MADRID | April 13, 2015 | Fernando G. Urbaneja | This month Telefónica will complete two capital increases of both the parent company and its Brazilian subsidiary, seen as necessary steps in the reconfiguration of the company following its exit from some markets (Italy and UK) and consolidation in others (Brazil and Germany).
MADRID | April 8, 2015 | By Sean Duffy | The takeover of BG by Royal Dutch Shell for £47 billion (€64.8 billion) could be the opening salvo in a race to hoover up energy firms, as oil giants look to take advantage of a liquidity glut by honing in on companies destabilised by the volatility on oil markets.
The Corner | March 27, 2015 | The sale by Telefónica of O2 UK will allow the company to focus attention on its growing operation in Germany. Telefonica will now go toe-to-toe with Vodafone and Deutsche Telecom, as the three mobile giants vie for supremacy in the eurozone’s largest economy.
LONDON | Guest comment by Barclays | The financial success of Sabadell’s offer to acquire TSB hinges on its ability to cut TSB’s costs by 20% almost exclusively by migrating it onto a new IT platform, in our view. This looks a challenging aspiration to us and while Sabadell has successfully integrated domestic Spanish acquisitions at some speed, cross-border integration onto the Spanish platform is largely untested and faces the challenges of a different regulatory framework and different product design. It clearly helps that Lloyds will pay for the integration spend but we believe that meeting the near-term target of EPS neutrality will require a relatively quick delivery of the cost savings.
The Corner | March 20, 2015 | ACF experts believe that “the impact of the acquisition of TSB in earnings per share would be marginally negative in 2015 and 2016, but -5.7% in 2017 if a new synergy plan is not presented.”
Exane BNP Paribas | Following the appointment of Tidjane Thiam as group CEO, there is more scope for a shift in strategy away from the investment bank and towards the wealth management business. Many investors compare this to when UBS announced their restructuring in 2012. In theory this should free up capital, and reduce the volatility of the earnings, enhancing the valuation. This sounds good so far, but we have to look at some numbers.
MADRID | March 16, 2015 | By Fernando G. Urbaneja | The hardest hit stock on the Ibex 35 last week was Sabadell bank, with the lender losing 7% of its valuation after news emerged of a pending takeover bid for British bank TSB.
MADRID | March 13, 2015 | By JP Marín Arrese | The quantitative test conducted under the Dodd-Frank Act showed a comfortable capital cushion for all eligible banks. Yet both Santander and Deustche Bank subsidiaries blatantly failed the qualitative review undertaken by the Fed under the Comprehensive Capital Analysis and Review (CCAR). In short, the banking supervisor considered their capital plans and risk management to be utterly inconsistent. It has delivered a damaging blow that should prompt swift action to redress such an appalling outcome. Santander has already announced a major overhaul in its US banking arm, but the Group as a whole badly needs to address its failures.
The Corner | March 12, 2015 | Santander Holding USA and Deutsche Bank Trust Corporation have been singled out by the US Fed over risk management and capital strategies. However, solvency of both entities is not questioned – their current solvency ratio exceeding the minimum asked by the Fed (5.0%).
BNP Paribas | March 11, 2015 | Fashion companies are showing their prudent confidence, pushing more sales through their stores, pricing, product innovation, digital and self-help. The sector is experiencing a rebound triggered by the ECB’s intervention and the euro weakness.