Viewsroom: Jack Dorsey’s heroic year ahead 19 Dec 2019 From banning political ads to developing cryptocurrency plans, the CEO of Twitter and Square has been politically more astute than rivals like Facebook. That sets him up for a good 2020. Also: the different ways that shareholders, the Fed and M&A bankers will tackle climate risk.
Goldman set for show of guilt without tears 19 Dec 2019 The Wall Street firm may pay $2 bln for its role in the 1MDB bribery scandal and offer a rare admission of wrongdoing. Neither fine nor mea culpa would carry much sting. As often happens in the cat-and-mouse game of enforcement, the end result looks half-baked.
M&A bankers will turn climate risk into clients 19 Dec 2019 The financial impact of global warming is one of the biggest strategic issues CEOs face, yet it plays a small role in dealmaking. That might change in 2020 as shifting regulation and consumer habits start to affect the bottom line, giving climate-conscious advisers an edge.
Goldman shows world leaders live in wrong climate 16 Dec 2019 The Wall Street firm is targeting $750 bln of sustainable finance over the next decade, even as politicians dither. It’s a fluffy goal. Yet it shows the hard-nosed Goldman sees money to be made from sustainable investment. Its long-term-greedy mantra fits climate change neatly.
Nomura aims for more sustainable Wall Street role 11 Dec 2019 Japan’s biggest brokerage has tried for decades to build an enduring U.S. investment bank. Its latest attempt involves buying renewable-energy boutique Greentech Capital. It’s a small but focused deal in a growing market. That should increase the odds of Nomura making it work.
Brazil’s $15 bln brokerage IPO is so retro 11 Dec 2019 Upstart XP is the year’s fourth-largest U.S. listing. It can still charge real fees in its cozy market, just like U.S. brokers in the good old days. Falling rates should keep new customers coming. And Brazil looks less prone to the competitive havoc that beset American peers.
Nomura takes the easiest road with new CEO 2 Dec 2019 Koji Nagai performed poorly as boss and will now become chairman, a shareholder-unfriendly tradition in corporate Japan. Successor Kentaro Okuda’s time running the Americas unit supports the bank’s global goals. But a veteran pick is unlikely to bring fast fixes to bigger issues.
Natixis does more of the wrong type of innovation 27 Nov 2019 The Paris-based lender has taken a lead in lowering risk-weights to spur green lending. That’s diverted attention from past trading goofs. The suspension of a senior trader on procedural grounds will not help the regulator see it as a solver rather than a creator of problems.
Merger Monday is cold comfort in longer M&A slump 26 Nov 2019 Deals from LVMH, Novartis, Charles Schwab and peers added up to an impressive-looking $70 bln. Yet 2019 transactions volumes are lower than last year, despite record stock markets, and M&A valuations are falling. Trade wars and growth fears have to ease for a sustained pickup.
Saudi bankers’ sweat will lubricate Aramco IPO 20 Nov 2019 The kingdom’s lenders are extending credit to domestic investors buying into the oil giant’s $25 billion float. That means locals could face hefty margin calls if Aramco shares slump. Bankers’ best sedative is that Riyadh has very strong incentives to prop up the price.
HSBC markets boss exit presages U.S. and EU pain 20 Nov 2019 Investment-bank head Samir Assaf may be replaced as part of interim CEO Noel Quinn’s shakeup. His division’s consistent 10%-11% return on equity has been solid if unremarkable, and hides weaker U.S. and European units. Cost cuts should fall most heavily in those regions.
Mediobanca chief’s best defence is to run faster 12 Nov 2019 The $10 bln Italian bank has outperformed peers and its balance sheet is clean. That justifies CEO Alberto Nagel’s past push into private and consumer banking. Now he’s promising big dividends and M&A. He needs it to ward off criticism from top investor Leonardo Del Vecchio.
Goldman Sachs demonstrates tyranny of targets 11 Nov 2019 A goal of generating $5 bln of new revenue at the $79 bln firm sounded great two years ago, but makes little sense when the top line reflects market gyrations. Targets have their place, but if they’re hard to verify and don’t obviously benefit shareholders, they need a rethink.
New Credit Suisse investment-bank chief needs axe 11 Nov 2019 David Miller is taking over from James Amine, who helped run the unit for a decade. His top priority is to stop losing market share in key businesses like advising on deals. However, costs also look high, despite recent restructuring. There’s an argument for more cuts.
SoftBank’s mea culpa may be too little, too late 6 Nov 2019 The group posted a $5 bln writedown on WeWork and others. Poor judgement on valuations has led to poor performance. Meanwhile, concerns about SoftBank’s own accounting wizardry, and more, remain. Boss Masayoshi Son has much to do to restore his reputation as a visionary investor.
Macquarie shape-shifts into lucrative green niche 1 Nov 2019 The $30 bln Aussie bank is good at morphing to stay ahead. Commodities hedging helped lift first-half earnings. Its next phase is a bet on renewables. With fewer constraints than rivals, Macquarie is well-placed to go green. New projects may be shorter-term though, and riskier.
Sickly EU peers give Barclays’ Staley a leg-up 25 Oct 2019 The UK bank reported a 10% return on equity in the third quarter, excluding one-off costs, helped by its investment bank. Traders at the $37 bln lender broadly underperformed Wall Street competitors, but boss Jes Staley can at least grab market from sickly European rivals.
Buyout giants get an IPO warning from Down Under 24 Oct 2019 Bain, KKR and TPG have all pulled Aussie listings this month. With the local bourse just off historic highs and new entrants doing well, the finger of blame is starting to point at private equity. Friendlier terms and healthier balance sheets are needed to keep the exits open.
Lazard fracas exposes overhyped French M&A market 23 Oct 2019 The departure of rainmaker Matthieu Pigasse highlights the frenzied pursuit of Parisian corporate financiers. Yet despite its strong local position, French clients bring in just a tenth of the firm’s global advisory revenue. American rivals could expand more profitably elsewhere.
UBS gets mugged by hard market reality 22 Oct 2019 Weak trading revenues pushed third-quarter pre-tax profit down by 21% at the $45 bln Swiss bank. The company is struggling to adjust to a tough environment. Expenses came in at a high 80% of revenue. CEO Sergio Ermotti’s 2021 cost-reduction targets suddenly look fanciful.