Breakingviews

Deals can help Japan’s banks offset dollar drought

April 13, 2016

Mega-banks MUFG, SMFG and Mizuho are making new loans abroad faster than they can amass matching deposits. This headache has boosted the cost of swapping funds from yen to dollars, and made regulators in Tokyo wary. Buying smaller U.S. lenders would help reduce the mismatch.

India can learn from Asian bank turnarounds

April 7, 2016

Privatising $2 bln lender IDBI would send a good sign about India’s resolve to fix wobbly banks. Previous deals in the region offer a template for success: let an investor take a big stake, complete with real control over decision-making, and then go easy on the regulation.

Credit Suisse mess goes right to the top

April 5, 2016

In October the Swiss bank aimed to make investment bank earnings steadier. But it kept lucrative high-yield positions, which then lost $1 bln. Boss Tidjane Thiam says he was unaware the holdings had been ramped up. He should have been watching them like a hawk.

China postal bank’s $7 bln sale evokes past frenzy

December 9, 2015

The country’s sixth-biggest lender is selling a 17 pct stake to investors such as China Life, Temasek and CPPIB. A big IPO will follow. At a premium to book value, the $42 bln valuation recalls earlier bank privatisations. It’s a contrast to the cloud now hanging over the sector.

Pactual an arresting case against dual-class stock

December 2, 2015

Incarcerated boss André Esteves has ceded voting control at the investment bank in a stock swap with his partners. It’s a neat fix, but reveals yet another risk of supervoting stock. Investors in companies with similar structures, like Google and Moelis, should take heed.

Bank of East Asia feels weight of its China drive

November 30, 2015

The Hong Kong lender has the second biggest branch network of any foreign bank in the People’s Republic. But fast expansion has come at a cost: BEA underperforms rivals. With activist Elliott still building its stake, it’s a good time to focus on improving profitability.

HSBC’s slow road to China securities could pay off

November 3, 2015

The lender is setting up a mainland joint venture more than a decade after its first rivals. Foreign investment banks have struggled to make inroads in the People’s Republic. Unusually, however, HSBC will have majority control. That could more than make up for its slow start.

Why China’s graft probes don’t rattle investors

November 3, 2015

Corruption scandals would hammer shares in Western firms. Not so for those caught in China’s crackdown like Dongfeng and AgBank. That’s because the campaign is so sweeping, and targets people rather than companies. Besides, the whole market already suffers an integrity discount.

HSBC will probably stay put in London

October 23, 2015

Europe’s biggest bank is considering shifting its headquarters to the United States, a report says. That would be an odd move, given HSBC’s chequered past there and more viable Asian alternatives. As the backdrop improves in Britain, the likeliest outcome is no change at all.

Chinese banks get closer to losing training wheels

June 25, 2015

Removing an official cap on the ratio of loans to deposits should remove distortions and could boost credit. More importantly, it takes China a step nearer to freeing its domestic financial system. Then it will be up to regulators, not rules, to stop banks careering off the road.