Citi’s new targets half hit the mark 2 Mar 2022 CEO Jane Fraser thinks the gaffe-prone U.S. bank can clean up and deliver a 12% return on tangible equity. It’s less ambitious than Wall Street peers, but Citi’s challenges are bigger. To the extent it relies on growth rather than self-help, investors are justifiably skeptical.
Vladimir Putin tests even Wall Street’s values 2 Mar 2022 American banks like Goldman have earned nearly $500 mln in investment banking fees since Russia annexed Crimea in 2014. They're not known for taking principled stands when money is at stake. With even oil giants responding to Putin's aggression, though, this could be the moment.
Viewsroom: Russia and Ukraine, Credit Suisse woes 24 Feb 2022 As President Vladimir Putin launches the biggest attack on a European state since World War Two and the West prepares its response, Dasha Afanasieva and Gina Chon discuss what comes next. And Liam Proud explains how an embarrassing data leak is the Swiss bank’s latest headache.
Goldman reminds top dogs it can do what it wants 23 Feb 2022 The Wall Street firm may confiscate stock issued to a banker who left to start a business for Walmart. Goldman has historically gone easy on employees who join big clients. But competitors are proliferating, and boss David Solomon needs a firm hand to deal with new rivals.
HSBC would be unwise to fall back on the Fed 22 Feb 2022 Boss Noel Quinn reckons his mega-bank will hit its 10% return target a year early if interest rates rise as markets expect. Tighter monetary policy brings its own risks, however, and Hong Kong presents fresh problems. More self-help, including on sticky expenses, would be wise.
Goldman Sachs ups ante in banking game of thrones 17 Feb 2022 CEO David Solomon boosted his main shareholder return target. If the market gives the Wall Street firm credit, it might narrow a valuation gap with chief rival Morgan Stanley. But both are counting on the rift between haves and have-nots, on Wall Street and beyond, growing wider.
Citi’s Jane Fraser embodies Wall Street’s pay gap 15 Feb 2022 The new CEO’s $22.5 mln package lags jumbo sums awarded to JPMorgan’s Jamie Dimon and Goldman Sachs’ David Solomon. Citi hasn’t been a great investment. But overemphasizing past returns could leave Citi the worst of both worlds: A troubled bank with a boss in need of motivation.
Credit Suisse self-flagellation is risky but right 10 Feb 2022 The Swiss bank lagged rivals as revenue fell 12% in the fourth quarter. That’s partly because CEO Thomas Gottstein is putting safety first. The danger is that clients flee and star bankers defect after bonuses shrank by 32%. Yet avoiding future mistakes is the top priority.
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.
BNP Paribas’ growth push merits investor jitters 8 Feb 2022 The 81 bln euro bank wants to boost revenue to help hit an 11% return target. But CEO Jean-Laurent Bonnafé’s plan hinges on uncertain investments and buoyant markets, while a cut-price valuation betrays shareholder doubts. Deeper cost cuts would make his goals more credible.
Lazard bets it can continue to be different 3 Feb 2022 The advisory firm’s shares have underperformed Wall Street peers recently and through past cycles. It has still found ways to attract and retain talent. Yet competition for rainmakers is mounting. If stock appreciation isn’t a lure, Ken Jacobs’ firm may have to pay in other ways.
The Exchange: UniCredit’s Andrea Orcel 3 Feb 2022 The Italian banker wants to return 16 bln euros to investors by 2024. Choppy markets and growing geopolitical risks raise the bar for European banks’ promised returns. UniCredit CEO Andrea Orcel tells Breakingviews how his $35 bln lender can navigate through uncertain times.
UBS’ Morgan Stanley impression could use more work 1 Feb 2022 CEO Ralph Hamers’ job is to get a valuation closer to the U.S. group’s 2.5 times tangible book value multiple, compared with his $68 billion bank’s 1.2. New buybacks help, but the missing ingredient is growth. Investors are understandably sceptical that Hamers can change that.
Nomura’s better numbers still need a new narrative 1 Feb 2022 The Japanese bank posted quarterly net profit of $525 mln, helped by the absence of hefty provisions for the first time since March. Boss Kentaro Okuda has been pushing into private markets and steadier earnings streams. But weak shares suggest he has work still to do.
Capital Calls: Netflix, Google-India 28 Jan 2022 Concise views on global finance: Netflix hints at deals by flagging the risks associated with potential acquisitions; Google’s $700 million investment in Bharti Airtel also reflects on Reliance.
SoftBank No.2 exit shows bad timing all round 28 Jan 2022 Marcelo Claure overhauled both Sprint and WeWork for the $70 bln conglomerate. His departure was at least partly about money, per media reports. Expecting a bumper payout as shares halved looks a poor move. But SoftBank is losing a key player just when steady hands are needed.
Deutsche CEO’s cost-cut ordeal is far from over 27 Jan 2022 Christian Sewing has hacked 2 bln euros of expenses since 2019, and the lender is finally paying a dividend again. Yet even if Sewing manages to hit his profit goals, his ambitions look subpar. The domestic retail and private banking units are prime candidates for further axing.
Citi picks odd time for a Mexican standoff 26 Jan 2022 The U.S. banking giant’s plan to divest $44 bln of assets under its Banamex banner has long been on investors’ wish lists. But in finding a buyer, Citi will have to navigate Mexico’s protectionist streak, and the fact that cross-border banking has fallen out of fashion.
Credit Suisse shock holds warning for new strategy 25 Jan 2022 The $20 bln bank, whose Chair António Horta-Osório just quit after nine months, took more legal charges and expects a slowdown in trading and wealth management. Investors can look past old litigation. But sluggish revenue raises doubts over how it can grow while slashing risk.
Jamie Dimon’s pay is fair, but only if you’re him 21 Jan 2022 The JPMorgan boss was awarded $34.5 mln for 2021, a 10% increase, on top of an extra bonus last summer worth perhaps $50 mln. Much of it is deferred, and CEOs value future payoffs differently from mere mortals. Boards are often hostages to that mindset.