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from Breakingviews:

Corbat’s Citi takes a step backward

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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.

First of all, Citi Holdings is no longer a major drag on earnings. The unit, which houses the bank’s toxic and unwanted assets, lost just $104 million in the three months through September. That compares with $3.5 billion in the same period last year and $500 million in this year’s second quarter.

Meanwhile, expenses are falling, thanks to Corbat’s move early on to speed up previous boss Vikram Pandit’s cost-cutting plans. At almost $11.7 billion, running Citigroup is now some $570 million cheaper than it was in each of the first two quarters of this year.

from Breakingviews:

Goldman isn’t yet the envy of Wall Street again

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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

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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.

from Breakingviews:

Barclays’ investment bank is too good to lose

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By Dominic Elliott

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

Is Barclays’ investment bank too good to lose? Antony Jenkins is wrestling with this question ahead of the UK lender’s strategic D-day next February. Politicians, as well as some regulators and shareholders, wouldn’t mind seeing the hard-charging investment bankers associated with the Bob Diamond debacle cast adrift. But while Jenkins will need to perform open-heart surgery on the unit, it still has value as part of the group.

from Breakingviews:

UBS rethinks the impossible

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By Dominic Elliott

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

UBS is going where no bank has yet dared to tread. The Swiss wealth manager and investment bank is poised to reveal a radical strategy that could see it pull out of fixed-income trading. Such a plan would be expensive and slow to execute - that’s why rivals typically think such moves are impossible. But the decision could prove an industry game-changer.

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