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from Breakingviews:

Medtronic-Covidien is blast from M&A advisory past

By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Investment bankers had a rude awakening over the weekend. A mega-merger like the $43 billion cash and stock tie-up Medtronic and Covidien announced on Sunday often provides a feast for a raft of advisory firms. Not this time. The two medical devices companies are only using one each.

Piling on advisers may sometimes cover executives’ backs in case a deal goes bad or incurs the wrath of shareholders. On occasion, extra banks provide separate advice for directors worried that a chief executive may have his own agenda, for example as a big shareholder.

Other times, companies hand out merger roles to keep banks sweet. They may want, for example, to repay support in less lucrative lines of business – not least lending. This tradeoff is one method universal banks like Citigroup and JPMorgan have used over the past decade or more to muscle in on the M&A business. In Comcast’s $45 billion all-stock deal to buy Time Warner Cable, announced in February, Comcast used three advisers, including JPMorgan. Its target had four, one of them Citi.

from Breakingviews:

Review: A crisis-like evaluation of “Stress Test”

By Breakingviews columnists
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

To judge the merits of Tim Geithner’s crises reflections in “Stress Test,” six Breakingviews columnists digested different pieces of the book in a short amount of time. Like the regulators who often lacked broader context, the assessments vary. Yet there’s also consensus it’s a useful tome for the financial library.

from Breakingviews:

Corbat’s Citi takes a step backward

By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Mike Corbat’s Citigroup has taken a step backward. The mega-bank’s chief executive ends his first year in charge with third-quarter earnings below estimates and a meager 6.4 percent return on equity. Granted, markets over the summer were hardly amenable. But the breaks Citi got elsewhere make the bank’s overall performance look that much worse.

from Breakingviews:

Goldman isn’t yet the envy of Wall Street again

By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Goldman Sachs isn’t yet the envy of Wall Street again. The investment bank generated $1.9 billion of profit in the second quarter, twice the figure of a year ago and beating the estimates of analysts by a third. Though it sounds like a return to Goldman’s good old days, it hasn’t managed to solidly outpace rivals.

from Breakingviews:

Could UBS resurrect partnership investment banking?

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Goldman Sachs’s initial public offering in 1999 seemed to hammer a nail in the coffin for the partnership model in investment banking. Now activist investment firm Knight Vinke is suggesting that UBS might adopt something like a partnership structure as part of its plan to split wealth management from investment banking. The breakup idea is overambitious today. Only with time, luck and possibly more capital, could an employee-owned UBS investment bank be made to work.

from Breakingviews:

Japan lifts Nomura from its lost half decade

By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Nomura has spent most of the past five years trying to break out of Japan. So it’s ironic that the investment bank’s best full-year results since 2007 were propelled by a revival at home. As with Japan’s economic renaissance, however, investors’ hopes are running ahead of reality.

from Breakingviews:

Radical career move: become a Chinese citizen

By Peter Thal Larsen

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

Here’s a radical career choice for investment bankers: become a Chinese citizen. American-born Marshall Nicholson has swapped his U.S. citizenship for a Hong Kong passport. Though the move is largely for family reasons, it will also go down well with clients on the mainland. For Western financiers seeking a local edge, it’s the ultimate display of commitment.

from Breakingviews:

Japan helps Nomura put a bad year behind it

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Who wants to be a global investment bank anyway? Not Nomura. The Japanese financial group delivered a solid quarter-on-quarter boost in underlying pre-tax profit in the final three months of 2012, driven largely by a recovery in its home market. Last year’s insider trading scandal and subsequent resignations punctured the global dreams Nomura was pursuing when it bought parts of bankrupt Lehman Brothers in 2008. For investors, that may be no bad thing.

from Unstructured Finance:

Wall Street channels Charles Dickens in 2012

By Lauren Tara LaCapra

As 2012 comes to an end, it’s clear that Wall Street has had the best-worst year in quite some time.

Bank profits are at record highs and lows, driven by free money from the Fed that they can’t make any money with, and a historically small number of historically huge deals. Facebook’s IPO – among the biggest ever – happened this year, and it was an enormous failure and a terrific success all at once.

from Breakingviews:

UBS points to next banking worry: client risk

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

UBS’s Libor shame points to a new concern for financial firms – relationship risk.

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