Capital Calls: Airbnb, Prudential, Glencore 25 May 2022 Concise views on global finance: The $68 bln vacation-booking platform will shut its Chinese business; the insurer appoints a new CEO – finally; the commodities giant has a $10 bln reason to keep its nose clean, after a $1.5 bln settlement for corruption allegations.
BoE pours cold water on bank global-warming panic 24 May 2022 The watchdog’s stress test showed UK lenders can weather a chaotic climate switch without a capital hit. For bank CEOs copping flak for funding polluters, it’s a let-off. The other lesson is that governments will get little help from financial regulators in greening the economy.
Capital Calls: Turkey, Nintendo/Sony, India IPO 10 May 2022 Concise views on global finance: President Erdogan makes another ham-fisted monetary intervention; the Switch maker weathers supply chain ructions better than its larger rival; New Delhi needs to be even more generous in its landmark listing of Life Insurance Corp of India.
HSBC breakup, Big Oil’s surprise restraint 5 May 2022 The $129 bln bank is under pressure from its largest shareholder to spin off its Asian unit. In this Viewsroom podcast, Breakingviews columnists discuss why the plan deserves short shrift. Also, the decision by oil giants to limit production will win few friends.
Italy’s financial order repels attack on Generali 29 Apr 2022 Mediobanca-backed CEO Philippe Donnet overcame opposition from investors with 30% of the $30 bln insurer to win a third term. That preserves a key financial link with the merchant bank. Donnet now has to deliver on his growth plan. The rebel investors will keep him on his toes.
Capital Calls: U.S. GDP fall masks solid economy 28 Apr 2022 Concise views on global finance: Consumer spending and business investment are resilient amid price hikes.
SocGen avoids the worst in costly Russian exit 11 Apr 2022 The French bank is selling Rosbank back to the oligarch it bought the unit from 16 years ago. Despite a 3 bln euro writeoff, the hit to its capital ratio is less than half the worst-case scenario it outlined last month. It’s a fitting end to a long and unhappy Russian story.
Generali investors better off with devil they know 30 Mar 2022 A rebel billionaire is vying for control of the 190-year-old insurer, a linchpin of Italian finance. Francesco Caltagirone promises higher returns and bolder M&A than under CEO Philippe Donnet. Fuzzy targets and slowing growth should make shareholders wary of switching horses.
UnitedHealth plays long game with M&A strategy 29 Mar 2022 A month after watchdogs sued to block a deal by the insurer, it agreed to buy home healthcare firm LHC for $5.4 bln. Both deals may mean UnitedHealth is bogged down in a delayed deal process. But adding LHC to UnitedHealth’s doctors, clinics and other units is worth the hassle.
AIG life IPO marks 5,000 days of post-crisis slog 29 Mar 2022 That’s how long it took to fix the global insurer after its 2008 bailout. It has now reached a point where, with a little help from Blackstone and even BlackRock, it can float its life and retirement business, probably worth at least $22 bln. It’s a key moment in AIG’s reboot.
Buffett does $11.6 bln mini-me deal because he can 21 Mar 2022 Insurance firm Alleghany is built in Berkshire’s likeness, with cultural similarities and a focus on growing book value. The difference: Alleghany is cheaper, even with a 25% premium. Closeness to the Omaha Sage may have clinched the deal; it also may explain the ho-hum price.
Climate change hands states an insurance dilemma 1 Mar 2022 Severe weather caused $343 bln worth of damage last year, and prompted insurers to either drive up premiums or cease home coverage altogether. States can avoid creating insurance black spots by taking over from the likes of Zurich. The catch is they may not be very good at it.
Capital Calls: Block avoids round hole 25 Feb 2022 Concise views on global finance: The former Square, run by Jack Dorsey, gained 20% in value after fourth-quarter numbers showed its core Cash App business still growing. Making the most of the $29 bln Afterpay acquisition is a key challenge for 2022.
UK insurers’ Brexit bonus carries hidden charges 22 Feb 2022 PM Boris Johnson wants to unleash an investment boom by slashing red tape for the sector. In theory, his plans could free up nearly $130 billion for green-energy projects. But regulators may impose other rules. And any added risk means insurers like L&G and Aviva raising prices.
Allianz’s U.S. fund misery is only half over 18 Feb 2022 Europe’s largest insurer has set aside $4.2 bln to compensate savers for complex derivative bets that went wrong. The figure, less than the $6 bln claimed, looks positive for shareholders. But with so much extra cash, U.S. regulators may impose a heftier fine to even things out.
Viewsroom: Ukraine, ECB and India’s giant insurer 17 Feb 2022 Worries about an invasion of Ukraine have rattled markets, but Dasha Afanasieva says Russian investors are more sanguine. The European Central Bank faces a tougher inflation juggling act, argues Swaha Pattanaik. And Una Galani discusses the listing of India’s Life Insurance Corp.
India’s crown jewel IPO deserves healthy discount 14 Feb 2022 The eagerly awaited prospectus for insurer LIC reveals underwhelming growth and profitability. Those can be improved, but its role as New Delhi’s firefighter is a big wildcard. Adviser Citi has a tricky task coordinating the price, and investors should err on the side of caution.
Pru CEO change puts HSBC and StanChart on the spot 10 Feb 2022 Mike Wells is retiring after shaking up the $46 bln insurer and redirecting its focus to emerging markets. Whoever replaces him will be based in Asia instead of London. Where the top brass sit depends on many variables, but the job is harder to do far from the main hub.
Mediobanca’s fortunes are tied to Generali 9 Feb 2022 The bank’s 13% stake in the Italian insurer accounts for a third of its net profit. Mediobanca could sell the 3.8 bln euro shareholding to finance deals, but targets are expensive. Even if CEO Alberto Nagel loses a boardroom battle at Generali, his financial future rests on it.
India’s rush to list LIC is a mistake in making 4 Feb 2022 New Delhi wants to secure proceeds from the insurer’s IPO by the end of the fiscal year. That’s less than two months away and there’s no draft prospectus yet for a company with $500 bln of assets to review. Rising risks include mispriced shares or scaring off overseas investors.