December 2019

December 2019

Crunch time for Japan’s banks

Squeezed by negative rates on one side and an ageing population on the other, Japan’s banks have never had it so tough. Euromoney examines their potential to break free from these constraints.

How Bruce Van Saun rebuilt Citizens Financial

When RBS floated Citizens Financial in 2014, it was the biggest bank IPO since the financial crisis and investors were sceptical of its prospects ‒ five years on and RoE and EPS have doubled, the stock trades at a premium, and the bank has shown it can compete with bigger US banks and non-banks alike. Chief executive Bruce Van Saun discusses what comes next.

It’s securitization, but not as we knew it

The dynamics of the US securitization market have changed beyond recognition, while the role of banks in ABS has evolved too; the excesses of the past have gone and securitization is now a safe and reliable funding tool for consumer lending. So why don’t banks want to talk up their role in the market?

Japan focus

Japan’s wealth managers face a problem for the ages

Japan’s wealth managers face a problem for the ages

Local banks believe that reinventing wealth management will supply them with domestic growth in a dismal macro environment. But the challenge is that the bulk of assets are held by elderly people, who aren’t used to investment, aren’t used to paying for it and don’t care much about digital innovation.

Japan banking: Five approaches to taking on the world

Japanese banks must go overseas to build sustainable profits, each in their own way. Nomura is streamlining global operations and applying itself in China; Daiwa wants to be a global mid-market M&A house; MUFG has bought Asean banks; Mizuho prefers organic growth; and SMBC is somewhere in between. Who’s ahead?

Japan banking: Flowers’ 20-year journey in and out of Shinsei

The purchase of Long-Term Credit Bank by JC Flowers and Ripplewood in 2000, creating Shinsei Bank, was a landmark for foreign participation in Japanese banking. Chris Flowers exited most of his holding this year and reflects on what he learned over two decades.

Governance brings an M&A bounty to Japan

A generation of bank-funded conglomerates is belatedly discovering corporate governance. The resulting divestment of non-core assets has private equity and foreign investment banks excited. Those that have stayed the course are well placed to benefit.

Securitization

ABS to test Cagney’s blockchain revolution

ABS to test Cagney’s blockchain revolution

The SoFi co-founder’s second act involves eliminating ‘rent seekers’ from the capital markets. Securitizing blockchain-originated loans will go some way towards demonstrating if it can be done.

Securitization: RMBS gears up for windfall

A deep and sustainable private-label RMBS market has always eluded the US thanks to the insuperable competitive advantage enjoyed by the GSEs; that could change if plans to remove these guarantees for higher-risk mortgages go ahead.

Capital markets

Comment

Responsible finance

Russia Inc focuses on ESG

Russia Inc focuses on ESG

Sustainable financing is gaining ground in corporate Russia as firms look to improve their environmental, social and governance policies ‒ but can the country’s notorious polluters really go green?

Banking

Columns

Sideways: Bloomberg's billion-dollar US election bet

Wall Street leaders alarmed by the prospect of a populist anti-finance president such as Elizabeth Warren or Bernie Sanders were given some hope when Michael Bloomberg declared his candidacy for the Democratic nomination.

Facebook’s Libra isn’t finished yet

The political and regulatory backlash has driven leading payments companies out of the Libra association, but a new version of the revolutionary stablecoin may yet appear.

Investment: The UK’s push for impact

Year after year, research highlights the gap between what impact investment consumers want and what they are being offered by advisers, banks and pension funds. The UK’s new Impact Investing Institute hopes to bring everyone to the table to change this.

Fintech

Latin America

Asia Pacific

Korea gets the digital banking bug

Korea gets the digital banking bug

Korea’s first two digital banks have had very different starts: one, kakaobank, is a clear success story; the other, K Bank, badly needs funding but is caught up in a problem around its would-be-biggest shareholder. Korea’s regulator is in it for the long haul and is inviting new digital banks to join them.

Lowy warns on India ‘financing catastrophe’

It was a bold call to launch a specialist credit business in Asia in 2009, but SC Lowy celebrates its 10th birthday as an established figure in distressed debt and high yield not just at home but also increasingly in Europe. Events in India, however, where the firm holds a position in Essar Steel, are testing its patience and resolve.

Emerging Europe

Front End