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from Breakingviews:

Credit Suisse still firing on one cylinder

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By Dominic Elliott

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

Credit Suisse is firing on one cylinder. The Swiss lender’s reshaped private banking arm is pulling in more money. But an 11 percent year-on-year dip in quarterly investment banking revenue shows its other main unit is still sputtering.

The Swiss bank’s problem – fixed-income trading – is a familiar one for investment banks. Citigroup and JPMorgan have already reported top-line falls in bond-trading revenue similar to Credit Suisse’s 21 percent quarterly year-on-year decline. Still, the Zurich-based lender should be more disappointed.

The bank’s historic strengths in trading junk bonds in America should have translated into a relatively better performance right now, given rock-bottom interest rates are still stoking demand for higher-yielding assets. Looking forward, Credit Suisse’s focus on riskier credit, emerging markets and securitisation could suffer the most as the Federal Reserve tapers its bond-buying. The bank is ranked well outside the top six banks active in the fixed-income products – foreign exchange, rates and commodities – that would prosper from a turn in the interest-rate cycle.

from Breakingviews:

Lafarge-Holcim share jump has gone far enough

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By Quentin Webb and Chris Hughes

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

Lafarge and Holcim’s share rally has gone far enough. The Franco-Swiss duo’s planned 37 billion euro ($50 billion) mega-merger, which would create the world’s biggest cement maker, has already added 3.3 billion euros in combined market capitalisation since the deal leaked on Friday. Cost savings and revenue boosts could in time be worth a lot more. But the market’s caution is justifiable.

from Breakingviews:

JPMorgan commodities sale shows trading’s opacity

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By Kevin Allison and Antony Currie

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

JPMorgan’s $3.5 billion sale of its physical commodities business is a perfect example of just how opaque trading is. The bank is selling what is probably a low-return business with regulatory headaches to Mercuria, a privately held firm that does not have to make its financials public. The dearth of details does make it hard to judge, but applying some statistics from both the industry and some rivals suggests Mercuria may be paying top whack.

from Edward Hadas:

The ongoing ethics struggle of banks

The Swiss Bank Employees Association has told an uncomfortable truth: it was “generally known” that for many years some of their employers profited from customers’ “tax evasion.” That is incontestable, as many of the banks’ managers concede. But the practice, supposedly now ended, raises an important question about ethics and business. Why were neither the managers of the Swiss banks nor their employees worried by this business model?

The hardly hidden truth was included in an Association press release which called on Brady Dougan, the chief executive of Credit Suisse, to apologize for insulting the Swiss bank’s employees.

from Breakingviews:

Nestle selldown leaves L’Oreal more a family group

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By Pierre Briançon 

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

Nestle’s sale of an 8 percent stake in L’Oreal to the French cosmetics group marks a fundamental reset of the duo’s relations. The French get more freedom; the Swiss, cash and some assets. Nestle may describe its reduced holding as “strategic”, yet looks, long term, like a seller of more. But keeping a 23 percent investment gives it the option to reverse course if it wishes.

from John Lloyd:

Switzerland says ‘We’re full’

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Swiss voters have opted for stiff restrictions on immigrants entering the country -- including those from European Union countries. In doing so, they’ve given joy to the burgeoning anti-immigrant, anti-EU parties, a blow to the politicians and officials in Brussels and a blaring warning to center parties on the continent and everywhere.

In Europe, the consensus on immigration has always been fragile -- and now it’s being shredded to bits.

from Breakingviews:

Banks need to lop another quarter off costs

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By Dominic Elliott

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

Big has been bad for shareholders in investment banks. That’s according to a report published by consultancy McKinsey on Nov. 20. The 13 largest investment banks made an average return on equity (ROE) of just 8 percent last year - below the 10 percent achieved by the next 200. Given banks’ double-digit cost of capital, the bulge bracket is still frittering away shareholders’ money. More cuts are needed.

from The Great Debate:

Swiss outrage over executive pay sparks a movement in Europe

Here’s an idea for how to end corporate greed and reverse the trend of growing income inequality worldwide: impose a new rule that would limit the pay of top executives to just 12 times that of the lowest-paid employees at the same firm. In other words, prevent CEOs from earning more in one month than the lowliest shop-floor worker earns in a year.

This proposal might sound like something cooked up by Occupy Wall Street or another radical protest movement, but in fact it comes from the heartland of a nation not usually known for its disdain of money-making: Switzerland. On Nov. 24, the Swiss will vote in a referendum on whether to enshrine the 1:12 pay ratio -- in their national constitution, no less.

from Breakingviews:

Credit Suisse shoved into another restructuring

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By Dominic Elliott

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

When Credit Suisse decided to shrink its fixed income business, many thought it wasn’t enough. They were right. After cutting a third of its products since 2009, the Swiss bank is renewing the assault.

from Breakingviews:

M&A could help Nestle tackle sales slowdown

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By Robert Cole

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

It is easy to see why Nestle might want to do deals. The Swiss food group is finding it hard to deliver on sales growth targets. And it can afford to buy itself out of trouble.

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