Sweden’s SEB chooses relevance over higher returns 13 Dec 2018 The country’s second-biggest bank by assets said costs will increase 1 bln crowns by 2021 to cover digital investment, hitting profit. Yet unlike many stodgy European lenders battling online rivals, SEB is in a better position to defend the bottom line.
Climate change on carbon is coming to Wall Street 12 Dec 2018 Extreme weather and wildfires underscore the threat of rising greenhouse-gas emissions. White House obstructionism at the global climate conference isn’t helping. But 2019 will bring more investor activism, broader funding options, better data and more realistic carbon prices.
Thiam’s bid to be boring rests on ditching traders 12 Dec 2018 The Credit Suisse boss plans to buy back shares worth 1.5 bln Swiss francs a year in 2019 and 2020. That should help the bank hit its 12 pct return target. Robust wealth management will offset lower trading revenue. The prospect of a 10 pct dividend yield also appeals.
Turkish bank smoke signal augurs pain ahead 7 Dec 2018 Akbank, the country’s fifth-largest lender by assets, has launched a rights issue to bolster capital ratios. That’s wise given the economy’s problems. Rising bad debts, higher funding costs and liability mismatches will inflict more financial pain on banks in the coming year.
Alexis Tsipras mistimes Greek pre-election gamble 7 Dec 2018 After nearly a decade of bailout-related austerity, the prime minister is promising giveaways ahead of a 2019 vote. There’s a case for spending more. But Italian jitters and the end of the European Central Bank’s bond-buying make this a bad moment to test investors’ patience.
Kier banks face spectre of HBOS-style flop 5 Dec 2018 The engineering group’s share price is near the level at which it needs to issue stock. Further falls could leave banks with shares, a rare event since the fiasco of HBOS in 2008. Brexit and government cuts don’t help. If the sector needs any more capital, it’s an ominous sign.
EU gives Mediobanca Christmas gift on Generali 5 Dec 2018 Finance ministers extended until 2024 a generous capital treatment for banks’ stakes in insurers. It allows Mediobanca, which has 13 pct of Generali, to add 100 bps to its capital ratio and delay a sale. CEO Alberto Nagel has a larger buffer to resist market jitters, or do deals.
SoftBank gives IPO investors one number to dial 30 Nov 2018 Instead of a range to help determine the price of the mobile unit’s shares, the figure has been set at 1,500 yen. That suggests fervent demand from retail buyers inspired boss Masayoshi Son to skip the typical sale process. It all but ensures an overly generous $63 bln valuation.
Toys R Us buyout firms offer crumbs for holidays 20 Nov 2018 KKR and Bain are giving $20 mln to employees who lost jobs in the retailer’s bankruptcy. That’s better than nothing, and an intriguing precedent. But it won’t go far among tens of thousands of people. It’s also a pittance compared with the fees the firms took over the years.
Julius Baer slip heralds broader pain for peers 20 Nov 2018 Choppy markets and nervous clients hit the Swiss private bank’s margin in October, putting a key target at risk. The group’s push into the more volatile Asian market didn’t help. The weak update flashes a red light to rival wealth managers, like Credit Suisse.
Private equity battens on the Asian state 15 Nov 2018 Australia’s Royal Commission, a P2P lending crackdown in China and a Korean tax overhaul were touted as opportunities at Hong Kong’s PE powwow this week. The industry usually leans on banks to find targets, but a surfeit of dry powder has it hoping governments can create deals.
Colony Capital’s village is built on shaky ground 8 Nov 2018 The $3 bln real estate firm is gambling Tom Barrack can still build. Yet the founder helped erode nearly half the group’s value with a 2016 merger. Making Middle East introductions for his pal, President Donald Trump, has been a distraction. His best investing days may be over.
Stability can help SocGen escape its value trap 8 Nov 2018 The French bank’s earnings jumped 19 percent in the third quarter, lifting its return on tangible equity to a respectable 11 percent. If boss Frederic Oudea can finally settle with U.S. regulators and minimise trading mistakes, the lender should shrug off its discount valuation.
High-frequency trader finds Virtu-ous M&A circle 7 Nov 2018 Doug Cifu’s outfit is embracing diversity by acquiring agency-brokerage and analytics shop ITG. The deal is also practically free insurance against a market downturn as cost cuts should pay for most of the $1 bln price tag. That should make Virtu Financial a fitter player.
Goldman plays at VIP commodity theory 7 Nov 2018 The Wall Street bank elevated a measly 69 staff to partner level, even though its workforce and earnings are growing. Making the coveted title scarcer is intended to give staff a nudge. Ensuring it’s more accessible to people Goldman could use more of should be equally important.
China Renaissance buyback aggravates IPO botch 7 Nov 2018 Roughly a month after a pared-down listing, the $1.3 bln investment bank and boss Fan Bao are buying a chunk of stock on the market. Companies globally are splurging on shares, and the gambit has improved prices a little. Investors and clients, though, will need more substance.
Intesa’s gold star now comes with ECB glitter 6 Nov 2018 Italy’s biggest lender by value’s nine-month net profit is its best since 2008, despite a domestic bonds selloff. Solvency is also higher than required by Intesa’s Frankfurt regulator even after a stress test. That makes it the only Italian commercial bank with dividend headroom.
Macquarie widens gap at home and abroad 2 Nov 2018 The $28 bln Aussie bank is set for a record year, thanks to a first-half lift from commodities. Return on equity stands apart and local lenders are under intense scrutiny. New boss Shemara Wikramanayake will need to keep up the impressive resilience in far choppier markets.
Henry Kravis joins gaming value “emote routine” 29 Oct 2018 The billionaire’s private-equity firm is investing in the company behind the Fortnite craze at a $15 bln valuation. Epic has shown free games can be lucrative. But the deal clocks in at what seems an over-enthusiastic price. It’s a bet Epic can stay ahead of teenage fads.
HSBC leans on rate rises to ease trade tensions 29 Oct 2018 The Asia-focused bank reported a 28 percent increase in quarterly pre-tax profit despite tariffs starting to squeeze some clients. Fortunately for boss John Flint, Fed policy is moving in HSBC’s favour. If it continues, his double-digit profitability target should be in reach.