Lazard’s next CEO should channel James Gorman 19 May 2023 Ken Jacobs will leave the storied advisory shop much the way he found it, ceding ground to new rivals in the process. Over the same 13-year span, Morgan Stanley’s retiring boss shrewdly and successfully reshaped his bank. A similarly bold approach would help recharge Lazard.
Capital Calls: BT, Mediobanca 18 May 2023 Concise views on global finance: The 14 bln pound UK telco’s vague guidance is a concern for its two big shareholders seeking to recoup losses; the 8.5 bln euro Italian bank buys its biggest boutique yet.
UBS kitchen sink has protection from further leaks 17 May 2023 The bank reckons it might write down the assets on Credit Suisse’s balance sheet by $10 bln, inflate its liabilities by $3 bln, and take a $4 bln litigation hit. Those numbers could get bigger over time. But a low purchase price gives CEO Sergio Ermotti a chunky margin of error.
It’s time HSBC’s top owner calms down or sells up 4 May 2023 Ping An’s fight for a rejig is going nowhere, more so after the $150 bln lender’s bumper profit. Continuing risks hurting the Chinese insurer, HSBC and maybe even Hong Kong. Better to peacefully reap the benefits of boss Noel Quinn’s overhaul - and rejoin the fray if he falters.
Capital Calls: Europe’s JPMorgan, UniCredit 3 May 2023 Concise views on global finance: BNP Paribas is sucking up deposits while other rivals lose them, but its 12% return on equity goal looks uninspiring; the Italian bank’s CEO Andrea Orcel raised his financial targets for 2023, but may not rush a BPM swoop.
UK listing shakeup requires double dose of hope 3 May 2023 Britain’s financial watchdog wants to spur domestic IPO markets by weakening shareholder protections. Yet making London appealing to fast-growing foreign firms requires wider reforms that may not occur. And lower standards are only a good idea if investors punish bad governance.
HSBC puts its shareholders on the spot 2 May 2023 Boss Noel Quinn reckons last quarter’s eye-popping 19% equity return is somewhat sustainable. If he’s right, investors are undervaluing the bank, and top owner Ping An is wrong to push an Asia spinoff. But it requires everything from interest rates to asset sales to play nice.
Deutsche’s Numis swoop more logical than it looks 28 Apr 2023 The lender’s $500 mln purchase of the UK broker seems an odd move for CEO Christian Sewing, who once aimed to shrink investment banking. But the valuation isn’t silly, and a deal may boost Deutsche Bank’s corporate lending arm. Numis’s smaller peers may also now seek a new home.
Sumitomo triples down on Jefferies at right time 28 Apr 2023 The $8 bln Wall Street firm’s earnings have slumped with deal flow, so SMFG boss Jun Ohta can boost his stake to 15% at roughly the same price he paid two years ago. This time he has the benefit of knowing his partners better and can get ahead of any boom in investment banking.
Resolving Credit Suisse: an alternative history 27 Apr 2023 Swiss authorities merged the bank with UBS, rather than risk a financial panic by bailing in bondholders. Yet Credit Suisse was arguably unique and small enough to be wound down. Breakingviews imagines that scenario, which may serve as a template if the enlarged group ever fails.
Capital Calls: Plan C for Teck Resources 26 Apr 2023 Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.
StanChart shareholders look too blinded by history 26 Apr 2023 The $22 bln bank’s near-12% equity return last quarter breezed through boss Bill Winters’ 2024 target. His mostly unimpressive track record is a concern, as is slowing economic growth. But investors value the lender at just half its book value. That’s overly pessimistic.
New UBS investor pitch fits better than old one 25 Apr 2023 Rescuing Credit Suisse is a risky move. But first-quarter results show that the buyer’s existing business is struggling to grow. The merger offers large savings and creates a wealth giant with $3.5 trln of assets. The return of proven cost-cutter Sergio Ermotti as CEO helps.
Exploring the City of London’s existential dread 25 Apr 2023 The global financial centre is suffering a spasm of anxiety about its status, while the government is pushing post-Brexit reforms. In this Exchange podcast William Wright, founder of the New Financial think tank, discusses the roots of the malaise and what can be done to fix it.
Guest view: Why bank investors have it the hardest 21 Apr 2023 Lenders were supposed to be boring after 2008. Recent collapses exposed that vision as a fantasy. Shareholders grapple with high leverage, opacity, erratic regulators and intangibles like trust. Seemingly low valuations may not be low enough, argues former analyst Rupak Ghose.
Wall Street aces its real-life stress test 20 Apr 2023 Disaster simulations the Fed imposed on JPMorgan, Morgan Stanley and others hadn’t gamed out a sharp rise in interest rates. Nonetheless, the mega-banks have emerged intact, and in many cases better off, from a near-existential shock. It bodes well for the crises yet to come.
Chinese financiers’ pay cut could cut too deep 20 Apr 2023 Salaries are being slashed and executives arrested as campaigns attacking bad debt and excessive wealth converge. Few sympathise with flashy capitalists, but the private sector could take collateral damage if President Xi Jinping’s rectification push goes too far.
Rivals can feast on Credit Suisse client spoils 17 Apr 2023 UBS’s wealth assets may soar to $3.4 trln after buying its main competitor. Yet, smaller challengers are looking to poach private bankers, and clients will diversify away from the new mega-bank. And rival financial hubs have a golden opportunity to dent the Swiss wealth crown.
Baijiu is fiery palate cleanser for Hong Kong IPOs 17 Apr 2023 A KKR-backed Chinese liquor group’s $800 mln listing is the city's largest this year. Beijing is directing funding onshore to strategic industries, and that will force more consumer companies to Hong Kong. Investors will be alert to see if that pushes more risk their way too.
UBS can score a quick win with Swiss sale 12 Apr 2023 Chair Colm Kelleher’s acquisition of Credit Suisse is infuriating politicians. They fear the new bank will be too big in Switzerland and lead to job cuts. Selling or listing the domestic business would buy political goodwill and give UBS a tidy return on its $4 bln investment.