Breakingviews

Lesson from UBS: Who’d be an investment bank CEO?

February 2, 2016

Andrea Orcel has made the Swiss bank’s broker-dealer arm the envy of rivals, but it could only squeeze out a 4.4 pct return in the fourth quarter. With deal volumes at rock bottom, the industry as a whole looks beset. Alternative careers may never have looked so appealing.

Deutsche Bank risks its own “keep dancing” moment

January 28, 2016

Despite a rotten quarter in investment banking, Germany’s biggest lender will keep adding risk and rainmakers. CEO John Cryan is entitled to see fixed-income issues as cyclical. But in time his stance may echo ex-Citi boss Chuck Prince’s 2007 pledge to stay at the subprime ball.

Cleaner and leaner HSBC struggles to grow

November 2, 2015

The absence of big fines in the third quarter suggests the global bank’s compliance drive is paying off. Other costs are down, and bad debts under control. However, market turmoil dragged on revenue. A share price recovery will depend on HSBC showing sustained expansion in Asia.

Too soon for BNP to ramp up its investment bank

October 30, 2015

France’s biggest lender by assets grew third-quarter revenue 8.5 pct on gains in trading, the U.S. and emerging markets. But a plan to grab investment banking market share is risky given its low capital ratio. And a skimpy equity allocation flatters the division’s returns.

Deutsche Bank looks like tortoise to Barclays hare

October 29, 2015

The German lender is cutting 35,000 staff and 20 pct of risk assets in John Cryan’s big revamp. Its UK peer did better in Q3 capital markets advisory, a business both seek to grow. With Barclays hit by UK ring-fencing, Deutsche’s investment bank could cope better long term.

Credit Suisse will struggle to shed subpar UBS tag

October 21, 2015

New boss Tidjane Thiam is raising $6.3 bln and cutting costs to turn Credit Suisse into a wealth manager first, rather than private-cum-investment bank hybrid. Yet cross-town rival UBS is already ahead in that respect. Swiss acquisitions are logical, but growth could be elusive.

Deutsche’s fat finger points in helpful direction

October 20, 2015

Germany’s biggest bank erroneously paid $6 bln to a hedge fund client in June. Howlers like this are common in trading. But this is embarrassing for Deutsche Bank given its supposed aptitude. At least co-CEO John Cryan may find it easier to pursue some much-needed trimming.

Barclays, Credit Suisse, Deutsche: which to back?

October 19, 2015

Three of Europe’s top four investment banks have new leadership bent on strategic change. Deutsche Bank’s task is hardest: its top line relies most on low-return trading activity. Credit Suisse’s equities prowess and headstart over Barclays in finding a new CEO give it an edge.

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.

China’s investment bank wannabes face long march

May 5, 2015

Haitong Securities plans to hire hundreds of international bankers. Citic is touting its Asian network. Cross-border capital flows and pumped-up valuations help the push. But even if Chinese firms avoid previous upstarts’ mistakes, the challenges are big and the rewards distant.