Santander puts relationships first with Orcel hire 25 Sep 2018 The Spanish financial giant has appointed UBS investment banking head Andrea Orcel as its new CEO. The Italian is a long-time adviser but has no experience of running a retail lender. That matters less than his rapport with Executive Chair Ana Botin, who remains firmly in charge.
Another big deal is last thing Invesco needs 24 Sep 2018 The Atlanta-based investment manager may buy the Oppenheimer mutual fund house for $5 billion. Yet Invesco’s revenue and operating profit have stalled despite several acquisitions, including Guggenheim’s ETF business. More scale won’t alleviate the downward pressure on fees.
Jefferies faces half-a-million-dollar question 21 Sep 2018 That’s what the average employee of the Wall Street firm earns – some 25 pct more than peers at Goldman Sachs. Jefferies hands staff a higher portion of its revenue, yet has paltry returns. After a restructuring of its listed parent the gap is more prominent, and unsustainable.
Merrill Lynch deal a qualified success for BofA 20 Sep 2018 The bank bought the Thundering Herd in a hurry in the depths of the 2008 crisis. Merrill’s retail brokerage has worked out well. But the M&A and equity franchises have faded under the BofA brand. The unit’s new boss, Matthew Koder, would need something special to change that.
China investors coming to terms with changed world 14 Sep 2018 The tone at this year’s CLSA powwow in Hong Kong was notably reserved as attendees wrestled with trade tensions, a cooling economy and the 20 pct fall in Shanghai stocks. General pessimism seems overdone, but the Asia-focused financial community senses a new normal taking hold.
Goldman Sachs trades diversity for diversification 13 Sep 2018 A reshuffle by boss-to-be David Solomon puts investment bankers in the three top jobs. It also shifts one of Wall Street’s few openly gay senior executives to a less visible role. But it also reflects Goldman’s changing earnings mix, and Solomon’s intent to make it more balanced.
The Exchange: Greg Fleming 13 Sep 2018 On the day Lehman Brothers went belly-up, Merrill Lynch sold itself to Bank of America. As president of the “Thundering Herd,” Fleming was the architect of that transaction. In conversation with Rob Cox, he defends the deal, reminisces on the crisis and discusses his new venture.
Cox: Why we remember the 2008 financial crisis 6 Sep 2018 Over the coming weeks, Breakingviews will publish numerous columns and a podcast series with politicos, regulators and bankers involved in resolving the mess 10 years ago. The reason is simple: When people forget what went awry, they risk repeating the errors of the past.
Prem Watsa’s Africa punt may avoid Greek tragedy 5 Sep 2018 The Canadian investor owns 41 pct of African bank Atlas Mara. Given Bob Diamond’s outfit just made a half-year operating loss, the risk is a re-run of Watsa’s awry Greek bank bet. Still, stabilising commodity prices means there’s more chance Watsa has bought in at the bottom.
Pimco finds finance role robots can’t yet play 5 Sep 2018 John Studzinski, a Blackstone consigliere and consummate networker, is joining the bond fund manager to help woo rich and powerful investors. Pimco, like its rivals, is investing in big data and machine learning, but hiring “Studs” shows the high-touch stuff still matters too.
Hadas: The paradox of risk-free finance 5 Sep 2018 A new study claims that national deposit insurance makes financial crises more likely. It may exaggerate, but guarantees are a sign of a basic problem in banking. The mix of public service and private risk is always potentially toxic. Separation would be hard but worthwhile.
HSBC downgrades rainmakers to a nice-to-have 23 Aug 2018 The departure of a senior UK advisory banker underscores the lender’s lowly status among global investment banks. Year-to-date M&A fees are broadly half what they were in 2015. But a focus on trade-related income means boss John Flint needn’t chase pricey dealmakers.
UniCredit’s valuation gap looks too wide 7 Aug 2018 Italy’s biggest bank by assets has been a perennial slowcoach compared to Intesa Sanpaolo. But its return on tangible equity warrants a valuation closer to that of its main rival. Especially as a broad European base can offset a slowing Italian economy and jittery markets.
Commerzbank M&A pressure respite is only temporary 7 Aug 2018 The German lender reported a 689 million euro first-half pre-tax profit, compared to a loss in 2017. Higher revenue from smaller businesses should help it reinstate payouts. Still, a modest 6 percent return target means a merger with Deutsche Bank still makes long-term sense.
SoftBank is the disruptor of technology disruptors 3 Aug 2018 Masayoshi Son’s investment mammoth is wreaking havoc across Silicon Valley and beyond. The $100 bln Vision Fund makes traditional venture-capital funds look puny, gives startups unimagined firepower, and distorts valuations and IPO markets. Tech finance can scarcely keep up.
RBS takes final step to being a cut-price Lloyds 3 Aug 2018 Royal Bank of Scotland has announced its first dividend since 2007, despite a paltry 1.1 percent return in the second quarter. Excluding one-off fines, the show of strength is credible. Lower core costs and impairments should close the valuation gap with Lloyds Banking Group.
Italian banks face worsening doom loop 3 Aug 2018 Rising sovereign yields since a radical government’s arrival hit capital buffers at Monte dei Paschi and peers. Weaker banks will hurt growth, feeding fears over Italy’s debt. More storms loom as the economy stutters, and the executive’s anti-business attitude spooks investors.
Barclays can close value gap quicker than SocGen 2 Aug 2018 The UK and French banks trade at a 25 percent discount to book, yet both are making returns above 11 pct. That implies Barclays and SocGen deserve more investor love. With a second quarter less obscured by one-off charges, Barclays deserves to close its gap more quickly.
Activists finagle deal in toppy real-estate market 31 Jul 2018 Brookfield is buying Forest City, owner of a hodge-podge of assets including the New York Times building, for $11.4 bln. The 27 pct premium allows Starboard to exit with a profit. Rising rates and other heady markers mean the deal may signal a peak in property values, too.
Credit Suisse returns can vault flatfooted traders 31 Jul 2018 The Swiss bank saw earnings double in the second quarter thanks to its wealth management unit. A weak investment bank means the group is less profitable than rival UBS. But lower costs should allow boss Tidjane Thiam to achieve his 10 percent return benchmark next year anyway.