RBS is a step away from ending its lost decade 23 Feb 2018 The state-owned UK lender made its first after-tax profit in 10 years. A 4 pct rise in revenue and falling costs moves boss Ross McEwan closer to his return on tangible equity target. Settling U.S. charges over mortgage securities is the last hurdle to restarting dividends.
Barclays throws money at its many problems 22 Feb 2018 The UK bank’s boss Jes Staley has pledged to double payouts this year to boost shares trading at 0.7 times book. Yet Barclays needs to reverse falling revenue to meet a 9 percent return on tangible equity target by 2019. Even then, regulatory risks linger in the background.
Too-big-to-fail rules are too sound to scrap 21 Feb 2018 A long-awaited U.S. report on resolving big financial institutions recommends beefing up the bankruptcy code while keeping the door open to government intervention in emergencies. It’s possible to quibble with the details, but the big-picture proposals strike a sensible balance.
Thrift can steer Lloyds to profitable banality 21 Feb 2018 The UK lender wants to be simple and safe. Boss António Horta-Osório’s new plan needs conduct charges, which grew by a fifth last year, to abate, and the economy to behave. Still, even if revenues stay flat, earnings can roughly double by 2020 if he hits cost targets.
Rite Aid a weak prescription for Albertsons’ ills 20 Feb 2018 The Cerberus-owned grocery chain is buying the $2.3 bln pharmacy for little premium. It’s a way for Albertsons to go public after aborted IPO efforts. But pharma’s problems and Rite Aid’s lack of scale offer a wobbly crutch for the buyer’s flat sales and declining EBITDA.
Lloyds CEO’s next move: do as little as possible 20 Feb 2018 The UK lender is poised to unveil a new three-year strategic plan this week. Boss António Horta-Osório should resist anything dramatic. As long as the UK economy doesn’t implode, Lloyds could more than double its 2016 earnings just by avoiding charges for bad behaviour.
Italian bank recap requires M&A faith 19 Feb 2018 Mid-sized lender Creval is raising 700 mln euros from shareholders to repair its balance sheet. Pruning bad loans will require even more capital, and projected returns are slim. The hope is that the cleaned-up bank will become a target once domestic consolidation kicks off.
Why bank investors give a FICC about volatility 16 Feb 2018 Global fixed income trading revenue declined 11 pct last year, Coalition data shows. It’s a big reason investment banks again failed to cover their cost of capital. Market ructions will reveal whether a cyclical upturn is near – or whether banks need to accept structural decline.
Cox: Wall Street’s antisocial role in selling guns 15 Feb 2018 Lazard advised AR-15 maker Remington days before Wednesday’s school shooting, perpetrated with a similar rifle. Yet its asset managers talk about responsibility. So does the boss of BlackRock, the top owner of firearms shares. They could be helping reduce American carnage.
Asia spotlight gives Credit Suisse gleam, not glow 15 Feb 2018 The Swiss bank is unusually open about its business out east, where managing wealth and cutting deals go hand in hand. The charms of private banking are dulled by a problematic markets business, though. And the benefit of its tilt to high-growth countries is a work in progress.
Goldman’s ideal M&A date is in different league 14 Feb 2018 CEO Lloyd Blankfein says the Wall Street firm’s stumbling FICC unit is improving. Buying BNY Mellon could be a better fix. It would broaden the division’s client base and reduce Goldman’s reliance on trading. If only watchdogs, customers and the target itself could be won over.
Credit Suisse cushions image blows with hard cash 14 Feb 2018 A fresh probe into Asian hiring won’t help knocks to the Swiss bank’s reputation from the collapse of one of its exchange-traded notes. But Credit Suisse’s results were strong. The more boss Tidjane Thiam combines revenue growth and slashed costs, the more investors will relax.
Blackstone succession plan is reassuringly gray 13 Feb 2018 Naming real-estate head Jon Gray as day-to-day manager of the investment giant is logical. Big questions – like whether to remain a partnership – will still sit with CEO Steve Schwarzman. Blackstone isn’t a typical listed company; the gradual approach to change shows it.
Fund float is rabbit in Deutsche Bank’s hat 13 Feb 2018 The German bank’s shares are down almost a fifth this year, valuing the lender at less than half its tangible book value. A successful IPO of its asset management business would help shore up credibility. If choppy markets permit, Deutsche should accelerate the offering.
BlackRock seeks ultra-active way out of hard place 8 Feb 2018 Boss Larry Fink may raise a $10 bln fund to take long-term company stakes. For the manager of $6 trln, which has grown huge through indexing, it’s a throwback to its origins as an offshoot of buyout shop Blackstone that could help relieve BlackRock’s self-created fee pressure.
Rocky 2017 leaves SocGen with a mountain to climb 8 Feb 2018 Tax reforms and other one-off costs dragged the French bank’s return on equity down to 4.9 percent last year. But even underlying expenses grew faster than core banking revenue. CEO Frédéric Oudéa needs revenue growth at home to have any hope of hitting ambitious 2020 targets.
UniCredit’s next task is to kick-start growth 8 Feb 2018 The Italian bank is back in the black with an adjusted net profit of 3.7 bln euros. With the balance sheet fixed and much cost-cutting complete, CEO Jean Pierre Mustier can focus on boosting revenue. But ramping up product sales could be harder without its asset management arm.
Commerzbank now merits suitors as well as pity 8 Feb 2018 Normally, potential buyers would look askance at the German bank’s falling profits, rising costs and 1 pct return on tangible equity. But Commerzbank’s commitment to a 2018 dividend is a strong positive. Throw in potential deal synergies, and it should attract interest.
Volatility good and bad for Europe’s bank chiefs 7 Feb 2018 For the past two years Deutsche Bank’s John Cryan, Credit Suisse’s Tidjane Thiam and Barclays’ Jes Staley have been able to blame poor performance on becalmed markets. Higher volatility undermines that excuse. Trading revenues must grow or they risk shareholder revolt.
Equity #MeToo risk is more than a crapshoot 6 Feb 2018 Allegations like those made against founders of Guess jeans and Wynn Resorts are impossible to predict. But some industries may be more at risk of sharp, reactive share declines when claims surface. A filter might show gambling and fashion as vulnerable - but finance, too.