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Activist Bramson criticises Barclays over CEO's Epstein links

Ex-divs to take 27.8 points off FTSE 100 on Feb. 27

Citi, Credit Suisse among banks curbing Italy trips on coronavirus fears - sources

LONDON/MILAN, Feb 25 (Reuters) - Investment banks including Citigroup Inc, Credit Suisse and Nomura Holdings Inc have curbed trips to Italy on fears that the coronavirus outbreak across the north of the country could quickly spread across Europe, four sources told Reuters. Citi has told staff heading to Italy's financial capital Milan or other northern cities to postpone their trips or seek approval from top management if they are working on sensitive deals, the sources said, speaking on condition of anonymity as banking policies are confidential.

Drama and Scandal Are Totally Normal at Europe's Banks

(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 emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis 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.

MORNING BID EUROPE-'V'-shaped bounce turns more like 'W' as virus spreads

As the coronavirus spreads beyond China, world markets are being forced to rethink the economic impact of the outbreak and how quickly it can be contained. New infections have ebbed in China, as many investors had assumed, but rose in South Korea, Italy and Iran, leading to lockdowns and travel restrictions in all three countries. South Korea’s Kospi was worst hit first thing Monday, dropping almost 4%, as the country’s fourth-largest city Daegu grew increasingly isolated when the number of infections there increased rapidly.

LIVE MARKETS-On our radar: virus-hit Italy, travel and luxury stocks

Barclays CEO Staley Expects to Leave by End of 2021, FT Says

(Bloomberg) -- Barclays Plc is preparing to search for a replacement for Chief Executive Officer Jes Staley, who has told colleagues he expects to leave by the end of next year, the Financial Times reported, citing people briefed on the lender’s plans.Staley, who joined the bank in 2015, could stand down at its annual meeting in May 2021, the paper said. A Barclays spokesman in London declined to comment on the report.The Barclays chief is under investigation over his ties to the deceased financier and sex offender Jeffrey Epstein, his second run-in with British regulators since joining the bank. Authorities are probing how Staley characterized his relationship with Epstein, the bank has said.The newest probe is another distraction for Barclays as it faces additional challenges to meet its profit goals. In 2018, Staley was fined for his attempts to uncover a whistle-blower.Staley, a former senior banker at JPMorgan Chase & Co., was among a swath of prominent financiers whose ties to Epstein came under the spotlight after his arrest.(Adds Barclays declines to comment in second paragraph.)To contact the reporter on this story: Candice Zachariahs in Mumbai at czachariahs2@bloomberg.netTo contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Ross LarsenFor 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.

Top banks' 2019 commodities revenue climbs 11% -consultancy Coalition

Commodities-related revenue at the world's 12 biggest investment banks gained 11% last year compared to 2018 due to buoyant oil and metals trading, consultancy Coalition said on Friday. Commodities revenue at the 12 banks extended its rebound from 2018, when revenue jumped 45% from its lowest in more than a decade in 2017. During 2019, revenue from commodity trading, selling derivatives to investors and other activities in the sector was $4 billion, the financial industry analytics firm said.

UBS Bankers Have a New Reason to Look Busy

(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 emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis 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.

In the Age of the Robot Banker, UBS Needs a Radical New Boss

(Bloomberg Opinion) -- Within a few months of joining UBS Group AG in 2011, Sergio Ermotti found himself in just the right place. Switzerland's biggest bank needed to restore stability after a spate of trading losses, and the newcomer was quickly elevated to the chief executive role. His exit isn’t going so smoothly.Ermotti, 59, has signaled that he plans to step down this year and the Zurich-based lender is now seeking a replacement, Bloomberg News reported. After implementing a successful turnaround by taking UBS out of some parts of the trading business and bolstering its lead as the world’s biggest wealth manager — just as central-bank stimulus infused markets and the rich became richer — Ermotti has allowed the bank to drift recently, and the stock has languished. It’s hard to see an obvious successor, which doesn’t reflect well on the CEO and his chairman, Axel Weber.While the shares have outperformed European rivals since Ermotti took over, that hasn’t been the case over the past two years. Crucially, the bank now trades below book value. The CEO has struggled to meet key financial targets, seen as unambitious at first, and he cut his goals again in January, the third time in three years that he’s had to reset ambitions.In an era of negative rates, the $2.6 trillion wealth manager hasn’t adapted as quickly as some rivals — including Credit Suisse Group AG — to preserve its private-banking margins. The shift to passive investments and lower expectations on returns for customers have made it difficult to defend higher fees, while geopolitical tensions have muted client trading.Chasing absolute growth in assets under management hasn’t helped improve returns as much as hoped as costs at UBS remained elevated. Even with its lead in the booming Asian market, managing money from the rich has become tougher.The succession doesn’t appear to have gone to plan either. With both Weber and Ermotti having been in their jobs for almost eight years, the bank should have assembled a deep bench of potential candidates. Instead, a series of botched senior appointments and management changes, including the exit of investment bank chief Andrea Orcel 18 months ago, are limiting UBS’s choice.Iqbal Khan, a prized hire from Credit Suisse brought in to help run the wealth management division, may not be among the runners, Bloomberg News reported. That isn’t surprising. He’s only been in the role a few months, and revelations about his acrimonious split with his former employer will be fresh in everyone’s minds.It may be too soon to turn to asset management chief Suni Harford, who’s also only been in the job since September. That leaves Sabine Keller-Busse, the chief operating officer, among the most promising internal candidates. But the former McKinsey & Co. consultant hasn’t managed a big division at the bank.A $5 billon fine in France for helping clients avoid taxes is clouding the outlook for higher investor returns this year, after the bank passed on the chance to settle when the opportunity arose. Still, lower targets for profit and cost efficiency are seen as achievable because they rely less on revenue than before. Khan’s plans to offer more tailored products for wealth clients, and to cut bureaucracy and increase lending, should juice up returns and profit. But that big shift into lending carries risk.UBS is still in a privileged position compared to some European competitors. It’s not in the midst of a deep restructuring like Deutsche Bank AG and HSBC Holdings Plc, nor is it beset by scandal like Credit Suisse and Barclays Plc. So this is a chance to think radically. As robots replace workers and banks invest heavily in the digital revolution, UBS would be wise to look beyond the usual circles for its next leader.To contact the author of this story: Elisa Martinuzzi at emartinuzzi@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis 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.