Breakingviews

HSBC revival overshadowed by existential questions

May 5, 2015

Better investment banking revenue and fewer bad loans boosted the $194 bln bank’s quarterly results. That’s a welcome respite from the Swiss tax furore. Still, long-term fortunes rest on decisions about its shape, head office location and UK business. None will be resolved soon.

Review: Hank Paulson’s kiss-and-don’t-tell China guide

May 1, 2015

The former U.S. Treasury secretary paints a world where noble Chinese officials beg straight-talking American bankers to help get their finances in order. Some things have changed. What hasn’t is that contacts are everything, and that killer details are always left unspoken.

M&A predators stalk Michael Milken’s ball

April 29, 2015

The financial elite prowling Beverly Hills at the behest of the former Drexel Burnham boss worried about everything from China to cybersecurity to stock valuations. Three former Treasury chiefs lamented a lame Washington. When it came to deals, however, animal spirits ran wild.

Deutsche Bank revamp puts capital ahead of returns

April 27, 2015

Exiting Postbank, and cutting 200 bln euros of investment bank assets and 3.5 bln euros of costs, is what the German lender needs. A 5 pct leverage ratio goal is also higher than expected, raising the bar for European rivals. But it means investors face a wait for decent returns.

Europe’s credit boom locks in mediocre returns

April 16, 2015

Investors are throwing money at European companies. Carrefour and Danone paid little over 1 pct a year to borrow for a decade; Novartis got 20-year funds at similar levels. A Breakingviews calculator shows how bond buyers’ generosity could backfire.

Silicon Valley trials start as sexism lawsuit ends

March 29, 2015

Venture capital firm Kleiner Perkins beat gender discrimination allegations, but the likes of Facebook and Twitter face similar lawsuits. The court of public opinion also has yet to deliver its verdict. Scrutiny of how the tech world treats women is just getting under way.

Santander’s U.S. woes a cautionary M&A tale

March 12, 2015

The Spanish bank’s stateside lender is struggling to pass the Fed’s stress test for the second year in a row. A flawed bank takes time to fix. But Santander let it drag on too long. New bosses should help. The tardy response, though, keeps Santander on the takeover sidelines.

Lloyds investment case hinges on its next dividend

February 27, 2015

The UK bank’s first payout since 2008 is an encouraging milestone. But it’s largely symbolic. The critical valuation issue is whether Lloyds’ pledge to pay out at least half its future earnings represents a floor or a ceiling - and whether the regulator allows fatter payouts.

Review: Building HSBC’s sprawling, flawed empire

February 27, 2015

The Hong Kong bank grew into one of the world’s biggest financial institutions. But poor results and a furore over Swiss tax make for an unhappy 150th anniversary. A new history shows how hands-off management and breakneck M&A under former chairman John Bond are partly to blame.

HSBC’s operating woes trump Swiss tax furore

February 23, 2015

CEO Stuart Gulliver’s offshore accounts bring new scrutiny of past fiscal fiddles. They also raise the bar for future good behaviour. The main concern for investors, though, is the bank’s lacklustre financial performance. Even a reduced 10 percent ROE target is some way off.