|Bid||6.91 x 2200|
|Ask||7.34 x 45100|
|Day's Range||7.11 - 7.34|
|52 Week Range||4.52 - 12.44|
|Beta (5Y Monthly)||1.76|
|PE Ratio (TTM)||5.37|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Aug 09, 2019|
|1y Target Est||8.80|
We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not […]
(Bloomberg) -- Wirecard AG expects its provisional insolvency administrator to be appointed shortly as the scandal-hit payment company said its business activities will continue.Once lauded as one of Germany’s most successful up-and-coming businesses, Wirecard filed for insolvency on Thursday after the company said that 1.9 billion euros ($2.1 billion) previously reported as cash on its balance sheet probably doesn’t exist.In a statement on Saturday, the company said its management board believes continuation of operations “is in the best interests of the creditors.” That includes its banking unit, which is currently not part of the insolvency proceedings.“The electronic funds transfer of Wirecard Bank are not affected,” the company said in the statement. “Payouts to merchants of Wirecard Bank will continue to be executed without restrictions.”Wirecard said on Thursday it’s ceding control of funds at its banking unit after Germany’s financial regulator stepped in to prevent the money from being deployed elsewhere at the company. Wirecard Bank AG is not part of that process and BaFin -- as the watchdog is known -- has appointed a special representative for the unit.How German Fintech Darling Wirecard Fell From Grace: QuickTakeThe fallout from the company’s shocking collapse reverberated over the weekend after Germany’s state-owned development bank KfW said it’s facing potential losses of 100 million euros from a credit line that its unit granted the company in September 2018.Other banks are on the hook for about 1.6 billion euros in loans, people familiar with the matter have said. The group of more than a dozen lenders led by ABN Amro Bank NV, Commerzbank AG and ING Groep NV were in negotiations with Wirecard aimed at keeping it afloat and were surprised by the insolvency filing, Bloomberg has reported.Despite claims to continue with business as usual, digital bank Curve temporarily froze services, Financial News reported on Friday, citing a company spokesperson. Curve is one of a number of U.K.-based fintech firms that relied on Wirecard’s services.Also on Friday Financial Conduct Authority, the U.K.’s financial markets regulator, imposed a number of requirements including that it must not dispose of any assets or funds. Wirecard is not supervised by the FCA.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The Philippine central bank cut its benchmark interest rate by a bigger-than-expected 50 basis points to support an economy facing its worst crisis in decades.Bangko Sentral ng Pilipinas lowered its key rate to 2.25% from 2.75% on Thursday. Only one of the 22 economists in a Bloomberg survey predicted the move, with 12 forecasting no change and the rest expecting a 25 basis-point easing.“The Monetary Board decided that a further reduction in the policy rate amidst a benign inflation environment would help mitigate the downside risks to growth and boost market confidence,” Governor Benjamin Diokno said in a statement.The Philippines is bracing for its deepest economic slump in more than three decades, with a contraction of 2% to 3.4% on the cards for this year. With limited fiscal support, the central bank is taking on the bulk of the stimulus burden in the Southeast Asian nation. It’s cut interest rates now by 175 basis points this year -- lowering by 50 basis-point increments in each of three latest decisions -- slashed reserve ratios for banks and pumped liquidity into the financial system.“Keeping an accommodative stance will further ease the cost of borrowing and ensure ample credit and liquidity in the financial system as the economy transitions toward recovery in the coming months,” Diokno said.The governor had earlier this month signaled his preference for keeping real interest rates above zero, fueling perceptions that there’s limited scope for more easing. With consumer prices rising 2.1% in May from a year earlier, the inflation-adjusted interest rate in the Philippines is now 0.15%.“With the economic outlook dimming, BSP opted to provide fresh stimulus to insulate the economy,” said Nicholas Mapa, a senior economist at ING Groep NV in Manila. “This is likely Diokno’s last move for the year, as he looks to preserve positive real policy rates.”Reserve RequirementThe central bank may have “room to accelerate” reductions to lenders’ reserve requirement ratio, but that depends on the outlook for liquidity and inflation, Deputy Governor Francis Dakila said in a virtual briefing Thursday.The peso closed little changed at 50 per dollar. The currency is among the top performers in emerging markets this year, rising more than 1% against the greenback.The rate cut will have “limited impact” on the peso, which will continue to be firm, said Mitul Kotecha, a senior emerging markets strategist at TD Securities in Singapore. “BSP did not ease reserve requirements, but we think another RRR cut will be forthcoming soon.”The central bank provided updated forecasts on inflation:CPI will average 2.3% in 2020, up from May’s projection of 2.2%Inflation will accelerate to 2.6% in 2021, up from a previous projection of 2.5%Elsewhere in the region, central banks have been driving interest rates down, but at a slightly more gradual pace. Indonesia cut rates last week for the first time in three months, while the Bank of Thailand on Wednesday left its rate unchanged at a record low.(Updates with comments from deputy governor and analyst.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
At 2 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.3% higher. France's CAC 40 futures were down 0.6%, while the FTSE 100 futures contract in the U.K. fell 0.5%. On Thursday around 400 workers at a slaughterhouse in northern Germany tested positive for the virus.
(Bloomberg) -- The European Central Bank reached another trillion-euro milestone in its fight to bolster economies that are seeing years of growth wiped out in months by the coronavirus pandemic.An offer for its ultra-cheap, three-year loans was taken up by 742 banks for a total of 1.31 trillion euros ($1.5 trillion) on Thursday. That’s in line with predictions of 1.2 trillion to 1.5 trillion euros.The loans are intended to ensure banks keep providing credit to companies and households to bolster the economic recovery from the pandemic. They carry an interest rate below zero that means the ECB is paying lenders to lend.The fresh wave of stimulus comes at a time when fear about a potential second wave of Covid-19 infections is stalking investor sentiment.The money also provides funding that could be used to buy higher-yielding assets such as Italian debt, complementing other ECB programs that aim to curb unwarranted market volatility.Read more: Why ECB Crisis Plan Means More Free Money for Banks: QuickTakeThree-month Euribor’s premium over swaps -- a proxy for funding stress -- stayed 2.5 basis points higher at 10 basis points, following the outcome. This left it above the lowest level since March which was set on Wednesday.“This should be taken positively,” said Antoine Bouvet, rates strategist at ING Groep NV. “The main impact is that the additional liquidity reduces overall risk in the system.”Italian bonds pared gains after the 2-year yield briefly fell to the lowest level since March. Three-month Euribor futures contracts which are tied to the funding rate erased their advance.The ECB is fighting to help European economies deal with the biggest contraction in living memory. The institution’s 1.35 trillion euro pandemic purchase program has served as a backstop to euro-zone debt markets, helping boost the appeal of even the riskiest of government bonds. Italy saw the yield on its benchmark bond tumble more than 150 basis points from its highest point in March.Yet Citigroup Inc. estimates that the recent 600 billion-euro increase in asset purchases could fall 150 billion euros short of the bloc’s overall increase in debt supply.Last week alone, sovereigns raised 32 billion euros from the sale of syndicated bonds, pushing total issuance in Europe to 1 trillion euros so far this year. A German auction this week sold the largest amount of 10-year bonds since 2014.Why TLTROs?Isabel Schnabel, the ECB’s board member in charge of market operations, said last week that surveys point to a take-up of around 1.4 trillion euros for its targeted loans, known as TLTROs, which hold offers every three months.Schnabel said in a tweet after the results were published that the operation will add a net 548.5 billion euros in liquidity.“It is certainly a positive development,” said Jaime Costero, rates strategist at UBS Group AG. “This should continue to support, mainly, front-end peripheral rates.”Strong demand should also provide reassurance that the policy remains a viable weapon in the ECB’s arsenal, alongside its emergency bond-buying.The potential significance for wider risk appetite from the TLTRO number has grown in line with concern that the global rebound since March’s lows could have run too far ahead of fundamentals. Any sign that the recovery could face a setback is likely to stand out more starkly against that backdrop.“Just stay long BTPs and if there are set-backs then you use this to add to the position” said Jens Peter Sorensen, chief analyst at Danske Bank A/S, referring to Italian government bonds. “If you cannot buy Italy, then go for Spain.”(Updates with market reaction and comments starting in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- UBS Group AG is setting aside hundreds of millions of dollars of its own money to invest in fintech companies, joining peers in financing startups that are upending traditional banking.The Swiss wealth manager is planning a corporate venture capital fund to make investments between $10 million and $20 million in dozens of companies, according to a person familiar with the matter. UBS plans to hold the stakes for at least five years, the person said, asking for anonymity because details haven’t been finalized.A UBS spokeswoman confirmed the bank is starting such a fund, while declining to comment on specifics.The venture fund comes just months after UBS named ING Groep NV’s Ralph Hamers, an outspoken champion of digital banking, to succeed Sergio Ermotti as chief executive officer from October. While wealth management -- UBS’s biggest business -- is traditionally a high-touch operation, with clients valuing personal contact, the coronavirus pandemic has accelerated a shift toward digital services.“UBS wants to further engage with and support fintech firms,” said Mike Dargan, UBS’s Global Head Group Technology. “The new venture investment portfolio is a next step to accelerate our innovation and digitization efforts.”Read more: UBS Names Outsider Hamers to Succeed CEO ErmottiThe new fund will look at three broad categories to invest in: client engagement, investing and financing platforms, and improving underlying operations of the bank. While it is already screening potential investments, the bank is still in the process of hiring a team dedicated to run the fund, the people said.More digital tools are a key part of a revamp plan for UBS’s wealth unit unveiled earlier this year. The bank wants to use them to save time on administrative tasks and cut costs, as competition for rich clients and a flight to cheaper, passive investment products erode profitability.Globally, U.S. banks have been at the forefront of spending on fintech, according to Bloomberg Intelligence. The firms are generally more profitable and can afford to plow large sums into such efforts. UBS’s Zurich rival Credit Suisse Group AG invests in fintech through its entrepreneur capital arm.U.S. Big Banks Drive Virtuous Cycle With Tech SpendingUBS is also looking to use technology to make inroads in the Chinese wealth market. The bank is in the process of acquiring a digital fund distribution license, which would provide a plain-vanilla fund offering to rich Chinese customers. Over time, UBS plans to use such a digital license to move into advisory and on-boarding of new wealth clients, according to Edmund Koh, UBS’s head for the Asia Pacific region.A previous effort by UBS in this area flopped. A 2017 internal project in the U.K. called SmartWealth was shut down a year later.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Large institutions resist change, and nowhere more so than in the way they pay their bosses.Despite scandals and crises, executive compensation has remained too generous, too opaque and too loosely linked to long-term goals. The upheaval wrought by the Covid-19 pandemic provides the opportunity for a remake: Simpler, smaller packages with a more significant non-financial component would mark a welcome shift.The figures are stark. Inflation-adjusted pay for chief executives at the largest U.S. companies climbed 940% between 1978 and 2018, the Economic Policy Institute found, using the more conservative of two methodologies, in a report published last year. The S&P rose about 700% over the same period. Worker wages, meanwhile, increased by less than 12%.The size of pay packages is only the most eye-catching part of the problem: Far more important is how corporate leaders are remunerated, and whether that lines up with long-term goals, financial and otherwise. As a gauge, consider the increase in attention paid to environmental, social and governance, or ESG, targets. This has permeated incentive plans in only a minority of cases. A mere 9% of FTSE All World companies link executive pay to ESG criteria, mostly occupational health and safety concerns, according to Sustainalytics. Even for those, only a tiny proportion of total remuneration is affected.The good news is that the current cataclysm is prompting better behavior than we saw during the 2008 financial crisis, with at least some leaders moving swiftly to share the pain of employees. Qantas Airways Ltd. Chief Executive Officer Alan Joyce, whose airline has furloughed most of its workforce, won’t take any salary until the end of the financial year in June. Elsewhere in aviation, Ryanair Holdings Plc CEO Michael O’Leary has taken a steep pay cut, along with staff. General Electric Co.’s Larry Culp will forgo his full wage for the rest of 2020.Granted, they have better cushions than most employees and there is self-interest here, given the outsize importance to corporate valuations of intangible assets like reputation. Yet these are welcome gestures, not least when compared to those who have rushed to cut costs and take government help without trimming at the top. They aren’t markers of real change, though. It will be far more significant to see how boards manage short- and long-term incentive decisions for 2020. Shareholder advisers are already warning against excesses in variable pay. There is one bigger reason to anticipate substantial change: timing. The coronavirus has hit at a critical moment for shareholder capitalism. It’s been two years since BlackRock Inc. co-founder Larry Fink told CEOs to contribute to society. The Business Roundtable last year had executives pledge to build companies that serve “all Americans.” ESG demands are louder, as seen at last month’s annual general meeting of Australian oil and gas outfit Santos Ltd. It was happening already; now it’s happening faster.Xavier Baeten, professor in reward and sustainability at Vlerick Business School in Belgium, says companies are likely to see pressure from at least two quarters. First, shareholders may well balk at remuneration that rises when dividends dissipate. Second, governments could make aid dependent on firms not paying bonuses. Society may also find hefty bonuses more unpalatable after months of clapping to support underpaid nurses and carers.So what are the changes to aim for? Pay is inherently complex, and investors can make multiple and often competing demands of one board. It’s also true that despite plentiful research demonstrating that pay isn’t a significant motivating factor for chief executives, the quantum is unlikely to change dramatically. There is, though, plenty of scope to improve structure.Most obviously, a post-pandemic world could do with a stronger push from board members (and investors) for increased transparency and simplicity, with fewer, more individually tailored goals. Then, we need share allocations that encourage executives to think over longer time-frames, and don't just result in colossal pay awards in boom years. This could mean more restricted stock that has to be held for a period even once employment has ceased. It could mean extending ownership requirements. There are plenty of pitfalls: Proxy advisers will need convincing, and long holding periods can mean executives discount the perk. The advantages are significant, though.A third step could be to increase the non-financial portion of targets to as much as half of the total. Again, these aren’t popular with advisers who dismiss what they see as soft goals. Still, as compensation consultant Seymour Burchman of Semler Brossy argues, they reinforce strategy if tailored, specific and measurable. Dutch bank ING Groep NV, for example, uses retail customer growth as one measure. Others might use customer satisfaction, investment targets, total recordable injury frequency rate or, as Semler Brossy’s Kathryn Neel points out, corporate reputation, as gauged by a third party. ESG would be part of this, in a testable and appropriate form that measures opportunity as well as risk. For resources companies, that could be a multiplier that nullifies all bonus in the event of an accident. For a drinks company, it might be water management, or reducing plastic. Combined with the obligation to hold shares for longer, the incentives align.Shareholders’ meetings globally have been delayed or moved online because of the coronavirus, but there is plenty more disruption to come. Boards, the ultimate arbiters, will find decisions this year have lasting consequences. In a crisis, underestimate pay at your peril.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term ING...
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of ING Bank N.V. - Sao Paulo and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
Coronavirus is probably the 1 concern in investors' minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 […]
(Bloomberg Opinion) -- Standard Chartered Plc may have many failings. At least it has a leader.The London-based emerging markets bank run by Bill Winters hasn’t had the best of years, and the outlook, with so much exposure to virus-affected Hong Kong, is looking grim.It does, though, have a stable team, led by a CEO about to complete five years in the job. That puts the bank in a better place than traditional rival HSBC Holdings Plc, which is undergoing a radical overhaul with 35,000 job cuts under caretaker CEO Noel Quinn.On Thursday, StanChart posted full-year underlying pretax profit of $4.2 billion, slightly behind the consensus forecast of $4.3 billion, and announced a $500 million buyback. That was less than the $1 billion analysts had expected. The bank salved the disappointment by hinting that it will return more capital to shareholders after completing the sale of its stake in Indonesia’s PT Bank Permata. There’s no share buyback in the works at HSBC.Standard Chartered said that the coronavirus outbreak will delay its target of a 10% return on tangible equity by 2021. The epidemic has led to a shutdown of factories in China and wide-ranging travel disruption that has interrupted global trade. Its warning mirrors that from HSBC, which said last week that the outbreak could lead to as much as $600 million in additional loan losses if it continues into the second half of the year.Having Winters at the helm gives StanChart an edge — and not just over HSBC. Several other European banks have new or no heads. Earlier this month, Credit Suisse Group AG named a new CEO after ousting Tidjane Thiam over a spying scandal; UBS Group AG poached ING Groep NV Chief executive Ralph Hamers; Barclays Plc, according to the Financial Times, is looking for a replacement for Jes Staley, who’s preparing to retire from the bank next year amid allegations of links to sex offender Jeffrey Epstein.Winters hasn’t exactly had a chummy relationship with investors. He took a pay cut after shareholders complained about his high pension allowance last year, a revolt that he initially criticized as “immature and unhelpful.” To put that painful episode behind him, the CEO will need to offer a meaningful increase in shareholder returns from last year’s 6.4%, two percentage points lower than HSBC.Unfortunately, this is unlikely to be the year. As with HSBC, Hong Kong is StanChart’s single biggest market. Before the impact of last year’s anti-government protests could fade, the coronavirus has arrived to threaten the economy again. The outbreak will also hurt Singapore, another key market.All the same, if and when he leaves Winters will in all likelihood hand over a more solid franchise than he received. When he joined in June 2015, StanChart was neck deep in bad corporate loans in India and Indonesia. That problem is in the rearview mirror now. Even though the loan loss rate ticked slightly higher last year, it was just over half what it was two years ago. While asset quality pressures may rebuild because of the supply-chain disruption from the coronavirus, at least the bank’s ability to endure as an independent institution is no longer in doubt. Having made a mark as a digital lender in underbanked Africa, StanChart is now in the fray to open an online-only bank in Hong Kong. Given the aging demographics of its existing client base in the former British colony, going after more millennials and Generation Z customers may be a smart move.Asia is the biggest profit pool for banks worldwide. But growth is slowing and competition from fintech is on the rise. With global interest rates once again going limp, there’s little hope for boosting profit margins. While Winters can perhaps keep a tight leash on costs, he may not be able to pare them any further. Having pushed back the 10% return on equity target to beyond next year, even juicy buybacks won’t keep investors from souring on the one CEO who — to borrow from a StanChart advertising tagline — seems to be here for good. Or as close to that as it gets in European banking nowadays.To contact the authors of this story: Nisha Gopalan at firstname.lastname@example.orgAndy Mukherjee at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- After being ruled by effectively the same coalition for 61 years, Malaysia just witnessed the alternative collapse in less than two. The crisis sparked by the shock resignation of the 94-year-old prime minister, Mahathir Mohamad, and how it’s resolved will grab all the attention for now. But the arrival of short-cycle politics will cast a long shadow over the Southeast Asian nation and investors will reset their antennae.Mahathir ruled from 1981 until retirement in 2003, only to return 15 years later to cause the biggest electoral upset in Malaysia’s history. But while his latest government did make an early attempt to remove politicians from state-linked companies and disallow “support letters” that help favored businessmen win contracts, institutions in Malaysia remain far too unreformed and weak to withstand prolonged political flux. What happens next is unclear, though an investment recovery this year can be easily ruled out. Mahathir might yet cobble together the 112 lawmakers needed to form the next government. Or, he may back someone other than Anwar Ibrahim, to whom he was supposed to hand over the top job after about two years. But the prime minister obviously didn’t like his new partner and old enemy enough to commit to a transition date. (Mahathir fired Anwar, who was his chosen successor, in 1998 during the Asian financial crisis. Anwar was imprisoned on convictions of corruption and sodomy that he said were a plot to remove him from politics). The 72-year-old Anwar could take a shot at power, though he looks resigned to not becoming the eighth prime minister of independent Malaysia. “Maybe the ninth,” he said at a prayer ceremony at his home as the fall of Mahathir’s government looked imminent. His party, which was allied with Mahathir in an unwieldy coalition, has split. Economic Affairs Minister Azmin Ali, who was also jockeying for the top job, left with a small breakaway faction of 10 other lawmakers.The long-ruling Barisan Nasional regime, which was Mahathir’s political home before he fell out with his successors, is now back in the frame. Backing Mahathir — or his appointee — against Anwar may be the best chance for its elites to revive the old order. The coalition lost its stranglehold on power in 2018 because of popular disgust against then-premier Najib Razak over a scandal in which $4.5 billion was allegedly stolen from the 1Malaysia Development Bhd, or 1MDB, state investment company and laundered around the world. Najib is on trial for a range of related crimes; the former prime minister rejects the allegations against him.Whatever the outcome, it looks likely that the new dispensation will seek legitimacy by aligning itself with the Malay-Muslim majority. The ethnic Chinese and Indian minorities, which had long hoped that Anwar would get a chance to fulfill his promise of making economic entitlements needs-based, rather than centered on race, will be disappointed. Decades of pro-Malay policies forged in great part under Mahathir have encouraged rent-seeking while prompting young, educated and disillusioned minorities to seek their fortunes elsewhere.When it comes to spawning new-age digital companies, the country is lagging behind its neighbors. Smaller Singapore and poorer Indonesia are both doing better, despite Malaysia making an early start to industrialize its traditional oil and plantation economy. Any emerging coalitions will be too vested in the status quo of public construction contracts to seek a course correction. Unstable administrations also tend to be myopic about spending and taxation. One of the first things Mahathir did upon his May 2018 return was to scrap the goods and services tax, which had lowered Malaysia’s budgetary reliance on its aging oil fields. The GST was deeply unpopular because it was perceived to have raised the cost of living. But Malaysia’s high investment-grade rating probably won’t survive the global electric-vehicle revolution without more diversified sources of government revenue. It’s unclear how committed a new finance minister will be to medium-term fiscal goals. What should investors make of this muddle? Most of the reassessment may occur in the price of the currency as foreigners get cold feet. Malaysian government debt, on the other hand, might remain in demand from local retirement funds.A slowing economy, which is already starting to weigh on the under-performing equity market, could support bonds. The coronavirus outbreak in China, which absorbs more than a fifth of Malaysian exports, is threatening to crush gross domestic product growth this year to 3.5%, according to ING Groep NV, its slowest since the global financial crisis.But just as neighboring Singapore rolls out billions of dollars in fiscal relief to mitigate the impact of the epidemic, decision-making in Kuala Lumpur is suddenly imploding, with Mahathtair continuing only as interim prime minister. The economy this year could well become an early victim of Malaysia’s shortening political cycle.To contact the author of this story: Andy Mukherjee at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- European banks have a problem with their boardrooms.From the Anglo-Asian giant HSBC Holdings Plc to Spain’s Banco Santander SA and Switzerland’s Credit Suisse Group AG, a troubling phenomenon has become apparent at many of the region’s lenders: the weakness of the body tasked with ensuring the company’s success.Bankers are already under pressure because of rock-bottom interest rates and digital disruption, so it’s far from ideal that their boards appear slow, clumsy and overly beholden to their chief executives. Proper corporate governance matters as much now as it did during the financial crisis. While lenders may be simpler and safer by some measures, they’re still impenetrable to the outside world, and new risks are always emerging. Their CEOs need to be chosen, managed and held in check more effectively.An endless series of boardroom dramas has beset Europe’s banks in the past year. Consider HSBC. the continent’s biggest lender has just embarked on its biggest overhaul in decades (its third attempt to adapt to the post-crisis era), a plan that involves tens of thousands of job cuts, scrapping buybacks and reallocating capital to more profitable businesses. It’s hardly the time to be leaderless.Yet six months after ousting CEO John Flint, who only held the job for a year and a half, HSBC’s board hasn’t made up its mind whether it wants to give his interim replacement Noel Quinn the job, or to hire externally.In fairness, finding the right boss for a sprawling bank with a $2.7 trillion balance sheet is the most important task of the board and Chairman Mark Tucker — alongside setting the strategy. It mustn’t be rushed. But a strategic overhaul of this magnitude needs a leader who owns the new plan. The longer the appointment drags out, the tougher it will be for Quinn to execute; and the harder it would be for a credible external candidate to implement someone else’s turnaround story. The board has given itself until as late as August, but time isn’t on its side after the favorite outside candidate, UniCredit SpA’s Jean Pierre Mustier, committed himself to his current employer.HSBC’s board is in fine company when it comes to messy situations. At Barclays Plc, another regulatory probe into CEO Jes Staley — this time looking at his relationship with the disgraced financier Jeffrey Epstein — raises questions about oversight at the top of the firm. Staley was fined previously for attempting to unmask a Barclays whistleblower. The London-based bank took two months to go public on the latest inquiry, and it hasn’t shared details of its own review into the CEO’s relationship with Epstein. While one shouldn’t jump to conclusions, more transparency from the board would have been invaluable to investors.Elsewhere, the Credit Suisse board hardly covered itself in glory during a months-long spying scandal that cost CEO Tidjane Thiam his job. While Thiam was cleared of knowing about the surveillance operations against employees, past and present, it’s pretty damning that neither he nor the board were aware of those activities being carried out by key personnel. The Swiss giant’s directors must share responsibility for an episode that damaged the bank’s reputation and upset employees.In April, Santander faces its own embarrassing showdown in a Spanish court. After withdrawing its offer of the CEO post to Andrea Orcel — the former head of investment banking at UBS Group AG — over a disagreement on pay, Santander is being sued by Orcel for more than 100 million euros ($108 million). Why Santander would have agreed to honor UBS’s generous financial obligations to Orcel, and then withdrew the proposal, is unclear. A detailed account of alleged text messages between Santander Chairman Ana Botin and Orcel and his wife, published by Reuters, points to personal relationships possibly playing a bigger role than they should have in a CEO appointment.For its part, UBS botched its own internal CEO succession plan, and eventually hired Ralph Hamers from ING Groep NV — despite the Dutch bank’s failings over money-laundering and Hamers’s lack of experience in UBS’s core businesses. That was a controversial move by the directors of the world’s biggest wealth manager. In the age of the “purposeful company,” bank boards should be leading the way on properly representing their shareholders, as well as employees and society. It isn’t obvious whose interest they’ll serve by remaining so ineffective. To contact the author of this story: Elisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- If you’re a banker sitting somewhat idle at UBS Group AG, you may be feeling vulnerable today. The Swiss giant has picked Ralph Hamers — an outsider credited with making ING Groep NV one of Europe’s most digitally savvy and cost-efficient banks — as its new chief executive officer. That sets a clear strategic direction for UBS.The lender is turning to an experienced hand in trimming costs and using machines instead of humans. Still, beyond the obvious signals about how UBS intends to defend its bottom line in the future, it’s hard to portray the recruitment of the 53-year-old Dutchman, a lifer in banking, as a truly radical choice at a time when the robots are taking over finance. As Morgan Stanley’s $13 billion acquisition of E*Trade Financial Corp. shows, managing wealth in the future will involve a considerable degree of technology nous and automation. Hamers did well by introducing popular banking apps for ING’s retail customers, but servicing the rich is a different game.Plus, with the boardrooms of some of Europe’s biggest banks mired in controversy, the arrival of the former ING CEO will raise a few eyebrows: The Dutch lender had to pay $900 million to settle an investigation into alleged money-laundering.After successfully turning around UBS by shrinking its trading business and expanding in private banking, outgoing CEO Sergio Ermotti has taken his foot off the pedal somewhat recently. The $2.6 trillion wealth manager hasn’t adapted as swiftly as competitors to negative interest rates and the firm’s bloated costs have hit its profitability.So hiring someone from outside Swiss financial circles will at least bring some kind of break. A focus on operational costs has helped another Swiss bank, Credit Suisse Group AG, and Italy’s UniCredit SpA.While it’s not entirely obvious that Hamers can replicate at UBS what he did in Dutch consumer banking, his laser focus on expenses will be positive. The appointment also ends uncertainty about the leadership of the Swiss bank, where half the executive management team has changed in the past two years.Hamers is certainly experienced, having spent almost three decades at ING, including six as CEO, but he’s never cut his teeth running an investment bank. That unit soaks up 30% of UBS’s risk-weighted assets and is generating returns that even Ermotti deems unacceptable. Nor has the new man run a wealth management business, which makes up about 60% of UBS’s profit. Barclays analysts noted that none of the investors they’d spoken to had named Hamers as a potential Ermotti successor.Then there’s ING’s patchy record of oversight and controls. In 2018, the Dutch lender agreed to pay that $900 million to settle an investigation into corrupt practices by former clients. The bank was also reprimanded by its regulators over the money-laundering scandal. Its chief finance officer had to leave.In fairness, it’s hard to find a senior banker with a question-free past right now: Nordic banks have been embroiled in money-laundering scandals too; Credit Suisse ousted CEO Tidjane Thiam amid a spying scandal; and Barclays Plc’s CEO is being probed by British regulators over his ties to the deceased financier Jeffrey Epstein.Hamers arrives with many of the right attributes for the job, and UBS investors pushed up the share price on Thursday. UBS Chairman Axel Weber says his new CEO will have learnt from the money-laundering debacle. But this is a very big beast to get right. To contact the author of this story: Elisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
ZURICH/AMSTERDAM (Reuters) - UBS <UBSG.S>, the world's largest bank to the rich, named the head of ING <INGA.AS> as chief executive on Thursday, seeking to tap his tech knowledge after he transformed the Dutch lender into one of Europe's most successful online banks. Ralph Hamers' appointment heralds a shift in focus for the Swiss bank, which historically relied on its bankers' personal attention to customers to build a group managing more than $2 trillion of investments. ING, by contrast, is better known for its brash orange logo, mobile apps and online loan applications.
Announcement: Moody's: No Rating impact on GNB Auto Plan 2017 sp. z o.o. following the replacement of the back-up servicer. Global Credit Research- 04 Feb 2020. Frankfurt am Main, February 04, 2020-- Moody's ...