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JPMorgan's corporate and investment bank has been recognized as the best in the industry, thanks to its integration of commercial banking. Despite challenging market conditions, the bank had a successful year in 2023 and its reorganization in 2024 has positioned it well for the future. JPMorgan's investment banking division outperformed its competitors in various areas, thanks to its focus on strong client relationships and ability to navigate uncertain markets. The bank is committed to delivering value to its clients and continuously improving its services. JPMorgan's markets business has made progress in market-making for European government bonds, supranational issuers, and commodities trading. The bank is also integrating its commercial and investment banking activities to strengthen client relationships. While facing competition from traditional investment banks and non-bank players, JPMorgan's breadth and depth, along with its strong institutional presence, remain its biggest strengths. The bank is investing in electronic trading and automation to enhance its offerings and stay relevant in the market. [Extracted from the article]

Man Group, the world's largest listed hedge fund, is adapting its structure and approach to meet the changing priorities of asset allocators. Clients now prioritize market complexity, technology, and customized solutions. Man Group has invested heavily in technology and employs a large number of quants and technologists. The firm's solutions business, which offers customized investment options, has been a major driver of its growth. Man Group is divided into three main areas: systematic, discretionary, and solutions. The firm continues to prioritize technology and investment in order to maintain its edge in the industry. The CEO of Man Group, Sandy Desmyter, discusses various topics in an interview, including the impact of the pandemic on the financial sector, the attractiveness of the UK equity market, investor appetite for credit, and the use of artificial intelligence in the industry. Desmyter emphasizes the importance of managing counterparty risk and maintaining a strong company culture. He expresses confidence in Man Group's position in the market but acknowledges the need to avoid jeopardizing what is working well. [Extracted from the article]

Citizens Financial Group, despite losing out on acquiring First Republic Bank, has not given up on its private banking ambitions. The bank appointed Susan deTray, a former executive at First Republic, as the head of its new private bank. First Republic faced challenges that led to its collapse, creating an opportunity for Citizens to expand its wealth management division and establish a presence in private banking. Citizens Private Bank launched in October 2023 and has already raised over $1.2 billion in deposits. The bank aims to provide personalized service and integrate its consumer bank, commercial bank, and wealth management unit to cater to high net-worth and ultra-high net-worth customers. [Extracted from the article]

Byline: Mark Baker A quick reaction to warning signs in Asia meant Atlantic Natural Foods was better positioned than some to deal with Covid-19 Ç' but it still needed flexibility [...]

Byline: Mark Baker Bill Demchak, CEO of PNC Financial Services, has spent years building the firm into a formidable force; its exit from BlackRock now sees it on the cusp [...]

Byline: Mark Baker How one US health-insurance plan looked after itself and the providers its policyholders rely on when routine treatment demand started to dry up. When Emily Glidden realised [...]

Byline: Mark Baker A trend that was already under way is set to accelerate as companies realise the importance of better oversight of day-to-day financials. Corporate treasuries, which were already [...]

Byline: Mark Baker The European Central Bank's purchase of more than é¼35 billion of commercial paper since late March shows just how rocky the early stages of the Covid-19 crisis [...]

Byline: Mark Baker Capital markets volumes show how well the industry has adapted since the coronavirus crisis began, but as economies emerge from lockdown, bankers and their clients need to [...]

Byline: Mark Baker Banks have to prepare for crises; if investors wonÇÖt make companies do the same, should someone else? HOW COVID-19 WILL TRANSFORM THEFINANCIAL MARKETSHow does banking come back [...]

Byline: Mark Baker Capital markets bankers and their clients are finding that a lot can be done from home; as lockdowns ease, travel will matter more than offices. HOW COVID-19 [...]

Byline: Mark Baker The UKÇÖs Financial Conduct Authority may struggle to show anything explicitly wrong in the awarding of recent equity mandates. Read all Euromoney coronavirus coverage The Financial Conduct [...]

Byline: Mark Baker Weight a business towards structured products, and life can quickly get uncomfortable. Selling volatility is a dangerous game. Having a little of it around is a good [...]

Byline: Mark Baker After brief illnesses, JPMorganÇÖs Jamie Dimon and Morgan StanleyÇÖs James Gorman were back on form in this monthÇÖs earnings calls. Read all Euromoney coronavirus coverageThe US bank [...]

Byline: Mark Baker Four months after the start of the coronavirus outbreak, financial assistance from the World BankÇÖs pandemic bonds is about to find its way to poor countries to [...]

Byline: Mark Baker Some parts of US investment bank earnings in the first quarter of the year looked more like boom than bust as record trading and debt issuance helped [...]

Byline: Mark Baker The World Bankâ's pandemic bond has failed to pay out to poor countries at its first opportunity, a predictable result of designing a structure dependent on the [...]

Byline: Mark Baker Diversify or specialize: that has been the question for all the big global corporate and investment banks since the financial crisis of 2008 â we delve into [...]

Byline: Mark Baker With offices deserted across the world as coronavirus takes its toll on traditional processes, the recent transformation of a 50-year-old financial printing firm into a leading virtual [...]

Byline: Mark Baker A blizzard of monetary and fiscal policy announcements finally began to calm market nerves this week; but bankers and analysts are struggling to figure out what more [...]

Byline: Mark Baker There are legitimate criticisms of pandemic bonds, but the lunatic conspiracy theories online amid the coronavirus panic are damaging; the World BankÇÖs failure to refute them clearly [...]

Byline: Mark Baker The answer is not as simple as you might hope. Note: This story was first published on March 4 but will be updated regularly as new data [...]

Byline: Mark Baker The new aid is targeted at developing countries; demand is already seen in all regions. The World Bank has stepped in to intervene in the coronavirus Covid-19 [...]

Byline: Mark Baker JPMorgan doesnÇÖt do things by halves; it has just moved almost everyone at the top of its investment bank and created what amounts to an internal boutique. [...]

Byline: Mark Baker In its global markets division, the bank faces its toughest task in its quest to deliver greater shareholder value What do you do with a problem like [...]

Byline: Mark Baker The bank says it remains committed to excellence, but its biggest pitch seems to be that it doesnÇÖt feel the need to be the leader in everything [...]

Byline: Mark Baker The co-head of investment banking wants the firm to 'win by more' in the businesses where it already leads, but ramp up its client coverage overall - [...]

Byline: Mark Baker In applying for exemption to the requirement to disclose an ETFâ's portfolio, Goldman Sachs joins a small group of firms testing a new approach. Goldman Sachs has [...]

Byline: Mark Baker FASB chair grilled by US lawmakers over implementation cost of new accounting rules. Strong performances by JPMorgan and Morgan Stanley, and disappointments at Goldman Sachs, dominated commentary [...]

Byline: Mark Baker The traditional debt specialist is aiming to round out its growing European franchise with an equity capital markets advisory business. Debt restructuring and advisory specialist Houlihan Lokey [...]

The article discusses the upcoming transition from a two-day settlement period to a one-day settlement period for securities transactions in the US, Canada, and Mexico. The shift to T+1 will have a significant impact on the securities services industry, particularly in terms of trade confirmation and settlement functions. Challenges include time zones, business hours, and potential increase in settlement fails. The UK and Europe are considering their own transitions to shorter settlement periods. The move to T+1 settlement in the US is causing concerns and challenges for global finance, including counterparties' ability to adapt and availability of foreign exchange liquidity. The article also discusses the challenges and implications of shortening settlement cycles, including stress, increased settlement fails, and the need for standardization and agreement on trade data. The move to faster settlement cycles would require significant changes and coordination across the industry. [Extracted from the article]

Morgan Stanley has settled charges brought by regulators over the leakage of confidential information by the bank's former head of US equity syndicate and another employee. The charges describe a pattern of behavior between 2018 and 2021 where the employees routinely leaked details of upcoming block trades to buy-side contacts, allowing them to short the stocks in the market and cover those shorts through allocations from Morgan Stanley. The bank agreed to pay approximately $250 million to settle the charges. The investigation revealed that Morgan Stanley's claims of expertise and adherence to confidentiality were contradicted by the actions of its employees. [Extracted from the article]

Euan Munro, CEO of Newton Investment Management, believes that active investors can make a significant impact on companies by helping them transition to environmentally friendly practices. He emphasizes the importance of incorporating environmental, social, and governance factors into investment decisions, as these issues pose financial risks. Munro rejects the idea that small investors cannot make a difference and suggests that engaging with companies as shareholders can be more effective than pressure groups. He acknowledges the politicization of sustainable investment but states that his firm has successfully explained its approach to clients. Munro also discusses the decline in the UK equity market's appeal, attributing it to factors such as domestic holders shifting out of the asset class and overseas investors avoiding the market due to instability. He suggests market reforms to improve access to equity capital for smaller companies. [Extracted from the article]

Barclays CEO CS Venkatakrishnan is facing the challenge of improving the low returns of the bank's investment division. Despite the investment bank's strong performance during the pandemic, investors remain skeptical about its ability to compete with larger US-based banks. Venkatakrishnan is focusing on improving efficiency and reallocating resources to higher-returning businesses within the bank. However, there are doubts about the feasibility of the bank's targets, as they rely on assumptions about market conditions and capturing a larger share of the banking wallet. Overall, the plan faces challenges, and investors may prefer to wait and see before making judgments. [Extracted from the article]

Goldman Sachs CEO David Solomon has faced challenges in transitioning the firm's strategy, particularly in consumer banking. However, the firm's focus on investment banking and global markets remains strong, and there is optimism about its future performance. Despite internal disagreements and media attention surrounding Solomon's side gig as a DJ, Goldman Sachs continues to perform well and compete with other major banks. The firm's leaders believe that its strong position and combined divisions will contribute to its success in the future. Goldman Sachs aims for a firm-wide RoE target of 14% to 16% and is focusing on rejigging its balance sheet, growing management fees, and building the financing side of its global markets business to achieve its targets. The bank is frustrated that it is not receiving the same valuation as Morgan Stanley, despite outperforming in banking and markets. Goldman Sachs is also concerned about the potential impact of increased capital requirements under Basel III regulations, but believes it can optimize risk-weighted assets and leverage its brand to attract business even in a challenging environment. The bank values continuity and is unlikely to make knee-jerk reactions to speculation about succession and co-CEO arrangements. [Extracted from the article]

Jane Fraser, CEO of Citi, is working to redefine the bank's identity and improve its performance. She is focused on simplifying the organization and increasing efficiency through reorganization. Fraser aims to attract investors and improve the bank's performance by emphasizing its international network and key business divisions. However, Citi's history of reorganizations and challenges in finding an identity raise questions about the success of these efforts. Additionally, Citi is undergoing transformations in its markets business and wealth management division, with a focus on improving returns and increasing revenue. The bank is investing in technology to enhance client service and address the digital divide in underserved communities. [Extracted from the article]

On June 30, 2023, the US dollar London Interbank Offered Rate (Libor) bank panel stopped publishing its rates - or "settings", as they are more properly known. The impetus to move the financial industry away from Libor emerged out of the 2008 global financial crisis, after which regulators determined that the methodology governing Libor rates - submissions made by banks of the theoretical rates at which they might lend to one another - lacked rigour at best and was easily manipulated at worst. The rate finally recommended by the Alternative Reference Rates Committee (Arrc) - a body established by the Federal Reserve in 2014 - was the Secured Overnight Financing Rate (Sofr), the rate to which most of the dollar market has transitioned. In 2020, the Fed, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued a statement stressing that they were not recommending a specific Libor replacement rate for loans and that "a bank may use any reference rate for its loans that the bank determines to be appropriate for its funding model and customer needs.". [Extracted from the article]

It was on the weekend of March 24, 2023 - when the cost of insuring Deutsche Bank bonds against default had rocketed and its crashing share price had shaved more than €1.5 billion from its value - that Christian Sewing knew the bank he led had turned itself around. Sewing's focus on targets has not been sufficient to ensure that the bank met its own supervisory board's expectations of cleaning up weaknesses in the bank's controls in the projected timeframe. It looks to have done for Deutsche, at least, although the bank's results are noisier than some because it puts leveraged finance markdowns through its debt capital markets line, which not all banks do. "What I wanted to achieve with the transformation was to re-establish a global bank but with a balanced business in the private bank, in the corporate bank, with asset management and a focused but successful investment bank", Sewing says. [Extracted from the article]

A note from JPMorgan to its private-bank clients in April said that concerns about the balance-sheet vulnerabilities of smaller US banks had some merit, since "small banks hold 4.4 times more exposure to US CRE loans than their larger peers", with an average of 28.7% of assets, compared with 6.5%. And with bank loan delinquency rates lower than that, Lonnie Hendry, head of CRE and advisory services at Trepp, reckons the overall rates for offices are still below 2%. "A lender might have a loan that meets their criteria and is not criticized", says Hendry, "but if they refinance and it goes into a higher LTV level, it can put additional pressure if that means the lender has a higher concentration of loans outside its comfort zone." "As deposits fall, banks are going to be more skittish about which loans they will be prepared to make when they are talking to borrowers about refinancing, especially given how rates have risen. [Extracted from the article]

Byline: Mark Baker Barclays CEO Jes Staley has moved quickly to fill the top positions of his management team, with one big exception. Tom King retired in March There is [...]

There is a narrative that direct lenders have been dramatically stepping into the hole left by shuttered markets in syndicated leveraged loans and high-yield bonds. In a bind: CLOs struggle with technicalities The market for leveraged finance has not been helped by the reduction of appetite in 2022 to invest in collateralized loan obligations (CLOs), a $1.2 trillion market of vehicles that buy leveraged loans and which own about 70% of the market, according to Bank of America. One banker describes a deal for a US sponsor that recently wanted an incremental loan of just $100 million added to an existing $1 billion term loan B. "Of more than 10 direct lenders that were approached, only three stepped up, and then only for $50 million", says the banker. [Extracted from the article]

Deutsche Bank and Barclays, two European banks, are both working to reduce their reliance on investment banking and strengthen other areas of their businesses. Deutsche Bank has been restructuring since 2019, while Barclays' CEO began implementing changes in 2021. Despite their efforts, both banks still heavily rely on their investment banking divisions for performance. Deutsche Bank's investment bank accounted for 57% of the group's total profits, while Barclays' investment bank accounted for 48%. Both banks saw positive results in the first quarter of 2024, with Deutsche Bank's investment banking fees rising by 67% and Barclays' rising by 2%. [Extracted from the article]

Citigroup has appointed Viswas Raghavan, a former JPMorgan executive, as the new head of its banking division. Raghavan's appointment is seen as a significant move by CEO Jane Fraser to turn around the bank's fortunes and improve its reputation among investors. Raghavan's extensive experience in transactional and operational management, as well as his seniority in the industry, make him a valuable addition to Citi. His role will involve overseeing the investment banking business and ensuring connectivity between different divisions of the bank. While the impact of Raghavan's appointment on Citi's investment bank remains to be seen, Fraser's decision to hire him demonstrates her ability to attract top talent and signals her commitment to making necessary changes within the bank. [Extracted from the article]

The article discusses the concept of "private IPOs" and the challenges of the public market. While the idea of private IPOs is semantic nonsense, it highlights the issue of companies being brought to market that are not ready or suitable for an IPO. The article also addresses the perceived state of public IPOs, particularly in Europe, and argues that there are clear signs that the IPO market is receptive to good businesses if they are priced sensibly. It emphasizes the importance of reasonable expectations on price and distribution to the right buyers for successful IPOs. [Extracted from the article]

The investment bank may be set to become a more peripheral part of the group, accounting for less than 20% of risk-weighted assets (RWAs) by 2025, down from 32% today, but the resetting of CS First Boston is central to making what Lehmann and Körner want us to call New Credit Suisse. Credit Suisse keeps its options open Michael Klein, former co-head of the corporate and investment bank at Citi, will now step down from the board of Credit Suisse and run CS First Boston. We are led to believe that this is a highly profitable business - although Credit Suisse won't break out its P&L, perhaps because that might show it as the only profitable part of the investment bank - just one that requires more capital and funding than Credit Suisse can commit. [Extracted from the article]

Capital markets A company best known for its pricey supercars seems an unlikely name to bring to Europe's equity capital markets in the teeth of a cost-of-living crisis. Setting aside the cornerstone shares, the stock sold to public market investors through the IPO amounts to just 14% of Porsche AG's preferred stock and therefore about 7% of the company's total share capital. The history of the relationship between Porsche and VW is colourful, with its most turbulent episode playing out in the teeth of the global financial crisis in 2008, when Porsche was building a stake in VW that culminated in one of the most dramatic short squeezes in history. Early 2009 saw the two companies reach a merger agreement, which after several years eventually saw Porsche SE owning 51% of VW and VW owning Porsche AG. [Extracted from the article]

The US government has announced a set of principles for voluntary carbon markets (VCMs) in an effort to improve their standards. VCMs have faced controversies and criticism for allowing companies to buy meaningless credits to offset their carbon impact. The effectiveness of carbon credits is also questioned, as it is difficult to verify the claims of projects. While there are calls for stronger regulation, improving VCMs is seen as critical in reaching interim climate targets. [Extracted from the article]

The state has also taken a mezzanine tranche exposure to the market risks embedded in some very long-dated, illiquid and hard-to-value market positions of Credit Suisse that UBS will now put into run-off. Credit Suisse and UBS: The new risks The state-sponsored rescue takeover of Credit Suisse had just one aim: to prevent an imminent collapse of the Swiss banking system and economy that would have then spread contagion through international markets and may have sparked a repeat of the great financial crisis. UBS may be given a long time to meet them, but its global systemically important bank capital requirements are going up; banks' cost of equity is going up; net interest margins are coming down; and returns will likely fall. [Extracted from the article]

The market is dominated by universal firms that have a far larger client list than Goldman, mostly because of that mid-market wallet that the firm is now chasing. TxB now has 375 corporate clients, many of them the large companies that Goldman's investment bankers have served for years. Might the day ever come when Goldman wins investment banking business from a client that is first a customer of TxB? The firm's bankers all talk about One Goldman Sachs now, an approach that puts clients at the centre of the firm. [Extracted from the article]

The article discusses the recent settlement between Morgan Stanley and the US Securities and Exchanges Commission (SEC) regarding block trading practices. The SEC found that Morgan Stanley's former US equity syndicate head, Pawan Passi, leaked details of upcoming equity block trades to certain buy-side contacts, allowing them to pre-position themselves by shorting the stocks. While the SEC presents the settlement as a crackdown on malpractice, the article argues that the outcome is not as significant as it seems. The $249 million penalty imposed on Morgan Stanley is relatively small compared to the bank's revenues from block trading during the period in question. The article suggests that the lenient approach may be due to mitigating factors, such as Morgan Stanley's cooperation with the investigation and the lack of implication of the bank's remaining ECM staff. It also raises questions about the difficulty of establishing the extent of the harm caused by the violations and the inherent challenges in regulating block trading practices. Overall, the article portrays the settlement as an example of light-touch regulation rather than a major crackdown on Wall Street malpractice. [Extracted from the article]