Edition:
United Kingdom

Liam Proud

Breakingviews - Regulators will owe banks a favour post-pandemic

21 May 2020

LONDON (Reuters Breakingviews) - The wrath of regulators is shifting away from banks. Big lenders spent the past decade atoning for the 2008 financial crisis. The coronavirus-induced meltdown has tested the resilience of a reformed industry, while revealing the fragilities of financial markets. Banks will reap the benefits.

Breakingviews - Bad-debt puzzle has simple answer: consumer credit

14 May 2020

LONDON (Reuters Breakingviews) - Banks’ pandemic bad-debt charges paint a bewildering picture. JPMorgan Chief Executive Jamie Dimon set aside roughly $8 billion for dud credit in the first quarter, equivalent to over 3% of the U.S. group’s loans on an annualised basis. By contrast Deutsche Bank’s Christian Sewing increased the German lender’s bad-debt reserves by a piddling 500 million euros - just 0.4% of total lending.

Breakingviews - Barclays’ JPMorgan impression may fall flat

29 Apr 2020

LONDON (Reuters Breakingviews) - Bank results are like optical illusions: Similar numbers can make a different impression depending on the viewer’s angle. That’s the case with Barclays and its Chief Executive Jes Staley’s erstwhile employer, JPMorgan. Both took aggressive charges for bad debt. But what looks like a sign of strength for the U.S. bank may emphasise existing worries about Barclays. 

Breakingviews - HSBC’s dividend policy is ripe for reform

28 Apr 2020

LONDON (Reuters Breakingviews) - Pandemics are as good a time as any to sacrifice sacred cows. For HSBC Chief Executive Noel Quinn, that means the bank’s cherished but rigid dividend policy. 

Breakingviews - Europe’s big banks can weather 2009 times three

27 Apr 2020

LONDON (Reuters Breakingviews) - Memories of banking crises die hard. Yet Europe’s major lenders enter the current tumult with significantly bigger shock absorbers than during the last meltdown. According to a Breakingviews calculator, they should have enough capital to weather a 2009-style bad debt spike almost three times over.

Breakingviews - Barclays 2008 gamble has nuanced investor legacy

28 Feb 2020

LONDON (Reuters Breakingviews) - Barclays has mostly shrugged off the shroud of its Qatari crisis-era cash call. A London jury on Friday acquitted three senior ex-employees of fraud in connection with the 2008 capital raising. Former Chief Executive John Varley was cleared last June, while a case against the bank itself was dismissed in 2018. Yet the saga leaves a nuanced legacy for investors in the 26 billion pound lender. 

Breakingviews - Bank of England’s AI approach will toughen up

21 Feb 2020

LONDON (Reuters Breakingviews) - The Bank of England last year picked artificial-intelligence pioneer Alan Turing as the face of its new 50-pound note. It’s an apt choice given the central bank will quickly have to figure out how to ensure that the spread of smart robots throughout finance is a force for good rather than a destabilising influence.

Breakingviews - New UBS CEO is best answer to a difficult question

20 Feb 2020

LONDON (Reuters Breakingviews) - Two of UBS’ potential internal candidates to succeed Chief Executive Sergio Ermotti were bidding for the same prize on Tuesday evening. It was part of a friendly effort by Tom Naratil and Iqbal Khan, who co-lead UBS’ big wealth management business, to raise money at a charity auction in London. But the CEO job, if not the whisky-tasting trip on the block, went to someone else: Ralph Hamers, who will leave ING in a few months.

Breakingviews - Hostile bank M&A gets Italian makeover

19 Feb 2020

LONDON (Reuters Breakingviews) - When bank mergers and acquisitions go wrong, taxpayers tend to pick up the tab. That’s partly why hostile and unsolicited takeover attempts tend to be rare and unsuccessful in the sector. Yet with European regulators backing consolidation, and Intesa Sanpaolo’s surprise tilt at UBI Banca, bankers have reason to hope for a comeback. A bigger, cross-border deal would be the real test.

Breakingviews - HSBC investors are a step ahead of the interim CEO

18 Feb 2020

LONDON (Reuters Breakingviews) - Chief executives balance two risks when drafting profitability targets. Shoot for the moon, and jeopardise credibility. Go for something more realistic, and investors may just shrug. HSBC’s new strategy, unveiled on Tuesday by interim boss Noel Quinn, is closer to the second camp than the first. That also spells danger for the bank’s share price if his execution is anything but flawless.

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