Breakingviews

Deutsche’s attitude problem compounds Libor hit

April 23, 2015

The German bank is paying a record $2.5 bln to settle rate-rigging charges. To make things worse Deutsche Bank misled the UK regulator and others. That’s not smart in a highly regulated industry. With a currency market fine also pending, the reputational damage could grow.

Good news: China’s bad debts are on the rise

March 25, 2015

Agricultural Bank’s 28 percent increase in duff loans over six months looks modest next to what’s happening at some lenders. Across the board, write-offs and overdue loans are ballooning. Still, China’s economic slowdown may be giving cover for some welcome honesty.

Activists take on passivists in HK share spat

February 12, 2015

Hedge fund Elliott has challenged Bank of East Asia’s plan to issue a slab of stock to a friendly shareholder. Investors can theoretically stop these kinds of deal, but often don’t. The activists’ chance of success is slight, but they raise some good questions.

RBS puts lipstick on Citizens for $14 bln IPO

September 8, 2014

The Scottish bank reckons cost cuts, rising interest rates, capital returns and more business will boost its poorly performing U.S. unit. Granted, all this might create decent enough returns to justify the price. But RBS is painting too pretty a picture of Citizens’ independence.

The wrongs and rights of the euro banking union

December 19, 2013

The EU governments’ agreement on how to resolve failing lenders looks complex and hard to implement, and it could worsen the fragmentation of euro zone banks. But it is a start. And the final compromise lowers the political barriers to fixing the southern countries’ lending woes.

China bank IPO shows rewards of financial alchemy

October 24, 2013

Bank of Chongqing’s remarkable 32 percent return on equity relies on a trick that is all the rage for the country’s lenders: repackaging loans to look like low-risk investments in other banks. For investors it’s a profit opportunity. For regulators, it’s a potential nightmare.

China’s debt molehills could turn into mountains

August 27, 2013

Banks have reported low overall bad debt levels. But locally, risks are mounting. The east coast and retail sector are two areas where credit conditions are getting worse. In China, regional problems can escalate rapidly, and investors have poor visibility over where risks lie.

Ping An flop could leave HSBC red-faced but richer

January 9, 2013

The bank’s $9.4 billion plan to offload its stake in the Chinese insurer is in doubt. If regulators block the sale to a Thai billionaire, HSBC’s reputation will take a knock. Finding other buyers won’t be easy. But the recent market rally means the bank could end up better off.

Other banks may take most of the UBS Libor pain

December 14, 2012

The Swiss lender is set to pay $1 bln for fiddling interbank rates. That’s more than twice as much as Barclays, which lost a CEO over the case. After many reputational blows, UBS has less to lose. But fellow Libor miscreants will be looking at an even more hostile world.

Banking union will revive pan-EU bank M&A

December 7, 2012

The euro crisis has balkanised the continent’s banks, with national authorities protecting their own turf and forcing domestic mergers. A single regulator and central bailout fund will lift these barriers. And it might also make EU banks more attractive to non-euro competitors.