Macquarie hits limits of diversification 6 Nov 2020 The $34 bln Aussie financial conglomerate suffered a 32% fall in half-year net profit as its investment bank generated a rare loss. Boss Shemara Wikramanayake likes to trumpet the array of revenue sources, but even done well, the business model provides only so much of a buffer.
Cuccia’s heir deserves longer reign at Mediobanca 27 Oct 2020 The Milan bank that called the shots in Italian industry has successfully transitioned from power-brokering to profitability under CEO Alberto Nagel. A new pushy shareholder, Leonardo Del Vecchio, and more competition from Intesa will keep him on his toes, where he should be.
Jes Staley’s Barclays strategy will go stale 23 Oct 2020 The CEO’s decision to keep a big trading unit has helped the $25 bln group in 2020. That’s a minor win given a fading market boom and the lender’s low valuation. As the board plans for Staley’s eventual exit, a candidate willing to cut investment banking would be the best choice.
Goldman fines are literally cost of doing business 22 Oct 2020 The Wall Street firm is drawing a line under the 1MDB scandal. A U.S. settlement worth under $3 bln looks trifling, but years of bad behavior cost it far more. The bank spent more on legal woes since 2012 than on rent or technology. Like those expenses, penalties are inevitable.
New UBS CEO faces a cost-cutting odyssey 20 Oct 2020 Ralph Hamers takes over a $44 billion bank with slim growth prospects and high expenses. With the easy savings already found, he’ll have to get creative. That means shedding subscale units, further shrinking investment banking, replacing bankers with robots, and potentially M&A.
Morgan Stanley dares to share with bankers’ pay 15 Oct 2020 As trading and deals revenue soared 24%, the sum earmarked for pay so far this year shot up 26%. Coughing up big bonuses in a pandemic is a perk of not being a giant retail bank. And when it comes to boss James Gorman’s rewards, Morgan Stanley looks comparatively restrained.
CICC seeks edge in increasingly cutthroat market 15 Oct 2020 The investment bank leading Ant’s IPO is planning a $1 bln secondary listing in Shanghai. It could fund mergers as officials push industry consolidation and help fend off Wall Street rivals. Local peers are also angling for super-broker status, making more capital essential.
SPACs are one good scrub away from respectability 5 Oct 2020 Blank check companies have many qualities of an investment mania. There’s even an ETF that lets everyday investors take a punt on these complex, insider-friendly acquisition vehicles. With a cleanup, though, they could shed their shady image. The IPO world could use disruption.
Peltz puts the squeeze on middle-weight money men 2 Oct 2020 The activist’s fund Trian has taken big stakes in investment firms Invesco and Janus and wants to roll them up. Taking on powerhouses like BlackRock requires industry consolidation as low rates and fee pressure bite. Peltz may also benefit from good old-fashioned market timing.
2020 is ideal year to hide Wall St trading scams 30 Sep 2020 JPMorgan is paying a $920 mln fine and admitting its traders manipulated metals and Treasury markets. It’s the latest of a long list of industry wrongdoing. Online chats helped snare the perpetrators. Remote work means there are more ways to conceal such shenanigans.
Jefferies makes itself the envy of Wall Street 24 Sep 2020 The U.S. investment bank is hiking pay by 26% after a record quarter. Larger rivals like Goldman Sachs and JPMorgan will find that generosity hard to copy: Investors and regulators are unlikely to smile upon big bonuses, even if their traders think themselves just as deserving.
Goldman M&A moves suggest times aren’t a-changing 21 Sep 2020 Despite CEO Solomon’s goal of banking companies with diverse boards, his new crop of M&A heads and chairmen is predictably white and male. Goldman may want to be an agent of change, but making a break with the past is hard – especially when the M&A top spot is Solomon’s to lose.
Viewsroom: Credit-UBS, Bernard Arnault and Japan 17 Sep 2020 A merger of Credit Suisse and UBS has some merits on paper, but would be bloody in practice, says Liam Proud. Plus, the LVMH billionaire’s impeccably ruthless dealmaking is on full display with the Tiffany takeover. Pete Sweeney and Sharon Lam discuss Japan’s new man at the helm.
UBS-Credit Suisse deal would be too clever by half 16 Sep 2020 The former’s Chairman Axel Weber may be mulling a merger with his Swiss rival. The banks’ similarities mean annual savings could exceed $3 bln. Yet capital buffers may rise and wealth clients flee. Closer cooperation on asset management and investment banking makes more sense.
Sewage keeps Parisian banking elite in Hermès ties 15 Sep 2020 Veolia’s hostile approach to rival Suez is providing utility-like returns to some 16 banks and M&A boutiques. Not bad for a 2.9 bln euro bid. But as private equity eyes a potential entrée, the fees may add up to more than wastewater and put an end to a pandemic-induced drought.
Big Tech eases Ant’s march into public markets 15 Sep 2020 A long who’s who list, including Thailand’s richest man and China’s national pension fund, stand to clean up from Jack Ma’s fintech titan. Not long ago, a $200 bln IPO might have made public investors look like suckers. This number is less scary thanks to Apple and others.
Citi’s new CEO can lead on ESG if not returns 10 Sep 2020 Jane Fraser is to be the first woman to run a major U.S. bank, with Mike Corbat retiring rather than becoming chairman. That scores big on social and governance issues. And Citi has been ramping up its climate commitments, too. But its long-term returns drag still needs a boost.
India is staring at debt-crisis déjà vu 10 Sep 2020 The central bank has sanctioned a loan rejig. With tight guidelines, it aims to avoid a re-run of the past decade’s banking woes. But the plan gives discretion to lenders that hid problems before. India was turning a corner on credit quality, now it’s almost back to square one.
What is Ant really worth? 9 Sep 2020 Key to the Chinese fintech giant’s success is its cut from lining up credit, insurance and wealth customers. Rivals could eat into those take rates and regulators loom large. For now, though, a Breakingviews calculator suggests a reasonable starting point would be about $275 bln.
Ant’s valuation hill 9 Sep 2020 The Chinese fintech giant could raise up to $30 bln in what would be the world's largest IPO. Its value is largely predicated on fees for matching customers to financial services providers. At current rates, $275 bln is possible, but even small changes could make a big difference.