UBS executive reshuffle fires up succession race 14 Dec 2017 Martin Blessing has replaced Juerg Zeltner as head of the Swiss group’s private bank. The ex-Commerzbank boss has good timing: tax issues are mostly in the past. If he can fend off rivals in Asia and reignite European growth he boosts his chances of replacing CEO Sergio Ermotti.
Bank rules wrong way to fill EU green finance gap 13 Dec 2017 The European Commission wants lenders to help plug the 177 bln euro annual funding shortfall for low-carbon projects. Lower bank capital charges for "green loans" is a mistake, though. Fuzzy definitions will lead to loose lending, and capital ratios will become even more opaque.
UniCredit ups the ante on bad-debt cleanup 12 Dec 2017 Italy’s biggest bank by assets is vowing to run down a 33 billion euro portfolio of non-core loans by 2025. It also reckons it can withstand regulators’ drive to purge lenders’ bad credit, and still increase dividends. The move will put more pressure on rivals.
Jeremy Corbyn pay row shows costs of bank excess 1 Dec 2017 The UK opposition leader attacked “speculators” and criticised banker pay, as UBS chief Sergio Ermotti defended it. A decade after the crisis, remuneration still fuels dissent. Shareholders' failure to rein it in has led to dismal returns. Volatile politics could be more damaging.
Europe’s bad-loan struggle risks backfiring 1 Dec 2017 Italy is leading the resistance to a European Central Bank plan to shrink banks’ bad debts. A victory will be empty, though. Ignoring defaulted loans hurts new lending. Failing to clean up legacy balance-sheet risks could also kill off the euro zone’s bank deposit scheme.
Investment bank weighs on Credit Suisse turnaround 30 Nov 2017 CEO Tidjane Thiam played down the Swiss bank’s capital markets business in a shareholder presentation on Nov. 30. Yet the unit brought in 45 percent of net revenue in the first nine months of 2017. Achieving double-digit return targets depends on Thiam finding more costs to cut.
Nomura makes timely return to merchant banking 29 Nov 2017 The Japanese group that once had Guy Hands investing money for it is starting a new $900 mln buyout fund. There are potential pitfalls, like client clashes and politically-driven deals. If they're avoided, though, Nomura could use its plentiful capital to generate solid returns.
SocGen’s new recipe is missing key ingredient 28 Nov 2017 The French lender has unveiled new plans to boost lacklustre shareholder returns. Its targets are admirable but predicated on demanding revenue growth forecasts. Cost cuts would be more reassuring for long-suffering shareholders.
Britain’s Brexit-ready banks a boon for government 28 Nov 2017 The country’s lenders are robust enough to handle even a messy exit from the EU, according to the Bank of England’s latest stress tests. The clean bill of health will help state-owned RBS restart dividend payments, making it easier for the UK to sell down its 71 percent stake.
Wall Street chip analysts put a “buy” on research 28 Nov 2017 Bearish Morgan Stanley notes on memory prices were followed by $25 bln in lost market value for Samsung, TSMC and Western Digital. Despite an excess of cheerleading from the sell-side, it has the power to move markets. It's a timely reminder as the business model faces upheaval.
Julius Baer CEO bows out at private banking peak 27 Nov 2017 Whizzkid Boris Collardi is leaving the Swiss group for smaller rival Pictet after eight years in charge. Bold deals and aggressive Asian expansion boosted earnings and lifted shares to record highs. Toppy markets and intense competition will make life harder for his successor.
Italy’s problem banks defer profitability question 20 Nov 2017 Shareholders in Carige have pulled the mid-sized lender back from the brink by backing a 560 mln euro cash call. That’s a relief for taxpayers. But the bank’s high cost base will weigh on its attempts to return to the black. A new owner may be needed to push through deeper cuts.
Cerberus puts German twist on distressed investing 15 Nov 2017 The private equity fund has bought 3 pct of troubled Deutsche Bank, months after taking a 5 pct stake in sickly rival Commerzbank. The twin investments might raise hopes of a merger between the two lenders. But other shareholders – including the German state – have a bigger say.
Hadas: Unintended consequences may be new normal 15 Nov 2017 From Brexit to Donald Trump to Saudi Arabia, the world is full of surprises. But those cheering wrenching change may face further upsets. The UK rejoins the EU, the U.S. president discredits small government, and Saudis become poorer. The next shock may be the rise of dullness.
Sberbank thrives amid sanctions and crisis 15 Nov 2017 Russia’s largest lender reported a 63 pct jump in third-quarter profit. The fallout from western sanctions has helped the state-owned bank consolidate market share, while recent bailouts boosted demand for its deposits. Sberbank will continue to benefit from uncertainty.
UK economy will share Theresa May’s pain 13 Nov 2017 The Prime Minister is facing growing challenges to her leadership from the ruling party’s pro- and anti-EU factions. Political disarray increases the risks that leaving the European Union will do serious economic harm. A softer Brexit is growing harder to deliver.
ECB haste risks slowing its bad-loan cleanup 10 Nov 2017 The central bank overstepped its authority with proposals to impose stricter rules on banks for non-performing loans, the EU’s parliament says. The ECB is right to target European lenders’ 840 billion euro mountain of bad debt, but its clumsy move may set back the effort.
Goldman imports Chinese money to lift U.S. trade 9 Nov 2017 The investment bank unveiled a plan to invest $5 bln in American manufacturers with Beijing sovereign fund CIC. In effect, pricey capital generated from trade deficits will go to help the heartland export to China. It's a rich idea to present an anti-globalist U.S. president.
Frumpy Commerzbank retains M&A allure 9 Nov 2017 Germany’s second-largest lender earned a pitiable 0.3 pct return on tangible equity in the first nine months of 2017. That explains why it trades at a fraction of book value. But rising customer numbers and hope of higher interest rates will continue to tempt potential buyers.
Intesa’s bank pruning carries a short-term sting 7 Nov 2017 Rescuing two beaten-down lenders dragged on the Italian bank’s bottom line in the third quarter. However, a 1.3 bln euro tax-free state fund will soak up the cost of branch closures and layoffs, while Intesa will keep the upside. It’s still an attractive trade-off for investors.