FirstGroup cash call shows deleveraging imperative
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
It’s shaping up to be the year of the rights issue in Europe. FirstGroup’s 615 million pound ($1 billion) cash call suggests companies are biting the bullet and exploiting the rise in equity markets to repair their balance sheets. The jumbo issue from the UK rail and bus operator comes after similar fundraisings from the likes of Commerzbank, Dutch cable company KPN and travel operator Thomas Cook. Other distressed companies should look to delever while they can.
Widened EU bonus cap looks more like a net
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own.)
By Dominic Elliott
LONDON, May 17 (Reuters Breakingviews) – Widening the
European Union bonus cap to include almost all the region’s
bankers could end up throttling a recovery. A new proposal from
the European Banking Authority (EBA) suggests changing the
definition of “material risk taker” to include any banker whose
total remuneration comes to more than 500,000 euros. Before, the
definition looked likely to rely on the interpretation of
national regulators.
New UBS is starting to work
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own
The new-look UBS is starting to deliver. The first full quarter of the strategy announced on Oct. 29 has broadly answered the Swiss bank’s critics. UBS shone in trading and capital markets financing, returning to its traditional strength in equities. Investment bank stability helped wealth management business too.
European banks turn tables on Wall Street
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Two of Europe’s biggest investment banking firms have defied fears they would fall behind Wall Street peers in the first quarter. Credit Suisse and Barclays succeeded in maintaining revenue in investment banking year-on-year, against an average drop of 7 percent among U.S. peers. Costs fell too. Given their recent history, the decision by both banks to maintain sizeable investment banking operations is controversial. But the numbers provide some justification.
Barnier broadside leaves EU looking soft on banks
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The European Union’s top financial regulator seems out of touch on banking reform. His peers want banks to keep more capital, but Michel Barnier says the United States should give European banks a break.
Breakingviews- Toyota-isation of banking brings reputational risk
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By Dominic Elliott
LONDON, April 19 (Reuters Breakingviews) – Forget fancy
financial models derived from quantum physics. The solution to
low returns in banking may lie in the car industry of 30 years
ago, in a Toyota-style production-line revolution replacing
people with machines.
Robin Hood tax needs carve-out for repo funding
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Europe’s Robin Hood tax needs a temporary carve-out for the funding of banks through repurchase agreements, known as repo financing. Over the longer term, it is a good idea for lenders to reduce the instant gratification that short-term wholesale funding provides. But with sovereign debt concerns lingering, it is too early to pull the rug out from under them.
Review: The Robespierres of central banking
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The most lasting inheritance of the 2008 financial crisis may be a change in the purpose of central banks. From the 1980s until 2007, most believed that monetary authorities should primarily use a policy interest rate to combat inflation. Interventions in the markets or in the financial system were outside the remit, or so the orthodox view went. Neil Irwin’s “The Alchemists” shows how that thinking has been turned on its head.
Malone swoop frees Barclays but traps Ziggo
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
John Malone’s latest swoop in the cable sector is true to form. The cable tycoon’s Liberty Global was sitting on a paper profit of over 40 million euros hours after buying a 12.7 pct stake in Dutch cable company Ziggo from Barclays on March 28. Malone has shrewdly exploited a forced seller, after Barclays was lumbered with the millions of Ziggo shares it failed to sell for the company’s private-equity owners days earlier. What’s more, he has plenty of experience in using blocking stakes as a takeover strategy.
Orcel bonanza shows how far banks must go on pay
By Dominic Elliott
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Andrea Orcel’s signing-on package shows the scale of the pay pickle facing banks. UBS stumped up $26 million to prise its investment-bank head from Bank of America Merrill Lynch last year, making a mockery of so-called retention packages designed to stop employees jumping ship. True, Orcel received no new cash or shares for joining his Swiss rival: the award simply replaces three years’ worth of pay he forfeited for leaving BAML. And the award can still be clawed back. But it shows how aggressive behaviour by just one bank can reinforce the industry’s pay problem.
-
Follow Dominic
