Investment Banking

Credit Suisse rescue sends shockwaves far and wide

23 Mar 2023

The ailing Swiss lender was saved by UBS with a $3 bln takeover. In this Viewsroom podcast, Breakingviews columnists debate why the deal pushes up bank funding costs, how the new mega-lender affects Switzerland’s financial system, and why bank deposits are becoming less reliable.

Swiss CoCo shakeout may yet help bank regulators

22 Mar 2023

The market for quasi-equity bonds is reeling after Credit Suisse wiped out its own ones. The higher cost of issuing the securities means banks may now roll over their maturing debt, rather than replace it as per the market norm. That could actually help financial stability.

Bank woes expose gaps in EU safety net

22 Mar 2023

As the US and Switzerland scramble to head off contagion, the European Union is watching from a shaky perch. While the euro zone probably could fend off a new banking crisis, it lacks some tools for doing so. Even a backstop for insuring retail deposits remains out of reach.

Saudi is far from the last Western bank bagholder

21 Mar 2023

Credit Suisse’s rescue by UBS will cost top shareholder Saudi National Bank over $1 bln. Abu Dhabi’s ADIA and Singapore’s GIC and Temasek also caught a falling knife after buying Western banks in 2007. Politics, and the Gulf’s growing oil riches, imply further loss-making punts.

Switzerland takes CoCos to point of non-viability

20 Mar 2023

Holders of Credit Suisse’s $17 bln of contingent capital will lose the lot despite UBS paying $3 bln for its rival’s shares. The bonds boomed after the last crisis, but uncertain conditions make them riskier than bank equity. If investors flee, they’ll be less useful for banks.

UBS salvages most value from Credit Suisse wreck

19 Mar 2023

The Swiss bank is scooping up its ailing arch-rival for just $3.2 bln in a state-arranged rescue. In return for shoring up confidence it gets a balance sheet backstop, a competition waiver, big savings and a giant capital boost. It also becomes bigger and more systemic than ever.

Startups lost a wheel greaser with SVB blowup

17 Mar 2023

Venture capital funding was drying up before the collapse of Silicon Valley Bank. But SVB offered loans to new companies and played an important role bridging capital calls between VC managers and investors. Even with one fewer player, the industry gets rustier.

Credit Suisse puts new dent in Swiss bank armour

17 Mar 2023

The Alpine country’s solidity is its main selling point for wealthy clients. Yet for the second time in 15 years, authorities have rushed to halt a spiralling crisis of trust at a big Zurich lender. Shoring up the Swiss financial system will only partly repair the damage.

Credit Suisse’s cash line is just a stopgap

16 Mar 2023

The lender will borrow up to $54 bln from the Swiss National Bank to boost liquidity. The move reassured investors, but won’t necessarily stop clients pulling money. Regulators and the government will need a more permanent solution, but none of them are particularly appealing.

Goldman’s new strategy gets baptism of fire

15 Mar 2023

Its traders bought bonds from SVB as its bankers tried to help plug the hole that was left. Colleagues in investment may now be able to pick up troubled assets in the wreckage. It’s true to boss David Solomon’s One Goldman vision, though ideally the client lives to tell the tale.

European banks priced for profit dip, not crisis

14 Mar 2023

Lenders’ shares have plunged since Silicon Valley Bank failed, but only to January’s levels. Senior bankers like Lloyds CEO Charlie Nunn see no evidence of a US-style deposit rush in Britain. For investors, the fear is that interest rates don’t rise as far, crimping returns.

Big bank selloff rests on tiny kernel of truth

10 Mar 2023

Shares in JPMorgan, HSBC and others dropped after Silicon Valley Bank raised equity to cover losses on bond sales. That’s not going to happen to large players with more reliable funding. But it’s a reminder that rising interest rates bring risks as well as rewards for lenders.

Credit Suisse blunders undermine CEO’s repair job

9 Mar 2023

The bank’s shares fell 5% after a call from US regulators stopped it from publishing its 2022 annual report. The watchdog’s accounting questions seem minor and predate boss Ulrich Körner. But the constant bugs impede his quest to win back lost confidence and wealth assets.

Capital Calls: TD Bank’s $13 bln cliffhanger

2 Mar 2023

Concise views on global finance: The Canadian bank’s acquisition of U.S. peer First Horizon will be delayed beyond its May 27 drop-dead date, but there are reasons to think it will still get done.

Banks’ state shareholders can afford slow selldown

2 Mar 2023

The Belgian and Dutch governments took advantage of a market rally to offload chunks of BNP and ABN. Valuations have risen but are still low relative to lenders’ returns. That means Britain and Germany would be wise to move gradually with their NatWest and Commerzbank holdings.

Goldman doubles down on the wealthy, as it should

28 Feb 2023

The $120 bln bank is boosting its alternative-investment unit, which may soon be half the size of Blackstone. Add in banking and shareholders effectively get the rest for free. It highlights the upside for Goldman’s value, and makes CEO David Solomon’s consumer push look worse.

Santander’s new plan is a make-or-breakup moment

28 Feb 2023

Chair Ana Botín wants to forge deeper links between the disparate bits of her 60-bln-euro bank, including by using common IT systems. If it works, and higher returns follow, the bank should trade at more than the sum of its parts. If not, it will be hard to resist selling assets.

Capital Calls: Monte dei Paschi, Abrdn

28 Feb 2023

Concise views on global finance: Insurer AXA is selling shares in the Italian bank just four months after joining a risky capital increase; meanwhile, the UK asset management group run by Stephen Bird is still shrinking.

Revisiting JPMorgan’s innovative Cazenove deal

24 Feb 2023

The American giant’s 2004 joint venture with the venerable UK stockbroker is often cited as a rare example of a successful investment banking takeover. A new memoir by former CEO Robert Pickering confirms Cazenove was right to sell. Less clear is whether JPMorgan needed to buy.

Capital Calls: Starbucks

21 Feb 2023

Concise views on global finance: The $123 billion coffee chain’s new patent filing speaks to popular TikTok campaigns for more bespoke beverages – and other labor challenges.