LONDON (Reuters Breakingviews) - Banco Santander has made shareholders in its Mexican unit a proposal they can refuse. The Spanish bank on Friday offered investors in Santander Mexico the chance to swap their shares for stock in the parent company. Despite a 14 percent premium, the deal is unenticing. Investors should hold out.
LONDON (Reuters Breakingviews) - European Central Bank President Mario Draghi is considering ways to ease the financial pain that negative interest rates impose on banks. However, such measures would at best only modestly boost lenders’ profits and do nothing to remedy their bigger challenge: high costs.
LONDON (Reuters Breakingviews) - “I trade therefore I lose.” This version of René Descartes’ famous maxim is probably not what Société Générale had in mind when naming its proprietary trading unit after the 17th Century French philosopher. Yet low returns are what the division tended to deliver. Closing it down, and pulling out of commodities trading, is a logical but insufficient response to SocGen’s mediocre investment banking performance.
LONDON (Reuters Breakingviews) - Deutsche Bank's latest strategy for boosting its appeal may be its most effective yet: the German lender headed by Christian Sewing has banned staff from Dorchester Collection hotels after its owner, the government of Brunei, implemented homophobic laws. Shareholders will welcome the fact that employees of a bank whose costs ate up 93 percent of revenue last year will no longer frequent a chain which charges nearly 400 pounds a night for a standard room in London. However, the decision raises the moral bar.
LONDON/MILAN (Reuters Breakingviews) - Deutsche Bank boss Christian Sewing has just received an unexpected leg-up from his rival Jean Pierre Mustier, who runs Italy’s UniCredit. Both men are competing for the affections of Commerzbank. The arrival of another suitor puts extra pressure on the German government to back a domestic marriage.
LONDON (Reuters Breakingviews) - Swedbank’s attempt to cauterise wounds is unlikely to succeed. Its board on Thursday dismissed Chief Executive Birgitte Bonnesen and appointed Finance Director Anders Karlsson as an acting replacement following allegations that the lender was involved in money laundering in the Baltics. The problem for investors is that the scandal will last longer than her tenure.
LONDON (Reuters Breakingviews) - Albert Einstein defined insanity as endlessly doing the same thing while expecting a different result. By that yardstick, global investment banks are off their rockers. New year optimism about rising rates and greater volatility boosting markets revenue has been summarily dashed. Instead, trading arms will continue to disappoint.
LONDON (Reuters Breakingviews) - Overexcited, overpaid and over here. The comic line once aimed at American soldiers in Europe also summarises the involvement of U.S. banks in the possible merger of Deutsche Bank and Commerzbank. If the deal happens, it could owe much to Wall Street nous.
LONDON (Reuters Breakingviews) - So much for pan-European unity. Deutsche Bank is in merger talks with domestic rival Commerzbank. Chief Executive Christian Sewing was forced into acting sooner than he’d have liked due to concerns that other banks, including France’s BNP Paribas, might also covet the 8 billion euro lender. A hint of nationalism may play well with German policymakers. But the banks will still need to explain how a deal makes sense for shareholders.
LONDON (Reuters Breakingviews) - In the Catholic catechism, a “just war” restores moral order rather than merely exacting revenge. Corporate crusader Edward Bramson has reason for bloodlust given the losses he has sustained since he disclosed a 5 percent stake in Barclays nearly a year ago. But his battle to capture a board seat and cut the investment bank down to size is on shakier ground after a broadly robust fourth quarter.