hoovered up private loans from buyout firms last year in a profitable game of pass-the-parcel. Their hoard of alternative assets has swelled 65% in five years, and regulators are struggling to keep up. The March banking panic shows what can happen when firewalls fail.
LME win leaves one tricky question unanswered 29 Nov 2023 A court backed the London Metal Exchange’s decision to cancel $12 bln of nickel trades, rejecting a challenge by fund Elliott. The HKEX-owned venue has improved its standards. But the verdict does not address its conflict of being both a regulator and a commercial player.
Everybody could use a Charlie Munger 28 Nov 2023 Warren Buffett’s deputy and self-dubbed cheerful pessimist has died a month shy of his 100th birthday. He was witty, smart and a fixture at Omaha gatherings. But his chief asset, as a sounding board to the one who got fame and fortune, was also his boss’s best value investment.
Capital Calls: Barclays, Rolls-Royce 28 Nov 2023 Concise views on global finance: Initial glimpses of the $27 bln UK bank’s new plan suggest it won’t gee shares that trade at 0.4 times tangible book value; the engine-maker’s CEO has set out bold profit targets as part of its strategy overhaul.
Capital Calls: Monte dei Paschi 21 Nov 2023 Concise views on global finance: The Italian Treasury raised 920 mln euros by selling a 25% stake in the bank on the open market. So far, it looks like a better outcome for taxpayers than submitting to the onerous sale conditions offered by UniCredit in 2021.
“Ex-Japan” title may take a final bow with Goldman 21 Nov 2023 The retirement of Japan President Masanori Mochida gives the US firm the option to follow its rivals and have his successor report into the Asia CEO. After a long lull, Japan’s markets are hot. But shape-shifting foreign banks may opt to bring the country into the regional fold.
Julius Baer hit undermines private-banking premium 20 Nov 2023 The pure-play Swiss wealth manager fell 12% after a profit warning, prompted partly by sharp losses against its credit portfolio. Investors didn’t sign up for that kind of risk. The private bank’s top-tier valuation may have to shrink.
Uncle Sam cleverly goes long on short sellers 15 Nov 2023 The SEC is among the US regulators paying cash, including $279 mln in one case, not just to corporate insiders with stories to share but also investors betting against companies using public information crunched in new ways. It makes for a helpful kind of outsourcing.
Payments-app war drags banks into discomfort zone 14 Nov 2023 The US lenders behind Venmo rival Zelle, including JPMorgan and Bank of America, are now compensating victims of some online scams. They’d rather not, and technically shouldn’t have to. In the cutthroat fintech market, however, customers can be right even when they’re wrong.
Europe’s shrinking stash heralds economic trouble 14 Nov 2023 Euro zone households and companies have hoarded money since 2008 and now hold financial assets worth 63 trln euros. That cushioned the blow of higher interest rates and helped stave off a recession. But as mortgages and debts come due, growth may take a hit in 2024.
Alphabet and Robinhood split at rate fork in road 13 Nov 2023 The web search giant sold its stake in the online trading company as their shares head opposite ways. Google’s parent can thrive in a steady economy while Robinhood depends more on faster growth and high-yielding accounts. Elevated borrowing costs favor cash-generating tech.
Capital Calls: UK M&A guidelines 13 Nov 2023 Concise views on global finance: Prime Minister Rishi Sunak is now shaking up his own government’s takeover rules.
UBS faces a long wait for M&A share-price boost 7 Nov 2023 Boss Sergio Ermotti is cutting costs and shedding unwanted Credit Suisse assets. He’s even won $22 bln of new money from wealthy clients. The question is when investors will reward him with a richer valuation. Lingering legal and integration risks suggest it might take time.
For global banks, India could soon be worth it 7 Nov 2023 CEOs have descended on Hong Kong for a summit, but investment bankers based in the city are spending time elsewhere in Asia as revenue from China shrinks. In India, IPOs are on the rise and fees are improving. Buyout firms’ behaviour suggests those trends will continue.
Canary Wharf may yet avoid once-a-decade upheaval 6 Nov 2023 The main landlord of London’s key office district has tended to have a new owner every 10 years. The 300 mln pounds of equity injected by incumbents Brookfield and Qatar suggests they may buck the trend. That gives Canary Wharf scope to address its issues in a stable manner.