Breakingviews

John Gutfreund takes old Wall St model to grave

March 10, 2016

The ex-Salomon Brothers boss led investment banks from partnerships into prop trading – and ended up in a scandal. His era was, at least, one where bankers’ excesses didn’t put the system at risk. That lends his kind of risk taking a degree of perverse charm that will be missed.

JPMorgan results offer compelling case for fintech

January 14, 2016

Jamie Dimon’s bank is lending more and reducing drags on capital. Yet Q4 return on equity was only 9 pct and relied heavily on one-offs – and the bank is a top performer in the industry. Rising interest rates won’t help much, but new technology could boost revenue and savings.

BTG Pactual woes echo its history in reverse

December 4, 2015

The scandal-tainted Brazilian investment bank is in talks to sell its latest acquisition, BSI. The Swiss private bank joins the list of assets on the block to shore up cash after ex-CEO André Esteves’ arrest. It’s reminiscent of how he wrested control of Pactual from UBS in 2009.

Lazard and Evercore do more with less in M&A boom

July 23, 2015

Second-quarter results show the two independent advisers have not reaped as much benefit as bulge-bracket rivals from the recent dealmaking surge. But their simpler business models and higher margins leave more of the gains for shareholders – especially owners of Lazard.

Barclays investment bank is hardest to turn round

July 9, 2015

The UK lender, Credit Suisse and Deutsche Bank have all changed chief executives this July. Each has a distinct investment banking challenge. The Swiss bank is capital-light, Deutsche needs to cut costs. Yet Barclays’ shrinking top line suggests its revamp will be the toughest.

Jefferies rubs salt into own wounds

March 17, 2015

The Wall Street firm avoided a second straight quarterly loss, but just barely. It reported only $12.5 mln in profit after missing the rebound in most fixed-income trading and relying too much on slowing LBOs. Boss Richard Handler can’t afford another dismal quarter like this.

Wells Fargo: first big bank simple enough to fail

November 26, 2014

The $1.6 trln lender secured a provisional stamp of approval from regulators for its living will. Less credible plans from 11 other titans suggest size isn’t the issue. Wells ranks fourth in assets and first in market cap. The real problems are complexity and interconnectedness.

JPMorgan offers peek into trading magic circle

February 29, 2012

Investment bank boss Jes Staley has broken Wall Street’s code by revealing new data on how much the firm rakes in as a market-maker. It won’t quell suspicions that some of it is really prop trading. But it sheds useful light - and may whet investors’ appetite for even more info.

Rothschild Anglo-French union secures family grip

April 5, 2012

The investment bank is merging its French and British subsidiaries into a single listed vehicle, Paris Orleans. But the new group’s limited partnership structure guarantees airtight family control - regardless of who takes over from current chairman David de Rothschild.

Time for banks to gang up on rating agencies

May 28, 2012

If Moody’s downgrades several large investment banks, short-term funding may dry up and collateral demands increase. In spite of well-known flaws, ratings remain hard-wired into global finance. The latest review gives bankers the perfect excuse to curb agencies’ power.