Viewsroom: Jamie Dimon risks ruining a good run 1 Feb 2018 JPMorgan’s chairman and CEO intends to lead the bank until around 2023. Dimon has built a strong and successful company over the past 12 years. But the longer he stays, the harder it becomes to leave on an unambiguous high. Plus: Asian governments tackle bitcoin.
Lazard joins small band of U.S. tax rejects 1 Feb 2018 Recent changes mean the Wall Street firm will pay less to Uncle Sam, but make becoming a regular corporation harder. That would have expanded Lazard’s investor base and, in theory, its valuation. But the dilemma should be a spur: Lazard has advised on tougher transformations.
BBVA’s wanderlust has a looming downside 1 Feb 2018 A rise in impairments saw Spain’s second-largest bank by assets report returns below its cost of capital. BBVA’s reliance on emerging markets makes sense given a 4 pct drop in Spanish revenues. But the more it plays in risky climes the higher the return investors will expect.
Santander’s Brazilian samba drowns out UK blues 31 Jan 2018 A rebound in the Spanish bank’s largest market by profit offset rising UK bad debts, enabling an annual 11.8 percent return on underlying tangible equity. This year should see a stronger Brazil and fewer one-offs. That should mean Santander’s returns stay ahead of European peers.
Sberbank’s homeward pivot is a no-brainer 30 Jan 2018 The Russian bank is in talks to offload its majority stake in Denizbank. Sanctions had already taken the shine off Sberbank’s expansion abroad. But selling the Turkish lender at its $3.2 bln book value would bolster capital and help it become even more dominant in Russia.
U.S. healthcare bloat faces new triple threat 30 Jan 2018 Amazon, Berkshire Hathaway and JPMorgan are getting together to cut medical costs. Details are few and obstacles many, but they bring relevant skills and a lot of employees to the mix. A multibillion-dollar hit to health-sector stocks shows the shakiness of the status quo.
Banks have new reasons to fear digital disruption 24 Jan 2018 Wannabe fintech disruptors are out in force at Davos. Regulation and poor returns helped protect big lenders up to now. Renewed interest in financial services from the likes of Amazon and Apple poses a bigger threat. Banks will need to either join forces or partner with Big Tech.
Jamie Dimon’s $20 bln investment is pitch-perfect 23 Jan 2018 JPMorgan is boosting wages, branches, lending and philanthropy, all partly thanks to U.S. tax cuts. The plan makes the Trump administration look good. But the lender had the wherewithal to do most of it already. And shareholders will benefit most from Uncle Sam’s largesse.
Spotify puts IPO bankers on “disruption” playlist 23 Jan 2018 The music-streaming service may list its stock in New York without raising money or using underwriters. With private funding plentiful and business models asset-light, other tech groups could follow. It’s another threat to the high fees U.S. banks charge to take companies public.
Four steps to rehabilitating Barclays 23 Jan 2018 The UK bank has shed over a tenth of its market value in a year despite cutting costs and increasing capital. To close the discount, boss Jes Staley needs to rev up a misfiring investment bank, boost payouts to investors, resolve U.S. litigation and survive a UK regulatory probe.
UBS’s show of strength is mostly convincing 22 Jan 2018 The Swiss bank plans a 2 bln Swiss franc share buyback, its first since the financial crisis, after a jump in annual pre-tax profits. UBS missed consensus forecasts. But regulatory sign-off means shareholders have greater clarity around its capital returns versus rivals.
Aramco IPO beggars needn’t feel like losers 19 Jan 2018 BAML, UBS and Barclays have missed the cut to be global coordinators on the Saudi oil giant’s mega-listing, Reuters reports. Forgoing big fees from a $100 billion IPO will be cause for garment rending. Then again Saudi is a risky client and the process is replete with uncertainty.
Wall Street dethrones its wealth managers 18 Jan 2018 Citi, Morgan Stanley and UBS all pulled out of a ceasefire that reduces scope for lawsuits when brokers got poached. BofA says it will stay. The rules were already being interpreted liberally. Still, scrapping them sends a grim message to wealth-management staff about who’s boss.
Citi investors go through the tax looking glass 16 Jan 2018 U.S. tax cuts pushed the lender into an $18.3 bln loss, but should boost future earnings. That means boss Mike Corbat can be more ambitious about recently set growth targets. Citi’s recovery may be driven largely by forces beyond its control, but that’s not always a bad thing.
Scrapping UK bank levy is easy post-Brexit win 16 Jan 2018 As Britain leaves the European Union, the UK government is eager to persuade lenders to stay in London. But watering down regulations would risk irking Brussels. Getting rid of the surcharge on banks' balance sheets would be a simpler way to dust down the welcome mat.
Deutsche Bank is portent of investment bank gloom 8 Jan 2018 The German lender says fourth-quarter sales and trading revenue was 22 percent lower than a year earlier. Low volatility and weak trading revenue suggests rivals can expect similarly lacklustre results. But Deutsche’s dependence on trading income makes it especially vulnerable.
Sutherland embodied ups and downs of globalisation 8 Jan 2018 Former European Commissioner, trade chief and BP chair Peter Sutherland, who has died at 71, worked to make it easier for goods, capital and people to cross borders. His triumphs were blotted by corporate failures. Yet his legacy deserves to survive the current backlash.
Greek banks’ sour loans face reality check in 2018 5 Jan 2018 Lenders plan to shrink their bad debts by 37 pct over two years, including through sales. A recovering economy and falling government bond yields should help. But without a clearer picture of what buyers might pay, shareholders have little clarity over how much pain lies ahead.
Deutsche Bank bonus revival sends false signal 3 Jan 2018 A year after curbing payouts, CEO John Cryan has announced a return to “normal” variable compensation. Deutsche needs to retain staff despite subdued markets. With the shares trading at 60 pct of tangible book value, though, investors are still far from a return to normality.
EU’s market big bang offers clear pain, fuzzy gain 3 Jan 2018 Reforms bundled in the MiFID II directive aim to make finance fairer and safer. Rules that put a price on bank research and force trading out of opaque venues will cost over 2 bln euros to implement. Yet some exchanges face delays. In a global market, loopholes may also open up.